Five Years ago, I wrote The Membership Economy: Find Your Superusers, Master the Forever Transaction, & Build Recurring Revenue to describe a massive trend I was seeing, in which companies and nonprofits of all types were moving from a transactional focus to a relationship focus. I wanted organizations to explore using tools like subscription pricing, online community and ongoing sources of free value, as a means of building a “forever transaction” with the people they served. At the time, most organizations didn’t see why such a model could make sense for them.
Today, we live in a very different world. Subscriptions have changed how businesses run and how consumers work, shop, play and travel. Nearly every organization is trying to figure out how to build a direct, ongoing relationship with their customers. It’s a global phenomenon, with high stakes.
What does this mean for you? It means you have an opportunity but you also have a risk. Companies like Amazon, Netflix and LinkedIn are building a global footprint, and looking for local professionals to help them spread their influence. At the same time, there are opportunities for entrepreneurs to build models in their home markets that are truly customized for the goals and challenges facing their neighbors.
By focusing on these long-term goals and challenges and bundling features and benefits to deliver on an ongoing promise, you can create a business that enjoys recurring revenue as well as deep data which can be used to define a disruption-proof roadmap for the future. In The Forever Transaction: How to Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave (now available for preorder, and I hope you’ll be an early reader), I show you how to launch, scale and maintain a leadership position in a world of subscriptions. It’s based on my work in the trenches with dozens of companies, both digital natives and more traditional, long-standing market leaders.
Membership is not a program or a product. It’s a mindset that helps organizations build long-term, formal relationships with customers. You’re striving for a forever transaction—the moment when the customer takes off their shopper hat and stops considering alternatives.
You have a forever transaction when people say things like “I don’t even care exactly what I’m paying because this organization solves my problems and helps me achieve my goals. It’s like they know exactly what I need. I trust them.”
Most organizations that thrive in the Membership Economy use subscription pricing, but not all. These organizations share other attributes as well, such as a strong and well-defined onboarding process, metrics that value engagement and customer lifetime value as much as acquisition, and a digital component that connects the customer directly with the organization, and often with other members.
The book is divided into three sections and twenty-two chapters. Each chapter and section can stand alone. Some people will read the book from start-to-finish like a three-course meal, while others may use one section as a snack or à la carte as their needs require. My goal is to aid comprehension and spur action.
Section 1: Launch is designed to ground you in Membership. I don’t delve as deeply into the “what and why” as I did in The Membership Economy, but I do hit the high points. For deeper understanding, read the ME. This first section will help you assess where you are and where you need to invest. It will provide ideas for an initial test and conducting some basic research to ascertain your potential for joining the Membership Economy. Even if you’ve experimented with membership, subscription pricing, digital community and going direct, you will find this section can help you be certain the fundamentals are soundly in place. In this section, I feature companies like Carbon3d and the subscription fitness bike Peloton.
Section 2: Scale helps you move from small test to full scale. It helps you create the right organizational culture to support a forever transaction, accelerate growth through acquisition, anticipate common setbacks and correct mistakes, build the right infrastructure and use the right metrics. It’s addresses the foundational systems and processes your organization will need for rapid business growth. In this section, I feature organizations like Electronic Arts and Microsoft.
Section 3: Lead contains chapters to ensure that your model evolves to remain relevant and valuable to the people you serve. I break out some challenges mature membership economy businesses face: focusing too much on an aging cohort, getting distracted by short term goals, going global, and dealing with subscription fatigue. Because I’m always asked about future trends, I include a chapter touching on some intriguing trends on the horizon. Organizations featured in this section include Spotify and the Healthcare Financial Management Association.
It is a thrill to be so close to sharing my work with you after so much time researching and working in the trenches. I want to help you build forever transactions with the people you serve in a way that drives value for them and for you. It goes beyond making money, although using this model is profitable. You must care deeply about the customer. Your product has to be designed to produce the best results for your best customer—in a way that makes them trust you, forever.