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The Membership Economy

Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue

Robbie Kellman Baxter

McGraw-Hill, 2015

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Digital connectivity, communication technology and cheap cloud storage pave the way for an evolved business model that Silicon Valley consultant Robbie Kellman Baxter calls the “Membership Economy.” Some businesses, such as SurveyMonkey or Match.com, are entirely subscription-based. Others incorporate membership options and principles into existing structures. Membership organizations, like Netflix and Spotify, build ongoing, mutually beneficial relationships with members. getAbstract – a membership organization itself – recommends this well-researched, organized primer to students and leaders curious about the benefits and drawbacks of this business model.

Summary

The “Membership Economy” Defined

Netflix shows how subscription businesses differ from membership organizations. Netflix subscribers gain access to hundreds of movies and television shows, but a Netflix subscription means more than simple access. You can talk about shows with fellow users, you develop a feeling of loyalty about the company and you enjoy being part of the Netflix family. You share personal information with the company in exchange for this connection. Netflix harvests the data and creates personalized recommendations based on your past movie choices.

Any customer-centric firm that develops continuing, formal relationships with customers is a membership organization. Connecting fulfills a human need. The emerging membership economy includes YouTube, news sites like DIGG and Reddit, and photo-sharing sites such as Flickr and Pinterest. Existing businesses of all sizes can incorporate the principles of the membership economy. For example, a California salon offers subscription haircuts.

Mobile technology enables people to participate in membership firms using a range of digital devices, and the processing costs are low. Individuals react with these...

About the Author

Robbie Kellman Baxter founded the Silicon Valley consultancy Peninsula Strategies LLC; its clients include Netflix, SurveyMonkey and Yahoo.

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R. G. 9 years ago

It is the direction of very successful companies and this strategy could be applied in a variety of business applications
- 4 years ago
  
  Thanks Robert!
S. N. 9 years ago

Really enjoyed his great book on the value of membership and how to truly drive value from members, rather than being focused on the process of extracting revenue from customers. The key factor for me was finding your super users and developing your community. Also, the focus on the members you have today and providing them the platform to grow your community.
- 4 years ago
  
  Thanks Scott. I'm so glad you enjoyed the book. Please LMK what you think of the new one, THE FOREVER TRANSACTION too!

The Membership Economy

Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue

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