What Makes a Membership Valuable?
Hello All,
As I’ve been building my own membership, I’ve been thinking a lot about what makes a membership valuable.
As I wrote in my blog post this week, we have seen a significant shift from paying for a service in one lump sum to a monthly (or annual) fee. This might simply seem like a revenue grab, but customers have also become much more savvy and selective. And there is a lot more competition.
The consequence is that you have to evaluate what your customer wants, on an ongoing basis, and ensure that your service is aligned. But you also have to go beyond just meeting their wants. The best memberships will provide value and transformations to their members in ways that they might not have anticipated. In doing so they build loyalty and stickiness.
Netflix, perhaps the OG of memberships, is continuously adding content that keeps (at least some of) us wanting more. And even though they lose members daily, they have grown their subscribers from 18 million in 2010 to 300 million in 2024. This is impressive and speaks to a deep understanding of their customers.
On the other hand, many of us stay subscribed to certain services simply because it’s easier not to cancel or because they provide just enough value to delay the decision to leave
When determining if a membership is still worth it, there are several questions you might want to ask yourself:
Does it bring enjoyment? A Netflix subscription that genuinely entertains and relaxes you at the end of the day can be just as valuable as any business tool.
Does it support your work ? So many people I speak to love their Canva subscriptions as it makes design so much easier (and fun!).
Does it reduce time consuming work? A good subscription will be akin to having an assistant that allows you to focus on more strategic aspects of your work. (ChatGPT or other LLMs are great for this).
Does it align with your goals? Ask whether the membership continues to support the business or lifestyle you want now, rather than the one you imagined when you signed up. If you've only been to the sauna at your gym over the last few months, it might be time to cut it.
Has your business or circumstances changed? What was useful six months ago might not be useful today. Perhaps you have enough clients and no longer need to pay for that networking group.
Is there an opportunity cost? Even small monthly amounts add up. Given limited resources, can that $20 or $50 monthly be better spent on something that helps in a more tangible way.
Is it deductible to your business? This is an incentive to business owners as by reducing taxes, it reduces the net cost. Of course, it's important to know what qualifies and what doesn't. I break this down in more detail in this week’s blog: Is a Membership a Business Expense?
I'd love to hear about your experience with memberships. Are there any that you absolutely love or have recently stopped using. Simply reply to this email and let me know.
Wishing everyone a great weekend!
Ronika
