News Flash: Membership is not Dead After All
What’s going on here? For years we have been hearing that young professionals no longer join and that the membership model is dead. Yet the so called “subscription economy” is growing.
As an article in Entrepreneur claims:
“This explosion of the subscription business model has led to a spike in mergers and a acquisitions activity. Witness Facebook’s $19 billion acquisition last year of the subscription- based messaging platform WhatsApp or Charles River Venture’s recent investment of $4 million into subscription-box company Cratejoy.”
In fact, membership/subscription is replacing commodity-based models with relationship-driven alternatives.
The global economy is in the earliest stages of a shift from a transaction economy toward a subscription one.
And it is not just knowledge services or groups of like-minded individuals that are adopting this model but retailers, manufacturers, health care and every conceivable sector of the economy. In
fact, Bed, Bath and Beyond is about to adopt membership (in lieu of their coupon strategy) to increase customer loyalty and offset a decline in sales revenue.
The article mentions 10 categories that are “ripe for transformation via the subscription business model” from stationary to pet food and health care and cites examples of early entrants in each of them.
Why hasn’t the membership model in associations become the pivot for on-going ransformation and innovation that led other industries? Why has it, instead, often become a contributor to stagnation?
Perhaps it is because over the years, membership-basedorganizations have stopped thinking about what membership means and updating its definition to reflect how and why people choose to connect at any given period. “Membership” has been reduced to formulas of dues for benefits, recruitment strategies, standard practices, processes, standards, rules and bylaws.
Let’s look at the factors contributing to the success of failure of subscription models, in another Entrepreneur article.
Constant adaptability: Subscription models that fail to rapidly recognize and adopt changes, fail. The example the article brings is the decline of Blockbuster which, “faced with
Netflix’s budding success…failed to recognize the changing needs of the modern
consumer.” Other than superficial changes the association membership model, for the most part, has not changed much.
Convenience: For consumers, convenience and simplicity are among the key reasons they prefer subscriptions. Their prescriptions or services are renewed automatically and shipments arrive at appointed times without having to remember to order each month. Does association membership increase convenience and simplicity in some aspect of the members’ business?
The added value of one-stop shopping: Successful subscription services increase value by bundling, curating and/or enabling one-stop shopping experiences for customers. Is this consideration one of the drivers in planning and product development?
Stronger relationships: “The subscription model,” this article argues, “is also not about getting a project done and then moving on to the next client. It allows us as a service provider to grow a relationship with the client and cater to their business or design needs as they change.” Yet many, if not most, associations are wired for product development and sales rather
than relationship management and development. They are driven by program and
event deadlines, for example, and organized around product silos rather than
Cross-selling and upselling: membership in most for-profits, such as retailers, is not an end in itself or the primary source of revenue. It is a gateway through which customers are exposed to many products, developed into repeat customers and upsold. In most associations there is no development and growth path for members once they join. They usually remain on the commodity level—purchasing memberships and generic, stand-alone events and products.
To look at membership with new eyes, perhaps associations should draw inspiration and ideas from other sectors who deploy the membership model in new ways, and for specific, strategic results, rather than to continue tradition.
Instead of the usual starting points for planning and product development (e.g. should we add a new certificate, drop a program or raise dues?), new questions should be asked from the perspective of the customer.
- In what areas might membership maximize convenience and eliminate headaches?
- What can be bundled, curated or congregated in one platform for one-stop shopping?
- How do we grow the value of relationships once members enter the door and over their lifetime?
These would force us to re-think the model and leverage value that we forgot existed.