The Forever Transaction: How to Build Life-Long Relationships with Customers, with Robbie Kellman-Baxter
“The more complicated your system is, the less your customers are going to trust you,” says Robbie Kellman-Baxter, author of the new book, The Forever Transaction. She is best known as the person who coined the term, “the membership economy,” which has shifted the way we look at and value customer relationships. In this episode, Robbie and I chat about leveraging powerful growth strategies around elevating members through subscription-based models. With over 25 years of experience working with well-known and emerging brands, Robbie has become an expert on this approach to membership and customer relationships.
I’m excited about today’s conversation, as we discuss the importance of the long-tail aspect of relationships, which moves us away from simple transactional exchanges. Listen in as Robbie and I discuss some of the main concepts in her book, which is a follow-up to her first book,The Membership Economy.
Subscription-Based Models Go Beyond Pricing and Tiers
While continuing consulting work after the release of her first book, Robbie says she realized that companies were slapping subscription-based models on services and products without actually changing business behaviors. She saw that not all companies were taking the time to fully examine the efficacy of their products/services, which is what impacts customer retention.
In The Forever Transaction, Robbie has put together tenants to showcase how your business model can support scale and customer satisfaction. It starts with organizations understanding that “you can’t justify a forever transaction or forever customer without a forever promise.” In our conversation, Robbie shares three tenants of her process for building a subscription-based service: launch, scale, and culture.
1. Launch Your Business
Robbie’s first phase of this process is the business launch. Whether you’re an entrepreneur who’d like to start their own business with subscription-pricing built-in, or you’re an intrapreneur inside a large organization that’s trying to move into being more customer-centric and to justify recurring revenue—this is your first step.
In this first phase, Robbie asks you to think through your forever promise (which also reminds me of, clarity of purpose). What will you consistently offer to your customer and how? If you’re a large company with an established audience, you will have to know who your best customer is. She wants you to think through who you’re designing your subscription around.
2. Scale the Business
Robbie’s second phase is about scale, which she categorizes as the moment when you define what you’re offering and not over scoping. She recommends that you start off with your small team, finalize your forever promise, and ensure that you have support from leadership. Gather your resources and continue to experiment until you get your minimum viable product, “MVP.”
According to Robbie, the MVP is the smallest offering that you can experiment with. So, you’ve got a team that’s working on a portion of the product/service that can be controlled, and testing it; this needs to be done until you know that you’ve got something special.
3. Build a Culture Around the Business
Once you and your team have gotten past phase one and two, you work to get everybody aligned. In this phase, Robbie explains that you’re managing cultures and emotions. It’s about understanding the role that everyone plays in the process, respecting their contributions, and keeping them involved.
Robbie tells that this is an important phase because you need the organization to trust and believe in the model. The technology needs to work properly, the salespeople need to be able to sell it to their present customers, marketing needs to know how to create the best-supporting language around it for future customers, and leadership needs to be able to support it. During this phase, you also see where the power core lies within your company. You have to know who holds a majority of the weight in terms of making decisions, and how you can work with them to align on the service/product to be presented.
As consultants and practitioners, both Robbie and I have seen how easy it is for folks to get swept up in the excitement around new customers. Particularly when it comes to subscription-based services, you have to keep up behaviors within your service model to keep current members happy.
Robbie shares examples in which a company she worked with had problems retaining customers because their product didn’t work well. She also saw that people left after a free service was offered because there was no added value. For instance, she shares an example in which a streaming company offered a free trial to use the service for a soccer championship, but the stream was poor quality, so folks canceled after the game. There were other factors involved which led to the cancellation after the free trial.
What Do You Know Now That You Wish You Knew Then?
Robbie says:
“If you don’t have leadership that believes in you, it’s going to be very hard to change them. If they think you’re a B+ player, not an A player, leave as soon as you’re able. Talent is an inefficient market. You can be really talented in one place and be underappreciated, and go somewhere else have your value go way up.”
Free Download: Chapter 8: Manage Emotions, Transform Culture, and Build a Shared Vision
Thanks to Robbie for offering to share a chapter from her book, The Forever Transaction. Click on the link to get a sneak peak and learn how you can build a winning culture through mission alignment, new metrics, and new processes that support the customer journey.
Click here and you’ll be directed to Robbie’s website for the download.
About Robbie Kellman-Baxter
Robbie Kellman Baxter is a bestselling author, speaker, and consultant with more than 20 years of experience providing strategic business advice to major organizations including Netflix, the Wall Street Journal, and Electronic Arts. In the past ten years, her company Peninsula Strategies has advised over 100 organizations on subscription and growth strategy. Her first book, The Membership Economy was an international bestseller. Her new book, The Forever Transaction, was released in April 2020. It has been described as a true game-changer taking readers through every step of the subscription business process—from initial start-up or testing of a new model to scaling the operation for long-term growth and sustainability to revamping your culture so everyone works together to optimize customer lifetime value. For more information about Robbie go to https://www.robbiekellmanbaxter.com.
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