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Membership and Subscription Growth
32 minutes | 3 years ago
Subscription Box Secrets to Growing Monthly Recurring Revenue
Most subscription companies think if they just increase the value they deliver to their members, that retention will improve. While adequate value is crucial, delivering more value does nothing to increase retention. Instead, you grow your community, create engagement and build the value of what you're delivering and show the customer how what you're delivering solves problems. Then show them how they can use it in their life and how they can get tremendous value. It's not about the product you're delivering, you must demonstrate how to use you're the product you are delivering to improve or solve problems in your members' lives. There are a lot of great insights in today's episode with my guest Leslie Emmons Burthey, VP of Marketing for the successful subscription box, FabFitFun. A subscription box with a great retention rate, even though it's one of the premium priced offerings within the subscription box niche, thought by many, to be dominated by discount offers. It's Not About What You Deliver, It's How What You Deliver Impacts Your Subscriber's Life One of the things that sets FabFitFun boxes apart from their competition in the luxury subscription box business, is the multi-page, color magazine insert that tells the story of each product. Customers can see the time and thought that goes in to each product that is included in the box. The magazine also gives information on how to use the products. While the monetary value of each product is important, teaching the customer how to use the product in their life is what makes it valuable. Leslie says, "Really to understand the product we want you to know why we chose that product and how we think that that product is going to enhance your life. " The magazine also highlights customer experiences with products and often tells the stories of the buyer, delivers announcements, enhances the customers knowledge of each product and how to use it in their lives. A Community Generates Retention without Increasing Fulfillment Costs Leslie says, at FabFitFun, "It's not just about the physical product, it's also about the community you build. "Customer Forums give people a place to give feedback about the products, share comments, personal stories, and interact on a deeper level. There have even been personal meet ups and spin-off communities in some of these forums. When customers have relationships with other members, their loyalty extends well beyond the products they receive each month. They don't want to leave because they'll lose the relationships, and your member satisfaction and enthusiasm remains high. Deliver More of the Value Your Customers Want FabFitFun looks for new ways to engage customers and add value beyond the products inside the box. Their TV channel has fitness classes and soon will be launching a food show, more benefits of membership, that don't fit into a box. A robust referral program also helps bring in new subscribers. The most recent box was a contest for videos and getting subscribers engaged by promoting the box out to their list and contacts. "People love sharing things that they love with other people, and so having a contest was just a fun way to take the behavior that was already going on and tell our members: We see you. We appreciate you. We would love to interact with you and make this fun and exciting." I hope you find the full interview with Leslie as fascinating as I did! I think we all can learn from her how build community with our customers, add value to your subscribers, and think beyond the box for creative ways to keep people happy and continue subscribing. To learn more about how to deliver benefits members want and will pay for, listen to the full interview with Leslie on the Membership and Subscription Growth podcast.
22 minutes | 3 years ago
Subscription Box Secrets to Growing Monthly Recurring Revenue
Thousands of new subscription boxes have launched in the last two years; however, only a few have reached one thousand subscribers. Sadly, many failed boxes did manage to grow to 10,000 or even 50,000 subscribers initially. What are the differences between the subscription boxes that grow versus the ones that never launch or those that stall? This answer can help you grow any subscription business to generate steady monthly recurring revenue. Stefan Pretty runs a software platform for subscription boxes called, Subbly. Thousands of boxes are managed with his software, and he has access to their proprietary numbers. I asked Stefan what the difference is between subscriptions that grow within a few months from the ones that never seem to get off the ground? Decision Drives Success He said, "People who tend to actually succeed in gaining traction quickly, are the ones who, either have a: experience, or b: sheer determination." It takes tremendous drive to stay focused on what customers want and need, and are willing to pay for. Businesses who don't succeed often over-focus on the wrong things or lose sight of customer satisfaction along the way. Maintaining a subscription base requires constant engagement with the customer. Make All of Your Marketing More Effective Stefan says, start by identifying your ideal customer: "The first thing is, figure out who you're selling to, and then once you know who you're selling to, offer them the opportunity to buy it, and keep tweaking it until it is exactly what they want." Once you identify your customer, make it easy for customers to give you feedback. Be willing to change based on their comments. They may want something entirely different than you expect. It doesn't matter what you think they want, "At the end of the day, your customer is your product." Retention is the Key to Subscription Growth Ultimately, " It's the perceived value of the items in the box that's really important." Constantly ask yourself, "How can we add more value?" People love the element of surprise that comes with receiving a subscription box. It's the "hook" that keeps them coming back for more. Once they are hooked on your subscription, keep them satisfied with excellent customer service and communication. Make sure every aspect of your subscription, from delivery, to marketing, to billing, aligns with your customer's desires and expectations. Excellence in all aspects of the subscription is essential to retaining customers and boosting revenue. To learn more about how to deliver benefits members want and will pay for, listen to the full interview with Stefan on the Membership and Subscription Growth podcast.
31 minutes | 3 years ago
How to Compete and Win Against the Biggest Publishers in the World
Do you find yourself competing for subscribers against free or low-priced content? What if you had to compete against the Wall Street Journal, Investors Daily, Financial Times, Barron’s, MSNBC, Yahoo Finance and thousands of other paid and free resources. Dan Fink, managing director of Money-Media, offers innovative solutions and lessons learned from his years of competing against some of the biggest publishers in the world, and winning. I recently interviewed Dan for my Membership and Subscription Growth podcast. In a world where everyone is playing on the same connected stage, Dan can show you how to compete (and win) against the biggest publishers in the world. Create a Quality PublicationDan says the first step is to “Make sure you have a product concept, a market, an audience that you can serve really well.” Forbes and other financial publications are essentially marketing to the same consumers, but Money-Media distinguishes itself by targeting a specific audience and offering content that is not easily available anywhere else. Money-Media also invests heavily in the staff and technology to create a quality publication: “We have just really smart journalists and editors that produce really good content. And we invest in the technology that delivers it. Whether it’s through company websites, mobile and tablet apps, RSS feeds, or CRM integration, “however people want to consume our information, we want to make it available in all those channels.” The Decision Maker May NOT Be the Person with the Biggest TitleOne of the challenges in subscription sales is getting your product to the person or people that have the money and the authority to make the decision. Dan’s team learned over the years that most corporate boards have a specific liaison within the company who control the majority of the communications that goes out to the board. The board will usually reach a decision by consensus, so the old sales question “Who makes the decision” is not really relevant. Instead, ask your lead contact if they would like a personal free trial subscription. Once the publication is in the hands of this person acting as “gatekeeper” for board communications, the content should sell itself. When the trial is over, Money-Market converts these free subscription l to sales by only offering licenses to corporations – not individuals. This motivates the gatekeeper to reach out personally to the people who make the decision and have the budget to purchase subscriptions. Monitor Subscriber EngagementCustomer service is key to retaining subscribers. Money-Market uses a number of monitoring system to make sure clients are receiving their subscriptions. Dan says, “There's all sorts of things that happen along the way, so we have a number of sort of digital and human monitors in place making sure that we're always able to deliver and they're always actually receiving in the end.” “It's really about having a 365-day mentality that if you're going to try and renew these people a year later, your job starts in day one to make sure that they have a good experience all year long. And then the pressure's off when renewal time comes. Find out more about Money-Market’s products at money-media.com. You can find information there on each publication and link through to a free trial. Listen to the full interview with Dan on the Membership and Subscription Growth podcast.
37 minutes | 3 years ago
How to Create Great Content That Your Subscribers Want and Will Pay For
The real money in a subscription business is not in getting new subscribers, it is in keeping them and increasing their value. They might visit if your sales process is good, but they’ll only stay if your content is truly engaging and you are communicating with them in an entertaining and engaging way. Jim Sinkinson founded Infocom Group in 1980 and sold it in 2015. The company produced online data services, newsletters, webinars, books, special reports, ad-based media, live professional development conferences and seminars for the PR/corporate communications market. Continued
36 minutes | 3 years ago
Yours FREE. Three Decades and Several Billions of Dollars of Subscription Revenue Growth Secrets
When you are delivering subscriptions to hundreds of thousands of customers for more than three decades you develop a profound understanding of how to attract, retain and increase the value of your subscribers. Although he became president and COO of Guthy-Renker, that has at least one billion-dollar subscription product, Proactiv, Georg Richter began his career with Double Day Book Clubs, then BMG music club before today, the CEO and founder of OceanX. Georg has been an executive at the highest levels of some of the largest, fastest-growing subscription businesses for the last three decades. And, for you, he reveals the biggest subscription mistakes to avoid, how to deliver value subscribers will eagerly pay to receive, and the single most effective strategy in jump-starting membership growth after it has plateaued. How would you like to sit down with a subscription marketing master to learn how to grow your recurring revenue? Well, today is your lucky day. Are You Making Any of These Common Subscription Mistakes?1. Choosing the wrong product Too many subscription businesses are starting up with great enthusiasm and fading away faster than they started. To secure a good start, one of the first things to do is study the market. Find an area in the market, a niche, that has isn’t currently being served. 2. Failing to secure enough funds on the front-end Even though the wonderful byproduct of the subscription model is recurring revenue, you need to have a source of funds to get things started. You will have testing and development costs, shipping costs, marketing costs, etc. that will start before your first month of recurring revenue comes in. “The most important thing to understand is, it needs money, it needs upfront investment, it needs careful planning,” advises Georg. 3. Investing funds in incorrect proportion for growth You need to be liberal with your media promotions and conservative with inventory orders. With all of the digital marketing opportunities available today, you should be experimenting with as many as possible to see what works best for your target audience – interactive websites, social media, blogging, videos, and influencer marketing are just a few of the many resources available. Georg shares, “One of the mistakes I see is that people don't plan for any media spending. They have a lot of passion around the product, they just want to start it, but then they have not enough money to promote it. That's a mistake.” And for inventory, Georg advises against getting carried away. “People say, ‘No, I'll have 100,000 members immediately,’ and then they buy inventory like crazy, and they sit with a pile of stuff they can never sell, which is a sad story. I would always encourage people to be conservative in the beginning, rather work with scarcity and build up slowly. Conserve your capital. Be very cognizant of capital and spend it in media, and try all kind of channels you can try.” 4. Letting your emotions override your planning Too many subscriptions are starting with high enthusiasm and no plans for maintaining that enthusiasm long term. Georg suggests, “If you start a subscription you've got to think ahead down the line, what are you going to do in three, four, five, six months? Because there will people, if you do that well, stay with you for a long time. You have to always give them something interesting, original, value, but the main thing is it has to be interesting. You have to be inspired to get that subscription, there's so many out there.” How to Create Value Subscribers Are Willing to Pay ForWhether you are a publisher competing against free information or sell physical products and you are competing against retailers, you are engaged in a constant battle for your customers attention, investment and on-going support. You will only retain your subscribers if you are delivering more value than everyone you are competing against. Here’s Georg’s go-to list of value building strategies he discovered ...
36 minutes | 3 years ago
How to Attract and Retain Customers in Your Non-Membership Business by Creating a Membership
Attracting new customers is the hardest, most expensive aspect of any business. Getting attention from your prospects, encouraging them to trust you and to take action, to do business with you, takes a tremendous amount of work. For a small business marketing nationally, it can be impossible to break through the clutter and get your message heard. However, a membership program instantly positions you as an expert in your field, making your communication welcomed by your prospective customers. It makes you a celebrity in the eye of your consumer. And, when it comes time to sell your business, you generate the sales price from your core business and you can sell your membership as well. My longtime client, David Lucca, was co-owner of an investment management firm. His firm worked exclusively with airline pilots, and he was looking for a way to attract airline pilots to become clients of his firm, versus all of the financial investment choices out there. David launched a new stand-alone company, the Airline Pilot Financial Association, to become the marketing arm of his financial management firm and provide great custom created financial resources for airline pilots across the country. I recently interviewed David for my Membership and Subscription Growth podcast. He has moved on from the investment management firm and the association he created, but what he has to share about his experience is astounding. He reports that, after starting the association, he grew his firm by over $150 million in just a few years. David shares some advice for how others can do the same. A Membership Establishes Yourself as an ExpertRather than competing like everyone else, you distinguish yourself by being the leader of your membership. David shares, “Before we started the association, nobody knew who we were. We had a few clients who were pilots. They flew with American, and they had just come to us by way of referral. I decided that I would like to reach out to that group as a primary niche for our firm. The wonderful thing of course about entering a niche with something like that is you have instant credibility. So, when people say, "Who are they?" The answer was, "Well, they're the ones that started the US Pilot Financial Association. They're the experts on our retirement plans." By creating a membership association, David was able to jump in front of a long line of competitors. The membership association established a relationship of trust, expertise and authority with the members. When you’re doing business in an area of heavy competition, where there are tens of thousands of other businesses trying to get in the face of your customers, this can be a game-changer. It's easier to be an expert when you tightly refine your niche. They didn’t just narrow their target audience to pilots, but went as far as limiting it to the pilots of just 3 airlines. This narrow niche allowed them to be more specific in their message. “As soon as you speak with one voice, that process of creating value that results in a transformation is just so much easier. It's just like instead of your brain going 10 directions, your brain just has one thing to think about. And the process of looking at their specific dangers and the specific opportunities that are in front of them, it all just becomes so much clearer as to what you can do to solve their biggest problems. Every time you go through another round of value creation, what you're offering to your niche is more and more powerful,” advises David. Celebrity Power to Generate Referrals and Excitement No one likes salespeople. And, ordinarily, a chance meeting with someone who is looking to sell you something is not an enjoyable experience. However, everyone is excited to meet a popular celebrity. David shares a memory of being in line at an airport. talking to a man sitting next to him. “A pilot came up behind me and I could see he was with one of our airlines. So,
42 minutes | 3 years ago
Secrets That Helped 10X Beachbody That Can Enable You to Quickly Grow Your Monthly Recurring Subscription Revenue
Would you like to discover the marketing secrets from the team that grew Beachbody from $100 million to more than $1 billion in revenue? Babak Azad was a leader within the marketing team that helped launch Beachbody into an iconic brand within the fitness industry.Today, Babak Azad is the founder and CEO of Round Two Partners which works with other brands and subscription companies to help them do the same. I recently caught up with him for an interview for my podcast, Membership and Subscription Growth. While Babak and I discussed several breakthroughs on the podcast, here are two that can have an immediate impact on your subscription revenue growth. Position Your Product as a Premium Product That TransformsYour subscription product is more than a simple transaction and needs to be treated differently. Rather than selling that product, you need to be selling results. The results that your customers are going to personally experience by using or receiving your product are where the focus of your sales message should be. Every time you mention your product, rather than talking about it, talk about the transformation or how that customer will feel because of your product. “You’ve got to be different from what everyone else is talking about,” suggests Babak. “I am talking so much more about brand and, really, the sense of experience, because that is one of the bigger things that I'm starting to see across pretty much every industry. That focus on creating an experience and creating a memory and stories around it is a big deal, but at the end of the day, it's, what's the promise? What is, whether it's the problem or solution, what is the thing that you're trying to either solve or help someone with? Are you delivering on it? Are you actually solving that? To what extent? How are you doing it? Things like that.” Your customers don't care about what you're going to deliver, they only care about how it's going to improve their lives or help them. Watch Your Membership KPIs to Discover Growth OpportunitiesFew subscription businesses are spending enough time looking at their numbers. Running your subscription business without proper KPI’s is similar to taking your family on a road trip without seeing where you are going, having a speedometer or a compass. KPI’s are like having GPS navigation for your subscription revenue growth. They tell you exactly what to do for fastest growth. Babak suggests you start with recording the lifespan of your subscribers’ activity. Measure how long your customers stay with you. How many billing cycles do they stay through before you lose them? Tracking this activity of each subscriber will reveal trends and opportunities to make changes to the subscription cycle at the point where you seem to be losing them. This data also helps you determine where to focus your time, staff functions, and dollars to promote growth. “You don't need a statistical tool. You need Excel and a data dump, and you will at least start to get there. Then undoubtedly, it raises questions and there are things that will start to trickle up. You at least have a baseline. If that means that you don't even go and backfill for 2016 and 2015, fine. Just start with where you are. Then, you've got to create a bit of a process that every month or two months, whatever it is, you update it and then you are trying to test and optimize, to improve those metrics,” adds Babak. Whether you are starting your subscription business or years deep in it, it is never too late to implement these practices of making your marketing message about your product’s results and then measuring the activity of your subscribers to find growth opportunities. You can discover more from the full interview with Babak Azad on the Membership and Subscription Growth podcast. Subscribe to the podcast to discover the keys to recurring revenue growth from successful entrepreneurs in the subscription economy. Previous and upcoming guests include Robbie Kellman Baxter (autho...
35 minutes | 3 years ago
Three Key Breakthroughs that are Game-Changers for Membership and Subscription Growth
Too many people create a subscription business because they heard it’s a lucrative business model. While it’s true that the membership model can help you scale your company faster, generate long-term stability and enable you to grow a vibrant tribe of thrilled members, generating revenue can’t be your only priority. Instead, when you focus on generating a positive impact on your members lives, they’ll reward you with membership and subscription growth. In a recent interview for the Membership and Subscription Growth podcast, I spoke with Tim Broom, the co-founder and CEO of ITPro.TV. Tim transitioned to a subscription business model four years ago and is set to hit $8 million in revenue this year. What he has done, you can do. Your product may be much different than his, but the keys to his success can be applied to any subscription model. ITPro.TV is, as Tim describes, “a Netflix for learning information technology.” They offer a low subscription price for access to a library of videos for people to learn and get certified in areas of information technology and security. At around $30 per member per month, they’ve experienced a phenomenal growth rate. Tim believes this success is a byproduct of having the right focus, value, and onboarding programs in place. Removing obstacles for your members to succeed In a world where so many businesses are focused on profit, Tim has chosen to focus on a real, profound concern for the outcomes that each member experiences. He says, “you take care of your members, and we call them members, they're not subscribers or customers, they belong to something.” To explain further, Tim shares that his “job description is to remove obstacles to people's success. With that mindset, we wanted to bring a different type of learning, a different way of learning. Your obstacle may be geography because of where you're located, you might not be near an institution that can provide high quality training for IT; or maybe it's money, because you don't have the cash or maybe you can't get a loan in order to do it. A lot of times you have young families with kids and someone wants to change careers, but they really can't afford to do it because they're working full-time to support their family and they can't do both. We want to remove those obstacles.” The result of this transformation focus is an audience of loyal members who believe in your product and don’t hesitate to share their success stories with others. Delivering a high-quality productWhen asked about having to compete with all the free information and training videos available, Tim believes that their success comes from the value of their product. They are an established and trusted source of content as opposed to the unknown sources producing the free content on YouTube. He asks, “as a business owner, who do you want to be working and making changes to your network that involves your email, or your website? Do you want them to learn from a trusted source or from someone on YouTube?” To make certain that the value of ITPro.TV grows for each member, Tim adds, “We originate and create all our own content that is on our site. So, we're also a video production and content creating engine. Our team creates these videos and offers them up and organizes them in a way that an IT professional can get the skills and knowledge that he needs to be able to perform a task and it also grow with him as the technology changes.” He states, “one of our core values is to create new effective content every day. So, every day, we're in the studio creating new content, so the value to a subscriber is greater a month after they subscribe because we've created approximately 400 more episodes, which happens to be about 25 minutes, the attention span of an adult. We always are creating new content to create more value for the subscribers.” After adjusting your focus to be on the members’ positive outcomes, and then making sure you’re continuing to improve the quality for ...
25 minutes | 3 years ago
Lisa Sugar’s Five Golden Rules That’ll Generate Subscription Growth for You, Just Like PopSugar Must Have!
Passion, customer impact, focus, feedback and service are crucial for maximum subscription and membership growth. For an example, take a look at PopSugar and their subscription box, PopSugar Must Have. While I recommend you subscribe to learn more about building your own subscription program, here’s five “Golden Rules” you can use immediately from a recent interview with Lisa Sugar, PopSugar’s founder and CEO. Continued
18 minutes | 3 years ago
Customer Success Secrets to Transform Your Subscribers from a Series of “One Night Stands” into Members for Life
Customer success determines retention rates in the membership economy. If your member does nothing with what you sell her, she’s going to cancel your subscription. The old model of leaving it up to your customer to figure out how to get value from what you sell may have worked in the old one-and-done product sale world. Your membership and subscription growth is determined by how well you ensure customer success. It involves helping your members find a lifetime value in subscribing to your product or service. I refer to it as turning your subscribers into a vibrant tribe of followers. And, it starts with how you attract your them.Continued
26 minutes | 3 years ago
Subscription Business Secrets of a Successful CEO/Founder/Harvard MBA to Launch a Membership in a Hyper Competitive Industry
While pet owners enjoy spending money on their pets, the pet supply business is already crowded, cluttered and challenging to break through. But, with a keen eye to opportunity, Deena Bronz discovered an underserved group of customers that were a perfect fit for the subscription economy. Deena Bronz is the co-founder of KitNipBox, a curated monthly box of cat products, including toys, treats, accessories and even Halloween costumes. Deena shares her advice for finding the right product or service to offer, building a community for the members, and focusing on retention. Continued
34 minutes | 3 years ago
Discover Subscription Sales Secrets From the #1 Sales Engine for the Subscription Box Industry
Within the middle of the huge subscription box boom is one person with a single website, MySubscriptionAddiction.com. Started from an obsession of subscription boxes, it’s become the single largest affiliate for almost all subscription boxes today. And, because their editors create so many unboxing videos, get feedback from followers and see what works from a sales promotion perspective, MySubscriptionAddiction.com is the perfect place to learn what’s working in subscription marketing today. Liz Cadman, founder of MySubscriptionAddiction.com, is one of the best sources for insight into success in the subscription economy. MySubscriptionAddiction.com provides reviews and a directory of subscription boxes. They publish unboxing experiences and feature customer reviews to a growing and eager audience of subscription box enthusiasts. Her website currently averages a million visitors a month, with over 10 million pages viewed each month. MySubscriptionAddition.com followers are the most informed and motivated subscription buyers today. According to Liz, the average viewer of her website is 95% female, in the age range of 25 to 34, who has subscribed to at least 2 or 3 boxes at any given time, and spends at least $100 per month on boxes. And this average viewer has about seven more boxes on her wishlist too. And even though the MySubscriptionAddition.com audience is mostly women, they are still the top affiliate for a lot of the boxes that are targeting men. Women are the primary buyers for all subscription boxes, whether the box targets men or women. With such an immense amount of data on boxes and their customers, Liz is positioned to share valuable and proven tips for those wanting to enter the subscription economy. For starters, when considering the price point of your box, she recommends going for a higher price point, around $39-$49, as opposed to starting off with a low-price box. An additional recommendation for starters is “going quarterly so that they have more time to figure out what's working. This gives them more lead time on everything and they can do things in a seasonal manner. A lot of our readers who have quarterly subscriptions that they love would still love to get even more from them. So, start out quarterly and see how that type of timing is working for you. You can always add an add-on option in the future - maybe a $10 monthly boost where you get one of your favorite products a month in addition to the quarterly box.” My SubscriptionAddiction.com recently launched an MSA Insider's Program. Liz shares that “we have a panel of thousands of super passionate subscribers who want to give feedback to subscription box companies. They fill out surveys for us. They give feedback on products. If you are looking for either testing out the concept of a box, or you're an existing subscription box company and you want feedback on future products, or just to get a better sense of our demographic and ask all sorts of questions, we have those opportunities as well.” If you are looking for ideas and inspiration to create your own subscription box or grow your own membership program, Liz recommends studying Rachel Zoe Box of Style, FabFitFun, PopSugar Must Have, Loot Crate, Culture Fly, and Ispy. Discover more insights from Liz and her followers of MySubscriptionAddiction.com by listening to her interview on Membership and Subscription Growth! Be sure to visit MySubscriptionAddiction.com for reviews and information on the many subscription boxes available today! https://s3.amazonaws.com/msgw-audio/Membership_and_Subscription_Growth_010_Discover_Subscription_Secrets_From_Best_Sales_Engine_Subscription_Box_Industry.mp3
34 minutes | 3 years ago
How to Grow a Niche Subscription Business to Thousands of Subscribers in Just a Couple of Years
It’s often a huge challenge to figure out what you should deliver to your subscriber members each month for maximum membership retention and renewal. Plus, you want to deliver something that’ll create referrals and social buzz. This challenge is even more difficult when you are a subscription box trying to negotiate with a company to deliver hundreds or thousands of items so you can ship them to your subscribers as part of their monthly subscription box. There must be a constant balance between getting your hands on products and investing the time and relationship capital to obtain the ones that’ll generate a huge impact. This is the same for a SaaS company choosing which new features to develop or a publisher working with editors to create content. In my recent interview with James Erickson, owner and CEO of Stridebox, a subscription box service for runners, we discussed his solutions to the problems of getting items for Stridebox that drive engagement, how to balance content that members would readily appreciate versus delighting them with new discoveries, as well as how to engage subscribers to create a community. James came from a background in newsletter publishing and transitioned into subscription boxes. From the outside, it may appear that these are very different, but to James, fulfillment and the need for membership retention were similar. He said, “…if you look at a printed newsletter you have a package, a newsletter, different inserts for the package and a mailing list. It's really very similar [to subscription boxes.]” The big difference with newsletters and subscription boxes are the products that ride in the box versus the articles in a newsletter. What does it take to get the hundreds or thousands of products to ship out to your subscription box subscribers? James answered, “I found out very quickly that it wasn't that difficult. It's one of those that if you ask, somebody is going to say yes eventually. It's just a matter of putting your head to the grindstone and doing your research on the products, and figuring out what's a good fit for your audience.” But then there’s a big question of which products will improve membership retention. Do you deliver products in your box that customers will recognize as valuable from brands that add to the prestige of your box, or do you focus on delighting your customers by helping them discover products they’ve never experienced before? James answered, “The first year, we tried to align ourselves with as many big companies as possible. We wanted the Power Bars in the box, because everybody knew about Power Bar. We wanted Gu in the box, because everybody knew what an energy gel was in our market. We tried to align ourselves with companies like Mizuno and Nike, and Adidas, and put their advertising or inserts in our boxes, or give discounts to our subscribers. We wanted to play ourselves as ‘We're that brand with those connections.’ Today a lot of our product choices are based on things you don't see every day - The mom and pop shop in Idaho that's cooking gluten-free, vegan cookies that are full of protein - The place out of Washington called ZipFit that not everybody knows about that's like a powdered drink mix company. We don't want to give somebody the same thing, the same brand, the same flavors, two or three months in a row, because that doesn't lead to longevity of the customer. If you wrote the same article for your newsletter three months in a row, people would kind of get tired of it.” And while including the best products is crucial for success, membership retention always comes down to the power of the community you build. For Stridebox, they put their subscribers into their box. James explains, “we started doing a monthly card photo submission. Each month, we have what's called the Stride Guide. On the back of the Stride Guide are all of the products that are in the box, as well as a couple of sentences about them,
66 minutes | 3 years ago
Perry Marshall Interviews Robert Skrob Revealing Three Secrets of Launching a Subscription Business That Grows
Recurring revenue is the single biggest growth factor and stability for businesses today. Rather than having a revenue that is dependent on individual transactions, subscription revenue grows as you add new subscribers to the continuing revenue from subscribers that were added last month, and the month before. Yet, many subscription businesses struggle and fail. Perry Marshall, one of the world's most expensive and sought-after business consultants, endorsed by FORBES, INC Magazine, and the most respected marketers in the world, recently interviewed Robert Skrob about the subscription economy. In addition to a wealth of information and advice for the subscription economy, Robert revealed what subscription businesses must do to grow recurring revenue including: how to launch a new subscription business to generate recurring revenue, how to generate new subscribers, and how to onboard new members to increase lifetime customer value. Continued
30 minutes | 3 years ago
PupJoy Leads the Subscription Box Industry by Enabling Pet Parents to Personalize Their Subscription Box Experience
For 99 percent of the subscription economy, every subscriber receives the same thing. It would be unthinkable for a publisher to create a unique magazine for each subscriber, or for a SaaS company to create a unique software tool for each customer, or for an association to create a unique experience for each member. However, that’s exactly what the most forward-thinking subscription boxes such as PupJoy do every month. Continued
33 minutes | 3 years ago
What You Can Discover About Membership Retention from Collaborating with 4,000+ Subscription Box Companies
Discover how to grow your subscription business from the explosive growth of the subscription box industry. Subscription boxes have become the single fastest segment of the subscription industry over the last 12 months, as have the number of offerings. What leads to fast growth within subscription boxes can help you grow your own subscription economy business. At the center of the subscription box industry is my recent guest on Membership and Subscription Growth podcast, Amir Elaguizy, the co-founder and CEO of Cratejoy. More than 4000 subscription boxes rely on the Cratejoy platform for marketing and fulfillment. Amir has seen what works within the subscription box industry and what leads some subscription companies to fail. Membership retention comes down to subscription fundamentals, understanding what your customer wants, delivering tangible value and delivering a terrific unboxing experience. ...Continued
53 minutes | 3 years ago
Use Tribal Leadership to Increase Membership Retention
Every group exhibits language and behaviors that are unique to them. What makes certain cultures so effective at innovating change, while others are a misery to everyone who participate? How can you change a culture to unleash your group’s potential, grow your company and increase your membership retention? I talked with Dave Logan, co-author of Tribal Leadership, about what the beliefs, attitudes and loyalties of a group can reveal about its culture, and how to improve that culture for better results. Dave is a bestselling author, management consultant, and faculty member at the USC Marshall School of Business. Dave co-founded CultureSync in 1997, a management consulting firm specializing in cultural change, executive coaching, and strategy. CultureSync’s clients dozens of Fortune 500 companies, major nonprofits, and governments around the world. Logan’s insights will lead you to breakout performances within your corporate team and to greater satisfaction and membership retention for your association, training program, or any other type of subscription organization where members interact with one another. How Diagnosing Your Tribe’s Culture Can Lead to TransformationThe basic building blocks of any culture is the tribe— a group of 20 to 150 people focused on making an idea successful, Logan says. Big organizations are made up of smaller tribes that join to form a larger tribe of tribes. If you measure a tribe’s culture on a scale of one to five, and then elevate that culture just one level, performance can increase by 300 to 500 percent, he says. “It’s the most important thing you can focus on,” Logan says. “Culture eats strategy for breakfast.” To identify a tribe’s stage, look at what the people in the tribe say and do: Stage One – This tribe believes “life sucks.” Life is unfair, and God just messed this up. People in Stage One steal, commit fraud, punch each other in the face and worse. Stage Two – This tribe believes “my life sucks.” They behave passively and avoid accountability. They spend their time griping and complaining and do just enough work to not get fired. Stage Three – This tribe believes “I’m great (and you’re not).” People in this stage are busy self-promoting and competing with one another. They get very little done. Stage Four – This tribe believes “We’re great (and they’re not).” Think of sports. There’s usually a common vision and a common adversary. The team sets aside individual egos and takes ownership of group goals. Stage Five – This tribe believes “Life is great.” There is no “us” and “them.” Stage Five tribes are driven purely by values, and that produces world-changing innovation. However, they can sound a little crazy and unstable, like the dot com companies which said, “We don’t need revenue, all we need is eyeballs.” How to Move Your Tribe from “My Life Sucks” to “I’m Great”Tribes at Stage Two feel unempowered. To get them inspired, it’s best not to take on the whole group, Logan says. “The negativity is just too great. It'll overwhelm you,” he says. “They'll make sarcastic jokes about you and character assassinate you without you even knowing that it happened.” Instead, find one person in the tribe who wants things to be different and mentor him. Offer specific advice, like “Let’s start by getting organized.” Or, “Let’s start by setting some goals.” “You're not trying to improve the tribe, you're just trying to elevate that one person,” Logan says. After a week or a month, that person moves to stage three and says, “I’m great.” But they look at everyone around them, and they all really suck. “And at that point, you make that person a mentor to someone else in the tribe,” Logan says. Four Strategies to Move Your Tribe from “I’m Great” to “We’re Great” and Increase Membership RetentionThink about the sports team that suddenly starts to win lots of games. Their story is never about having the best talent, Logan says. It’s about the individual journey the players make from “I’m great,
62 minutes | 3 years ago
Reduce Your Monthly Failed Charges So You Collect More Recurring Revenue
Subscription businesses benefit from the advantage of recurring revenue. Acquire new members and keep your existing ones. Sounds simple, right? We understand it’s not that easy. How do you keep your recurring revenue if your members’ credit card charges are declined? When you charge the credit card that you have on file, send the product or service, and then find out the charge was declined, that’s called involuntary churn. And, it sucks. It sucks out your revenue, and the hassle often sucks out the member’s subscription. I met with Paul Larsen to discuss this challenge. In addition to a lengthy list of credentials and experience, Paul is the owner of PaulLarsenConsulting.com, a company with a focus on helping businesses conquer involuntary churn and increase their recurring revenue. You will discover: • Why “lowest price” merchant services firms can lead to increased credit card declines and decreased recurring revenue from existing members. • Why you are getting so many credit card declines (and it’s not necessarily because your customer doesn’t have available credit) and what to do about it. • Current trends in the credit card industry and how they impact credit card declines. • Auto-updater services that get you credit card data when your customer receives an updated card with a new expiration date. • How to identify a credit card processor that can help you get more charges approved each month and increase your recurring revenue from your existing members. What are the Biggest Causes of Credit Card Declines?You see the recurring revenue of your existing members decreasing at a rate higher than your churn. This is what happens with involuntary churn. The charges on your members’ cards start getting declined. Incorrect card information is the biggest cause. When a member’s card information changes, you are not often notified. There are several unintentional reasons for the change, and the customer often fully intends for you to receive your payment. Card information changes when members are issued new cards. This happens when they lose a card, experience fraudulent charges, change out their card preference for a new rewards program… and the list goes on. An additional disruption in the system is occurring because every card in America is being reissued with chips. Almost all of them are reissued with new expiration dates if not new account numbers. “Because every card has a new piece of information, the old legacy information has been switched out on which the last charge for that subscription took place,” explains Larsen. “So, we've seen overall decline rates steadily rising over the past two years again, in large part because of this mass reissuance.” “The period of great volatility has been about four years now because, even before the chips, there were the massive breaches at Target and Home Depot, so those two breaches alone caused 110 million credit cards to be reissued. Plus, we're all losing our credit cards it seems, at least once a year,” adds Larsen. Companies who have merchant processors who don’t deal with this issue have seen self-involuntary churn triple in the past 18 months. And it’s not over yet. While most credit cards have been reissued with chips, still many hundreds of millions of debit cards are yet to be chipped. At a time when you are doing all you can to keep your members, this problem becomes a huge hassle for them. They have to proactively update their information. It’s giving the member the opportunity to look at their subscription and decide if they want to renew or not. When often, a card that is regularly charged goes without their attention and the subscription continues. In addition to changing card information, another cause of card declines is the prepaid cards. When prepaid cards are purchased and used to buy a subscription, they become a declined charge when the money runs out. “Fraudsters endeavor to gain the system using prepaid cards,” warns Larsen. He adds,
46 minutes | 3 years ago
How To Seize The Membership Economy Opportunity To 5x Your Company
Why would your company want a member instead of a customer? Studies show the valuation of companies in the membership economy are anywhere from five to 10 times the size of similar companies which use transactions. That’s according to Robbie Kellman Baxter, author of The Membership Economy. Baxter is a Silicon Valley marketing consultant whose clients have included Survey Monkey, Netflix, Yahoo, Oracle and eBay. I recently talked with Robbie about what she calls “the forever transaction,” a customer who sticks with you forever. You will learn insights she’s gained from advising nearly 100 organizations on growth strategy. Why Would A Company Want Members Instead Of Transactions?Long-term members give entrepreneurs a more predictable cash flow, says Baxter. Also, companies are able to invest more time and money to acquire a new member than they could for a one-time sale. “So many transaction-based companies invest in acquisitions, and then don’t retain the customer,” Baxter says. “They’re on a constant treadmill, and it’s like a hamster wheel. You’re always running to keep up with new products or enough offerings, and you have to keep finding new customers.” A membership business lets entrepreneurs get to know one set of customers and continue to serve their evolving needs. Acquisition costs go way down, and profitability goes up. Why Would A Customer Want A Forever Transaction?So why would a customer buy a membership instead of, for example, a course that teaches them a skill one time? It’s because a membership can keep solving their ongoing needs, Baxter says. But, it’s also important to structure a business that does so. For example, if a customer takes an online course teaching him how to draw, once he’s learned all he wants, he doesn’t need the membership anymore. But if the business gets to know its customers, and really understands their challenges, it can continue to expand its offerings. It can teach how to earn a living from drawing, how to use drawing software packages, or how to get into art galleries. “Then they will stay for life,” Baxter says. “Because they want you to solve their problems forever.” How Do You Change A Company’s Culture To Fit The Membership Model?To move from a company based on transactions to one based on memberships demands a different mindset. One that’s focused on the long-term happiness of customers as opposed to short-term revenue, Baxter says. That can mean weening owners away from over-reliance on the metrics found in quarterly reports. “Because the transaction isn't as important as retention,” Baxter says. The company should also evolve to focus more on member satisfaction and engagement. Members will expect better treatment than one-time customers. They’ll expect to have more of a voice. “If I buy a Hershey's candy bar, I don't expect to get Hershey's to listen to me. It’s a completely anonymous transaction,” Baxter says. “But if I own a subscription to the Chocolate Garage, where my membership lets me buy chocolate every month, if I don't like the selection, they're going to hear about it. The company will need to have customer success philosophies in place to manage that feedback.” How Do You Build A Relationship That Keeps Members Long-Term?“Onboarding is one of the most overlooked opportunities to engage and deepen valuable customers relationships,” Baxter states. She lists the following three activities that companies are doing to have effective onboarding. 1. Reinforce the wisdom of the member’s decision. When a customer buys something, he almost immediately wonders whether he did the right thing. “So, if you say right away, ‘Congratulations you're taking the first step toward having the career of your dreams. We're going to help you. You're already better than 99 percent of people who don't even take one step,’ It reinforces their good decision,” Baxter says. 2. Give some value right away. Pandora does this well. The customer only has to pick one song,
49 minutes | 3 years ago
Increase Your Recurring Revenue by Delivering 10X Value
The subscription economy is exploding and everyone is wanting the benefit of recurring revenue. Today the world is awash with subscription options-Netflix, Amazon Prime, SalesForce.com, Dollar Shave Club, and so on. Sure, you offer a dynamite software as a service company, a great training program, a unique product, or vital business intelligence, but how can word of your business cut through all the noise? To gather some insight from an expert in the subscription economy, I talked with John Warrillow, author of bestselling books like Built to Sell - Creating a Business That Can Thrive Without You and The Automatic Customer - Creating a Subscription Business in any Industry. John is also the founder of a subscription-based company called The Value Builder System, where advisors help company owners increase the value of their businesses. Before that, he founded Warrillow & Co., a subscription-based research business dedicated to helping Fortune 500 companies market to small business owners. The lifeblood of every business is repeat customers, says Warrillow. “Automatic customers,” people who buy subscriptions, are the best way to ensure that your recurring revenue continues forever. To give yourself the market edge, you’ll want to pay attention to three numbers: 10, 90 and 3. Make Your Subscription 10x More Valuable Than a Single SaleOnce upon a time, the monthly credit card statement had five or six charges—the utility bill, cable TV, etc. Today, small incremental charges—the Netflix subscription, Microsoft Office 365, Birchbox—fill the pages and stretch on. Consumers are feeling subscription fatigue. They’ve raised the bar on what they’ll buy. How do you compete? Warrillow advises that you consider the 10x versus 10% theory. “Try to develop a 10x value proposition that makes it ten times more valuable to subscribe than to simply buy on a one-off basis; because, nobody is going to subscribe to your product or service to save ten percent,” he explains. California-based information marketer New Masters Academy does this. It developed an online learning library. When you subscribe, you can learn watercolor painting, how to make better pottery, and more. Their competition is the community college, where it might cost $600 or $800 to attend a live training workshop. “For $29.95 to subscribe to New Masters, you can make the case that the customer got 10 times the value they would have gotten from going to a single live workshop,” Warrillow says. Build Subscriber Loyalty Within the First 90 Days You’ve sold a membership, time to move onto the next buyer. Wrong. You’ve got the first 90 days to get your customer to be transformed by, or learn to depend on, your product. Otherwise, the member won’t keep the subscription, and that recurring revenue you counted on decreases. The key is to keep your buyer engaged. “Statistics show if you're able to change their behavior, get them to interact with you, feel good about you in the first 90 days, their likelihood to churn (cancel the subscription) drops off a cliff,” states Warrillow. “They will be subscribers for a very long time.” On the other hand, if you ignore the customer for 90 days, and then see they never used the product you sold to them, you’ve lost them. “There's virtually nothing you can do after the 90-day period that will re-engage them,” he warns. “It’s why companies like Amazon and Netflix have entire teams, boardrooms full of whiteboards choreographing and storyboarding the first 90 days of their relationship. They will go to the point of really looking at whether to send a third email on the sixth day. They even statistically validate whether it's better to send that email on the sixth day or the seventh day. It has that big of an impact for them,” Warrillow says. A Lifelong Customer Should Deliver 3 Times His Acquistion Cost It’s the value of selling subscription programs. Rather than getting a one-time payment you get that recurring revenue coming in.
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