We’ve become a nation of subscribers not purchasers. Netflix, Weightwatchers, Amazon Prime, Hello Fresh and even your razors can be subscribed to. What does this mean for B2B and brands in general? Ultimately it means a big shift in the way they’ll communicate with customers – or members as they’re becoming more rapidly known.
Membership used to be exclusive to clubs, societies and organisations. Today members expect a lot more than the single transaction of a purchase in a physical environment. They want to be valued and rewarded for their loyalty. Members are also extremely fickle – something which has occurred in the retail environment already – just look at the big hit the big four supermarket companies have taken. If you’re like me you’ve probably got a wallet or inbox full of loyalty cards and schemes. You’ve probably shopped at all of the supermarkets too, seeking new experiences and trying out new promotions. Maybe you shop online for groceries from Asda but head to M&S Food for luxuries. Or you’ve swapped the traditional grocer for the value-brands of Aldi and Lidl – whatever your retail habits are, the landscape has changed and so brands have to adapt to the new membership economy.
Having members isn’t easy. It requires commitment. It requires effort and creativity. Members get bored. Their threshold ever lower and tested by more and more distractions. But don’t be fooled, members know and expect a two way street. As well as offering up their email address and money, they are also giving up time to interact with a brand – creating fans is another blog albeit in a similar vein.
Disrupt or be disrupted!
The membership economy probably has no better example of execution than Netflix. Well cited by analysts and marketers alike, it disrupted the video rental market faster than any other platform. Renting films wasn’t new, viewing them online wasn’t either, but Netflix delivered a new platform for a fixed fee. It’s ‘genius’ step was to create and release its own content as well as cult American shows which hadn’t been seen elsewhere. Look at House of Cards, Making of a Murderer and other Netflix Originals which reward their membership. Exclusive to a member. Others are catching on with Amazon building on its purchase of the LoveFilm membership to create Amazon Prime.
Amazon took membership one level further with Amazon Prime – for a whopping £75 a year members get next day delivery plus free access to their Amazon Prime Video on demand. Amazon offers unique products and services to members – in exchange for commitment and loyalty.
The food and drink industry is also a prime example of the Membership Economy. Coffee, meat, chocolates, spices, snacks are all subscriber-led businesses. Gaze was an early entry into the market but there’s probably very little not covered these days.
Just to give you perspective on this market, Unilever bought Dollar Shave Club for $1bn! They’re recognising the opportunity of cutting out the middle men, the distributors and retailers and selling direct to the consumer. Read the Guardian’s view on this purchase here.
But what about B2B?
For B2B the membership economy could offer serious opportunity. Today’s publishers for example are businesses selling more than the traditional trade press title. They offer events, seminars, data and much more in terms of their offering. How could a regular B2B company even compete perhaps when resources are limited?
B2Bs have a powerful asset in their toolkit – knowledge. Many give this away for free ad-hoc. We’ve already spoken about content marketing before on this blog and this will serve businesses extremely well in terms of building up members (or fans as we like to call them).
Business can delve a little deeper by offering a range of services with perceived value such as eBooks or webinars. They can also hold seminars with nominal fees for example, perhaps offering training on a specific topic. A low-cost exchange of money for knowledge and insight.
The membership economy does need resources. It requires a similar approach to content marketing but understanding that those who are happy to part with a monthly fee expect high quality in return. The benefits are obvious. Continued loyalty, higher levels of engagement and ultimately additional purchasing.
Taking existing knowledge and services that B2B has traditionally given away for free and converting that into a knowledge or value transaction will become more prevalent in B2B marketing in the future.
The future of the membership economy.
It’s likely we’re going to see more and more acquisitions of businesses like Dollar Shave Club by brands. We’re already happily consuming chocolate and wine by the boxful (think of Hotel du Chocolat and Virgin Wines). In the future, we’ll feel more confident in buying memberships to much smaller businesses closer to our own interests. Local businesses and start-ups will have real opportunity to scale-up their businesses by offering bespoke packages while (hopefully) guaranteeing monthly cashflow through membership fees.
The deliver of the majority of consumer products will still require a robust logistics approach – we still want to be excited by the physical delivery of something to us. The packaging and the unwrapping are just as important as the product or service inside.