Robbie Kellman Baxter shares a recent post from her series Subscription Stories. This week, why customer success growth closely aligns to the rise of subscription-based businesses, and how a customer success orientation can help dramatically increase your customer lifetime value.
Nick Mehta, CEO of Gainsight, which is often called the Customer Success Company. Nick is both an expert on the emerging discipline of customer success and the leader of a SaaS company that is dedicated to a forever promise of helping businesses develop deep and lasting relationships with their customers. We’re going to go deep on the discipline of customer success, what it is, why its growth closely aligns to the rise of subscription-based businesses and SaaS specifically, and how a customer success orientation can help dramatically increase your customer lifetime value. That is a key metric in the membership economy. Anyone who wants to build a forever transaction with customers can learn a lot from Nick.
The following interview is adapted from my podcast, Subscription Stories: True Tales from the Trenches.
Robbie Baxter: Let’s start with the basics. How do you define customer success?
Nick Mehta: We believe customer success was created out of this transition to the subscription business model. In more transactional business models, the way to make money, was to build something and then to go sell it. That is what created a lot of the economy out there. In a subscription business model is, as you know, if you build stuff, sell it and your customers leave, you don’t make any money because all that money comes over time and the lifetime value of the customer.
Key points include:
- Defining customer success
- The role of community in the growth of Gainsight
- Energizing virtual events
Read the full article, Why Customer Success Matters For Subscriptions With Gainsight CEO Nick Mehta, on LinkedIn.
“Scott Mordell was CEO of the Young Presidents Organization, or YPO, from 2011 through 2020. What is fascinating about YPO is how intensely engaged their community is. Members will move mountains to make sure they can attend their regular meetings, despite the fact that they’re among the busiest people in the world. Many of them even qualify as “Superusers”—my word to describe members who go beyond just being good paying members, and actually contribute significant time and money of their own to benefit the organization.
Scott and I recently discussed the processes YPO has developed to attract, engage and retain CEOs around the world, the surprisingly friction-laden process they use to onboard new members, and the reason so many members become superuser.
Welcome to the show, Scott.
Thank you, Robbie. It’s great to be with you.
Tell me about the forever promise that you make to your members. What is it that you’re going to do for them forever in exchange for their engagement and loyalty?
First of all, we welcome extraordinary leaders to come together and grow together to improve their lives, businesses and ultimately, the world. It can be lonely to be a leader of an organization. Our forever promise is that you’ll never walk alone in your journey as you go forward.”
Key points include:
- Peer-To-Peer Relationships
- Whole-person leadership
- Keeping a high level of community and culture
Read the full article, YPO’s Scott Mordell on a Subscription that Transforms CEOs into Superusers, on LinkedIn.
Robbie Baxter brings the subscription-based business model to education and shares how it can benefit from the Membership Economy.
The past year has been a difficult one for schools. It sometimes seems like everything’s in flux.
Many families have changed strategies. Some have left traditional schools to join neighborhood pods. Others have gone from independent schools to public schools to save money. At the same time, some public school families have gone private, fleeing the chaos of the public school system. And, to make things more complicated, some students have moved out of the area, but are still learning virtually from their original school.
Schools are left wondering—will the students who left come back? Will the new families stay beyond this year? And is virtual learning going to be part of our new normal?
In this uncertain time, loyalty has never been more important.
I’ve devoted much of my career to helping organizations build loyalty, building the kind of “forever transactions” that justify predictable recurring revenue.
So the question is, does what I’ve learned working with subscription businesses and membership organizations apply at schools?
My answer is yes…and I’ll show you why. But first, let me tell you how I came to be so interested in this question of how organizations build loyalty so deep and so trusted, that customers take off the consumer hats, don their membership hats and stop looking for alternatives.
Key points include:
- Defining the promise
- Retaining loyalty
- Connecting with superusers
Read the full article, What Public, Private & Independent Schools Can Learn about Membership from Silicon Valley Subscription Companies., on LinkedIn.
Robbie Kellman Baxter shares her latest post on key subscription-based business strategies. This week she covers the new metrics of subscription models.
Selling is hard.
You have to find the prospects, attract their attention, build their trust, understand their needs and goals, and then get them to sign the agreement.
It’s much easier to keep the customers you have, and focus on extending and expanding that relationship.
That’s why there’s been an explosion in the “Anything-as-a-service” models (XaaS)–in the business world.
If you’re in sales, and moving to a subscription model, or even if you’re already selling something as a service and need a refresher, here are some tips to help you attract, engage, retain and expand relationships with the most profitable customers.
From Big Game Hunting to Farming
In a traditional business, the goal of selling is to get the customer to buy. That moment of transaction is when you’re done—hooray! And you go out to sell the next account. It’s like big game hunting, and you’ve brought in the woolly mammoth and left the carcass on the floor of the cave while you go out to win the next big deal.
But today, with SaaS and the emphasis on recurring revenue, the goal is to get the customer to come and stay. In this Membership Economy, it’s all about building a long-term relationship, with an emphasis not just on the initial transaction but on extending and expanding that transaction over time. If you need to optimize for lifetime value, you need to bring in the right customer (a customer who is going to get value out of what they’re buying) and then you need to optimize the customer experience for engagement and retention.This means that it’s not enough to close the deal–you also want to make sure that they are onboarded for success, and that your colleagues are tracking engagement.
Key points include:
- The importance of underlying metrics
- The focus on recurring revenue
- Developing the customer relationship
Read the full article, B2B Subscription Secrets for Sales: How to Build a Forever Transaction with Your Customer, on LinkedIn.
Robbie Kellman Baxter shares a podcast from her new series, Subscription Stories – True Tales from the Trenches. This week, she is in conversation with Brad Handler, vacation entrepreneur. They discuss his affordable business model, the integration of membership and subscription into the luxury travel service, and more.
I’m Robbie Kellman Baxter. Today’s subscription story belongs to Brad Handler. He and his brother, Brent Handler, are vacation entrepreneurs who are incorporating membership and subscription in some really novel ways. Brad has done a lot of different things over his career, first as an engineer at Apple, then as an attorney at a top Silicon Valley law firm, then at eBay as their first in-house counsel from 1997 to 2001. But he is best known for his innovation in the world of destination travel clubs. The Handlers launched Exclusive Resorts in 2002. More recently, they have been building Inspirato, a membership model which also has introduced a subscription option.
‘I walked into a little dorm fridge and a tiny little bar sink and my wife turned to me and said: ‘shut up or solve this problem.’ So we spent the rest of that vacation week solving the problem.’- Brad Handler
We’ll talk about how to package value for subscriptions and determine the right price and features and what he learned as a Silicon Valley insider that has informed his work in rethinking the travel industry. And finally, we’ll discuss the unique benefits and challenges of working with your family.
Areas of interest include:
- Using technology to pull ahead of competitors
- Subscription vs membership business models
- Inspirato’s most important metrics
- How data collection can transform and improve customer experience
- How Inspirato is structured for profitability
Listen to the full podcast, Inspirato’s Brad Handler on Revamping a Thousand Year Old Industry, on robbiekellmanbaxter.com
Robbie Kellman Baxter takes a look at the Apple ONE bundling strategy to assess the pros and cons of bundling offers and partnerships from the perspective of a subscription-based business strategy.
Rumors are flying about Apple’s emerging bundling strategy. Apparently they are getting ready to launch several tiers of new bundled subscriptions, incorporating different combos of the following: Apple Music, Apple TV+, Apple Arcade, Apple News+, iCloud storage and eventually a new Fitness offering.
It makes sense. We’ve already seen the power of Amazon Prime, both as a driver of revenue and as a powerful “habit driver” for all of Amazon’s offerings. I know I joined Amazon Prime several years ago just for the free shipping. Today, that free shipping has motivated me to go to Amazon first for nearly everything. Just as important, Amazon Prime has introduced me to many other features that deepen my family’s engagement and loyalty, including video, audio, storage and ebooks.
Apple has been focusing more on service revenue over the past few years, and this move is one more step on their recurring revenue journey. They already have a “forever transaction” with millions of hardware customers who have stopped looking for alternatives to Apple for their hardware purchases. Now they are simply formalizing that relationship and extending it with their various subscriptions.
Areas covered in this article include:
- Partnering with a bigger player
Read the full article, Apple ONE (Or the Pros and Cons of Subscription Bundles, Rundles and Partnerships), on LinkedIn.
Subscription-based business models have transformed how many companies engage and retain customers. From B2B to B2C, the popularity of developing a subscription-based service has been steadily increasing and is fast becoming the new normal in terms of a sustainable business model. Robbie Kellman Baxter, leading expert in this field, has recently launched a new podcast Subscription Stories – tales from the trenches, where she interviews leaders of this revolution about how they’re using subscription pricing and membership models to redefine the biggest industries and generate predictable recurring revenue.
Subscription models are crazy powerful. Savvy small companies can easily deploy them to knock huge Goliaths off kilter. We’ve seen it in entertainment, software, hardware, news, retail, hospitality—the list goes on.
‘Our goal is to teach forever habits.’ Joanna Strober has reimagined the youth weight loss industry through her wellness program, Kurbo. Tune in to hear Joanna talk with Robbie about the role of a human coach in a digital program, how to communicate with both parents and kids, and instilling habits in customers for the long term.
Joanna Strober is an entrepreneur and investor who founded Kurbo, the first digital weight loss platform for kids. Joanna grew Kurbo into a subscription business so successful that it caught the interest of WW (Weight Watchers reimagined), one of the biggest names in wellness. She is currently the CEO of Kurbo and a Senior Vice President at WW. Before diving into the weight loss industry, Joanna was Senior Managing Director at Sterling Stamos, and co-authored Getting to 50/50. Joanna earned a Bachelor’s Degree from University of Pennsylvania and a JD from UCLA school of Law.
Highlights from this episode include:
- What triggers people to enrol in subscriptions and what motivates people to make subscription a habit
- The 7 key areas of competence in a subscription business
- The “reverse freemium” model, and the power of breaking the mold when it comes to adopting a subscription model
Listen to the full podcast, Kurbo’s Joanna Strober on a digital program to make kids healthier, or download the transcript from the Robbie Kellman Baxter website.
Robbie Kellman Baxter makes the case for subscription-based businesses and provides a few expert tips on how to take your business in that direction.
If you’ve been tasked with launching a subscription-based business at your organization, or are thinking about starting your own XXX-as-a-service or XXX-of-the-month-club, before diving in, take a step back.
To ensure a solid foundation, I encourage companies to devote a few weeks (usually at least 2 and no more than 12 weeks) to fleshing out the business case before proceeding. After all, the objective of testing is to assess the viability of the model, make necessary adjustments, and get the green light to move forward at a broader level. Without understanding the business case, how will you, and your organization, know whether you’re on the right track.
Details covered in this article include:
- The business rationale
- The forever promise
- Executing the vision
- The risks of the strategy
- The early steps, research, and tests needed
- Criteria for board support
Read the full article, Making the Case for a Subscription-Based Business, on LinkedIn.
Robbie Kellman Baxter reviews the progression of the subscription business model, from the early days of SaaS to a future of manufacturing based on the subscription model.
My first job after business school was as a product manager at an enterprise software company. I picked it because it was one of the first companies experimenting with what today we call Software-as-a-Service, and I could see that was going to be the futureIt just made so much sense. The old business model had been a licensing one. You paid a one-time (huge) fee to own the software and be able to run it on your site, using your own hardware. If you wanted to customize the software, you hired a professional services person to code it. Most people also paid for a maintenance contract for basic upgrades and bug-fixes. But if you had customized the software at implementation, then anytime you wanted to upgrade the software, you had to bring the professional services person back.
Points covered include:
-The benefits of Saas
-Transformation in manufacturing
-New business models
Read the full article, Why manufacturing is about to be disrupted by the Membership Economy, on Robbie’s website.
Robbie Kellman Baxter explains how to navigate the legal labyrinth when establishing a Saas business, and save a bundle on legal advice.
On my first day of high school, not one teacher talked about math, or history, or German, or literature, or biology. Instead, each teacher handed out and then discussed lists of rules which explained, in excruciating detail, what would happen if we were late to class, or skipped class, or didn’t turn in assignments.
I had two immediate reactions.
The first was surprise. It had never occurred to me that you could just not show up for a class, or refuse to turn in the homework. Yes, I was pretty nerdy, but still, at my good-sized, public middle school, kids attended class and mostly did as we were told.
The second reaction was fear. So many rules! How would I remember them all? And each teacher had slightly different punishments–in some cases, you just had to make up the time, which didn’t seem like such a big deal. But in other cases, your grade might drop a full letter.
Read the full article, How to Save a Bundle on Legal Advice, on LinkedIn.