The Membership Economy: A book review by Bob Morris

Membership EconomyThe Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue
Robbie Kellman Baxter
McGraw-Hill (2015)

How to create a community of “customer evangelists” who thrive in the Membership Economy

The term “customer evangelist” was introduced by Ben McConnell and Jackie Huba in their eponymous classic in 2002. I cannot recall a prior time when it was more difficult to create and retain them than it is today and competition is certain to become even more intense in months and years to come. That said, to what does the title of Robbie Kellman Baxter’s book refer?

She defines membership “as the state of being formally engaged with a organization or group on an ongoing basis. Members are part of the whole — although they don’t always contribute to the experience of other members. An organization able to build relationships with members — as opposed to plain customers — has a powerful competitive edge. It’s not just changing the words you use; it’s about changing the way you think about the people you serve and how you treat them.”

Companies that thrive in what Baxter characterizes as the Membership Economy are annually ranked among those that are the best to work for and held in highest regard. They are also annually ranked among those that are most profitable with the greatest cap value in their competitive marketplace.

These are among the dozens of passages of greatest interest and value to me (through Chapter 16), also listed to suggest the scope of Baxter’s coverage:

o What Is the Membership Economy? (Pages 2-3)
o The Membership Economy Matters to Its Members (21-22)
o Membership Organizations Come in a Variety of Flavors, and, The Darker Side of the Membership Economy (27-29)
o Promote a Culture of Marketing Innovation (34-38)
o Why Marketing Loves Membership (41-42)
o The Steps in a Typical Sales Acquisition Funnel (46-52)

o What Defines an Organization’s Superusers, Increasing the Number of Your Organization’s Superusers, and Why Superusers Are Important to an Organization (58-63)
Note: These three separate but related passages need to be re-read frequently as reminders of key points.

o Seven Potential Revenue Streams (68-73)
o Common Pricing Mistakes (76-78)
o When Free Isn’t Really Free: The Napster’s Story (87-77)
o Technology Matters — Especially in the Membership Economy (92-94)
o Key Technologies of the Membership Economy (94-95)
o Increase Engagement Over Time (102-104)
o SurveyMonkey: Going Upmarket While Staying True ton Early Customers (118-123)
o LinkedIn: Using Freemium to Avoid the Chicken-and-Egg Problem (130-132)
o Pinterest: Driving a New Way to Search by the Power of Community (132-135)
o Starbucks: Build Something Uniquely Tied to the Brand (139-141)
o American Express: Give Membership Its Privileges (148-151)
o How Mom and Pop Can Embrace the Membership Economy (158-159)
o What You Can Learn from Small Businesses and Consultancies (163-164)

As I worked my way through Baxter’s eloquent as well as lively narrative, it seemed to me that her concept of a community within a membership economy bears stunning resemblance to Seth Godin’s concept of a tribe. The members are devoted to each other, of course, but especially to the cause, mission, values, and indeed vision they share. Residents of what I call the Apple Orchard have no desire to be elsewhere. (I am now wearing out my sixth and seventh Apple computers. To paraphrase Charlton Heston, “I will give up my Apple when they peel my cold dead fingers from around it.”) Harley owners have the same strong sense of ownership pride. More relevant to the Experience Economy is the community that my friends Bo Burlington and Paul Spiegelman co-founded, Inc. Small Giants Community, dedicated to “inspiring the next generation of business changemakers and values-driven entrepreneurs from across the land.” Presumably Baxter agrees with Margaret Mead: “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever has.”

Baxter makes skill use of several reader-friendly devices that include dozens of “Tables” (e.g. 6.1 “The Onboarding Process” and 10.1 “Secrets to Increase Loyalty: What the Pros Know”) as well as a “Remember” section at the conclusion of Chapters 1-21 and her Conclusion. These devices facilitate, indeed expedite frequent review of key material later.

Before concluding her book, Robbie Kellman Baxter expresses her desire to “be there” for all of her readers, if she can. Here’s her offer: “If after reading this book, you want to incorporate the Membership Economy into your organization, let me know. I’m building an online community to support the Membership Economy, but in the meanwhile, just send me an email to rbaxter@peninsulastrategies.com with your specific question, and I’ll do my best to answer it. Best of luck, and keep in touch!”

I presume to stress the importance of collaboration because it really is essential to what “a small group of thoughtful, committed citizens” can accomplish in the Experience Economy. In this context, I am again reminded of my favorite passage in Lao-tse’s Tao Te Ching:

“Learn from the people
Plan with the people
Begin with what they have
Build on what they know
Of the best leaders
When the task is accomplished
The people will remark
We have done it ourselves.”

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