5 minute read
THOUGHT LEADERSEHIP
Scott Langley proposes that the subscription model is a lucrative opportunity for organisations who know how to apply it well.
Harnessing the power of subscription and automation
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Awise man once said, “The secret to getting rich is to only sell things that people never stop buying.”
It seems everywhere you look today, you find companies adopting some form of subscription services. Although these subscription models aren’t new by any means, I would argue that they are the future. Many billion-dollar organisations have been built by successfully using this business model.
And understandably so.
THE ELEGANCE OF SUBSCRIPTIONS
Think Netflix, Zoom or any one of the productivity apps on your phone right now. Almost all major software products are now offered on a SaaS (software as a service) basis, offering users a low monthly or annual subscription instead of a once-off, outright purchase of the product.
Two main drivers are accelerating the popularity of this model. First, the cost to ‘own’ these products would be prohibitively expensive. (Consider what it would cost to buy a copy of all the movies, documentaries and series on Netflix today.)
And, second, even if you could afford to buy them all, would you want to? What about new movies you want to watch that haven’t been released yet, or the next season of your favourite series? New content is constantly being produced, so we’d rather stay connected via a low monthly subscription in perpetuity.
Today, more and more organisations are waking up to the huge potential that subscription models offer both their customers and their bottom lines. Digital offerings like software, apps and mobile games are obvious examples, but even companies selling physical products are getting on board.
For example, BMW owners can now choose to activate additional services in their cars on a
‘microtransaction’ basis and unlock the heated seats and heated steering wheel features for an annual subscription.
Global organisations are providing some form of a continuity programme, membership benefit or subscription model to their current market offerings. And yet, many member organisations (associations, societies and clubs) in South Africa are failing to leverage the passion and loyalty of their members. Sadly, many are providing mediocre and lacklustre benefits as a result.
So, what is the problem that a lot of clubs and membership organisations face?
The essence of the problem lies in an incorrect understanding of their member base. As we know, a supporter base is not a homogeneous group of people.
UNDERSTANDING YOUR MEMBER BASE
A lot of clubs have millions of people calling themselves ‘fans’. These organisations may even have tens or hundreds of thousands of ‘followers’ in their networks (i.e. their social media following, databases, mailing lists, etc.).
Many clubs may even have their own dedicated ‘fundis’. They know the stats, they never miss an event and generally have strong opinions about how things should be run. Oftentimes, these fundis have even joined some level of free membership programme.
However, the problem is that most associations have no real strategy or blueprint to convert these fans into faithful, cardcarrying, fee-paying subscribers.
Second, even if they had a plan like this, they have no online system for generating qualified leads and delivering them to their business daily.
AUTOMATING THE CUSTOMER JOURNEY
They have no automated customer journey in place, moving their leads from supporters to paying subscribers and, ultimately, into fanatical, faithful fans and evangelists for the club. So, they end up capturing information manually, which is slow, inaccurate and expensive. As a result, the quality of their databases is rubbish. The net effect is that these outdated databases, which cost so much to create, end up yielding lower returns on all future marketing campaigns.
The final problem is that they have no online strategy (or mechanism) to acquire these new paying subscribers profitably. A lot of advertising money ends up wasted on Google, Facebook and Instagram advertising campaigns – with no real results to show for them.
Bottom line: when they neglect to convert these fans into subscribers, they risk losing out on one of the most powerful and profitable revenue streams available to them – recurring payments. And they inevitably leave a lot of money on the table. Every. Single. Month.
THOSE WHO GET IT RIGHT
However, this need not be their reality. With a little creativity and the willingness to offer a more exclusive membership level, they could enjoy a highly profitable, recurring revenue stream available to provide their most ardent members with a far superior membership experience. (The global benchmark is to ascend 3% of an organisation’s total following into some premium membership tier.)
There are member organisations that know how to leverage their position. These are organisations that embrace 21st century business models and who are not afraid to try new strategies in their mission to scale their impact to its full potential. These are organisations that recognise the full impact recurring revenue can have on their association, their performance, their business and, ultimately, their legacy.
These organisations understand that it’s not only about the money. They understand that a thriving membership programme can provide real connections with other passionate supporters and be the basis for an unbreakable community of faithful fans.
Their experience is very different. They have a solid blueprint for converting their fans into passionate subscribers and evangelists for the association.
They have a clear message that resonates through all their advertising, marketing and sales systems.
They have an online system delivering qualified leads into their business daily – a system that runs on autopilot, 24/7, 365.
They have an automated customer journey, where fans can: • sign themselves up as subscribers • provide accurate contact and delivery information • agree to the POPI Act marketing permissions • authorise the recurring payments for their premium member benefits. Additionally, they have an online strategy that operates like an ATM – self-liquidating their advertising spend – enabling the club to acquire new, paying subscribers for free or even at a profit!
In my view, if an association can provide ongoing, premium benefits to their most passionate and loyal followers, and price their subscription appropriately, they can unlock one of the most lucrative revenue streams for their organisation.
