Replay #H2HChat The Membership Economy: From Influence and Transactions to Ongoing Revenue

by #H2HChat

Change is a common theme of H2Hchat each week. From disruptive technology to shifts in customer expectations to the urgency of keeping up in the big data era it is clear across industries that we are in a time of massive shift. According to this week’s H2HChat guest, all of this and more is part of “the most disruptive shift in business since the Industrial Revolution” which she terms “The Membership Economy”. Meet Robbie Baxter, author of The Membership Economy: From Influencer and Transactions to Ongoing Revenue. During this chat we’ll be exploring what this new economy means for all us- from small business to enterprise and from marketers to inventors.

Follow Up Questions from #H2HChat with @robbiebax 

Q: How do you step up from freemium to a lead? What do you recommend as a “qualification” process? #H2HChat @Crowdedhead

In a Membership Economy relationship, the additional opportunities for deeper, premium value should always be known, available and easily discovered in the course of normal participation and engagement.  For example, if a freemium member seems particularly interested in content about innovation,information about an innovation conference or mastermind should be integrated into their experience.

Thinking about “lead”  indicates more of a transactional focus.  The freemium member is already a member.  You are just making it easier for that person to get a deeper level of value.

Marketing is completely integrated into the member experience, ideally in such a way that the member can configure her experience to best suit her needs.

Q: Do you think blogging has contributed 2 a culture of devaluing the VALUE of business (supply surplus) @whitepcock

Blogging (non-ad supported) is content marketing.  It’s marketing that provides value to the reader in hopes of building loyalty and engagement which will ultimately result in a financial engagement.  I think you are asking about blogging vs content that people will pay for.

The issue is not that blogging has devalued paid content, but rather the economics of content creation and distribution have changed.  It used to be that to have a newspaper, you needed professional writers, access to a printing press and access to distribution (news stands, delivery, mail).  Today, I can create text, audio and video on my phone, and immediately distribute it globally.  For free.   So the cost of that content is virtually free, and consumers have learned to expect good content for free.  They are still willing to pay for scarce content, but the bar has gone up considerably.

These trends are disappointing for people who have invested in printing presses and delivery trucks, but that’s too bad.

Q: How do you deal with the Dunbar number – the limits of 150 or so meaningful relationships a person can properly keep track of? @gilbertism

This Is a great question.  I’m not sure that the individual relationships are the ones that matter most.  It’s more about feeling like you’re part of a community where you are recognized.  For example, I’m an active alum of my college.  I don’t know everyone in the alumni office, nor do I know even a small fraction of all alums, and yet when I see someone at an alumni event or on campus, I feel a connection.  Same is true of people at my gym, or consultants in my mentor’s consulting community.  Even if I don’t have a personal relationship, I feel known, in part by the signaling factor of my affiliation and in part because of the known and comfortable culture of that community.

Q: Value is subjective – how do you set expectations of value correctly to suit your business model? @rachelloumiller

You want to get away from a cost-plus pricing model, and focus on giving members access to so many things that they value that the cost becomes irrelevant.  The bigger question is whether the pricing of your offering covers the costs you incur, while delighting your members.  In other words, you have two questions to answer:

First, do my members perceive that my membership is more valuable than the dollars and time they have to invest (time is as big a hurdle as dollars in many cases).

Second, can I still profit even after incorporating all the costs that are required?

While value is subjective, you need to find the audience most likely to consistently find value in the unique combination of elements that you provide.

Q: It seems like so many people in social media have no purpose. Is it harder to have conversations today? Any tips? @gilbertism

There is a lot of noise in the world, in part because everyone has a loudspeaker, via the internet and social media.   In addition, because social media is relatively new in comparison to more established forms of communication, like mail, phone and even email, there aren’t yet cultural norms.  So you might be using twitter to share important news stories, and I am posting funny cartoons, but my local restaurant is posting specials of the day.  Even if we’re speaking the same language, we’re not speaking the same language, if you know what I mean.

The tips are to be generous in the content you send out and very careful and disciplined in how you consume information.

Q: Is it still a freemium model if the goal is to collect email addresses or if the shows are sponsored? @isocialfanz

Collecting email addresses can be a benefit of a freemium model, and many freemium models are ad- or sponsor-supported.  But the important thing to remember is that there is real value to the member, for free, forever.

Q: Giving and sometimes getting has been the backbone of my marketing, but lately it seems that reciprocity is dying. Any thoughts? @gilbertism

Reciprocity: the quality or state of being reciprocal : mutual dependence, action, or influence.

Reciprocity is alive and well A business model should provide reciprocal value, meaning the customer benefits and provides financial renumeration.  But business reciprocity is usually more of a formal  commitment among multiple parties to provide the same benefits—the way museums provide reciprocal access for example.  It sounds like you might be  thinking you’re in a reciprocal relationship but the other side has a different idea.

Just as with friendships, if you find that you’re giving all the time and not getting anything in return, you might want to stop nurturing those relationships.  Most successful communities with a strong culture of reciprocity have a culture that is fiercely protected and reinforced.  Once it’s established, it can be wonderful, but it’s not easy to find.

Q: How do you gear free trials to convert rather than delay paid membership? Duration, credit card up front, opt in/out etc #h2hchat @paycompliment

When I was in high school, I had a friend who worked at a frozen yogurt store in the mall.  Beautifully dressed women laden with packages would come in and ask for multiple free samples.  “Ooh, can I try the vanilla?” one would ask.  My friend would say “It tastes like vanilla.”

The most important thing about a free trial is to understand whether the trial is needed. A trial is for someone who doesn’t understand how the product will provide value.  Trials are great for a totally new kind of product or experience, or a habit forming experience that needs several days to understand how it works.  Sometimes you have a trial to build a habit, but most of the time you just need a taste.  A gym doesn’t need 30 days of a free membership for someone to understand the value.  Probably a single day to take a class, sample the machines, enjoy the locker room ameninties.  The other 29 days just slow the time to payment.