Monetization Law Number #23
Transform consumers from customers to subscribers and then into members; preach to the converted
Members are your monetization flywheel!
Members provide a powerful advocacy model that can flywheel your monetization.
This chapter explains that flywheel monetization growth can be gained by creating members who in turn become your biggest brand advocates and assets.
The Rule provides a quick monetization heuristic i.e. a rule of thumb in operation, a kind of —do this— and you’ll be 80% of the way there.
Rationale explains why the rule works with deeper insights and its use in practice.
Rabbit hole provides more in-depth resources and recommendations for anyone wanting to spend more hours researching each topic.
⓵ Rule 📖
⓶ Rationale 🧠
⓷ Rabbit Hole 🐇
⓵ Rule: Monetization Law #23 📖
Members provide a powerful advocacy model that should be used to power your marketing and monetization.
⓶ Rationale: Monetization Law #23 🧠
The rise of the membership model
The new economy has opened up a plethora of business models with software and tech-enabled service models.
One such model - membership - is emerging as a strong contender for both micro and large scale businesses.
On a micro-level, small businesses can be successful by reaching just 1,000 members paying as little as $10 per month.
At the top end, Amazon Prime is the poster child of the value that accrues from a successful membership model.
The times are a-changin’
The term consumer was popularised in the fifties, with consumerism supplanting capitalism as the terminology to describe the western economies.
This was a time when products were made and then sold, that was the end of it.
The mid 70's softened consumers into customers who needed to be treated with more respect and concern.
The noughties introduced subscribers into the lexicon. As the lease - don't buy - business model emerged customers turned into subscribers of a service. Users who could leave at short notice.
The power had shifted. The subscriber took the reins.
Membership is the evolution of the subscriber model into partnership thinking.
A fair exchange. A relationship of respect.
⓷ Rabbit Hole: Monetization Law #23 🐇
Brand evangelist business model
The fuel for relationship capital - is the brand evangelist. Memberships act as recruiting grounds for the best evangelists to emerge.
Invoking the power law principle again - we love power law - even a paltry 1% of activist members can supercharge your growth with passionate evangelism. 1% of Linkedin users drive the majority of platform activity.
In marketing, the adage rings true - if you say it, it's boasting, when the market says it, it must be true!
Thus social proof acts as an ignitor for growth and increased monetization.
In summary - memberships = marketing power [unpaid brand evangelists] + business model power [predictable revenue subscriptions] + product development power [honest to goodness product performance feedback] = monetization power
The long tail information model
All but 20 years ago, the news was a mass-market product.
Centrally produced, with distinct political leanings, the story was delivered with only three or so personas in mind.
The emergence of subscriber/membership models has allowed micro long-tail targeted information vehicular models to be highly profitable with as little 500-1,000 members.
🐇 Additional Research 🐇
Amazon Prime has over 200 million members. Memberships are hot!
As such there’s a number of books in this space that delve into the psyche and practice of the membership economy.
For an overview of the membership thesis, The Membership Economy by Robbie Kellman Baxter is a superb read.
Subscribed by Tien Tzuo provides a detailed look into the enterprise and corporate use of memberships as a monetization driver.
And last, but not least, Superfans by Pat Flynn is a fantastic view into how memberships are powering the creator economy.
There’s a bunch more meta and blogs on the ‘thousand true fans’ and the latest iteration–‘one hundred true fans’, but the listed books will give you enough of a foundation from which to get giddy with excitement at the monetization prospects!!