Episode 6: Robbie Kellman Baxter on the Membership Economy
May 8, 2017
Robbie Kellman Baxter served as a consultant to Netflix when all they did was mail out DVDs. That experience got Robbie thinking deeply about a new emerging business model. She developed these ideas over a period of nine years before publishing in 2015 her book The Membership Economy: Find Your Superusers, Master the Forever Transaction, and Build Recurring Revenue.
In our discussion, Robbie goes into some detail of how the book came about, how she promoted the book, and how it transformed her practice from more traditional consulting projects to work that is more advisory in nature . She has made an investment in becoming a thought leader, and it has paid off: Robbie is regularly invited to give keynote speeches and she has clients who’ve read the book reaching out asking for her help. You can learn more about her work by reading her book, the membership economy, and by checking out her website: peninsula strategies.com
Robbie studied at Harvard College and Stanford Business School, and started her consulting career at Booz Allen. She has been running her own consulting firm, Peninsula Strategies, since 2001, so she has been a successful independent professional for 16 years.
Will Bachman: Tell me about your early work and what led to writing The Membership Economy.
Robbie Kellman Baxter: I started my career as a big firm strategy consultant. After business school I went into the tech industry in product marketing, then went out on my own doing a mix of those two things. I started working with Netflix and fell in love with the business model. I loved their focus on doing one thing well. I loved that they have a recurring revenue model and that they were using behavioral data to continuously improve the member experience.
What was the process of deciding to write the book, writing it, and getting it picked up by a publisher?
I thought about writing a book on this topic for about 10 years— it was something that nobody else was talking about. But it took me another eight years before I wrote it. I wanted it to be good, to be sure I had a good framework and to make sure I had everything just right. In this case, waiting ended up being lucky because the timing was really good. From the time I signed the contract with McGraw-Hill I had 9 months to write the book and another 5 or 6 months before they released it.
When you write a business book you just have to write a book proposal and then you shop it around. Once you have an agreement they give you a deadline. I would advise people who have an idea for a book to write the proposal — you just need a chapter outline, an executive summary, and a marketing section on who’s going to buy it and why, and how you’re going to be able to promote it. That really matters to publishers.
What are your suggestions for marketing?
If you’re thinking about writing a book you should do as much speaking as you can within and outside of organizations. The other thing was I had a lot of media mentions because I had been proactively doing that for several years. When you’re in a company, the PR team is always looking for people to speak and to write and to be quoted, and you can actually build your personal brand that way so that when you do step out and run your own business — and certainly when you want to write a book — you have all of that already at your disposal. You’re speaking from a bigger platform.
To increase your chances of being quoted, I use HARO — Help A Reporter Out — and the other one is called ProfNet. I’ve been in the New York Times, CNN. I think I was in Consumer Reports and I’ve gotten some really good coverage. Being really specific in your response helps — and certainly being prompt. Telling them they can quote anything in the email. I always include my picture and sometimes include a visual. And I always tell them they can call me. I give them my mobile phone number and tell them to call at their convenience or we can set up a time.
Was writing the book worth the effort?
Absolutely. It took me a long time to really commit to writing it, and I interviewed a bunch of other business consultants, solo practitioners like me and asked them what the process was like and what the payoff had been. There seem to me to be two kinds of experiences that people had. One was this idea that you need to write a book, just get it out there and be able to say you have a book. Some of those books, honestly, you can tell that they hadn’t been carefully edited, and I read the and thought to myself, “That wasn’t a very good book. I’m surprised. I would have expected better from them.”
The other kind of book is the kind that somebody put a ton of effort into and you’re like, “Wow, this is really good. I wish I had written this. This is smart.” Those books are harder to write, and when it came time for me to write the book I knew I had to write a book that I’d be proud of.
It takes a lot of effort but then it can really catapult your career. Since the book has come out I’ve keynoted at dozens of conferences. I’ve been on radio. I’ve been interviewed by dozens of podcasters. I’ve done a bunch of webinars with big companies as their featured guest. I’ve gotten clients all over the world who called because they read my book, or they read an article or heard a podcast interview about my book. It’s really changed my brand.
What have you done to get the book out there?
I told myself that I was going to spend six months where the first thing I would do every day was think about my marketing strategy. I researched the people and publications that would be interested, found out who the editor or journalist was that I thought might be interested and what my point of entry was. I sent inquiries out. My publisher sent copies to a list of people that might buy in bulk or who might write about me and I sent out another hundred copies myself with an inserted note. I did some book parties and I gave away books to everybody who came. I gave a book to every person that I quoted or interviewed for the book and to pretty much every client I’ve ever had. I’ve treated this book like a business card as well as a marketing tool.
What I hadn’t counted on but had hoped for was people calling and saying, “I’m the general manager of this division at blah-de-blah big company and my team has been reading your book and we were wondering if you ever did speeches inside companies and what that might cost.” Or, “We’re wondering if you consult and how that might work and if you might be willing to come out and work with us as we transition from a transactional business model to a subscription.” That’s the part I wasn’t expecting.
What type of projects are you working on now?
Before I was mostly doing “give-us-an-answer” kinds of projects that take 12 weeks and involve spreadsheets and PowerPoints and interviews. Now my work is much more advisory. In a lot of cases they know what they want to do and I’m helping them figure out how to do it, or I’m advising them as they get to the go/no-go decision. They’re pulling together the story and they’re pulling together the research, and I’m advising them to make sure that they’re thinking about the important things. I’m guiding them on the questions they need to ask and the logic that needs to be there.
What are the questions you’re helping them with?
Frequently it’s, “Should we go from a transactional model to either a subscription or membership model?” A lot of companies have decided that they need to move to a subscription model, then come to me and say, “How do we bundle features? How do we price it? How do we launch it?” Usually I’ll ask them to step back and ask, “What are you trying to accomplish with this particular tool and is it the right tool?” That’s the bigger question. For any company that has content — music, video, news, books, games — you have an option to have a subscription. You have an option to join and be a member. In a lot of cases I’m helping them navigate the different options and to figure out what makes sense for their customers.
I’m a big believer in being customer-centric. When I give my speeches I show a slide of a Venn diagram. In one circle is ‘What’s in it for the customer?’ and the other is ‘What’s in it for us?’ You want to be in the middle, where you feel like you’re making good money and doing good work and they feel like they’re getting tremendous value.
Why have you decided to go with the more advisory type of service?
There are two reasons. First, I honestly believe it’s in the client’s best interest. If they do the work themselves they’re going to use it, where if I have a team do it offsite I’m dependent on them buying into it at the presentation and taking our outside advice. When I work this way, I see the implementations happening in a much more active and engaged way because they’ve committed an internal team.
The other reason is that I never wanted to have a big firm. I’ve always wanted to focus on being a subject matter expert as opposed to being a manager of teams and I don’t want to go into a company and be a contract manager. I’ve done that. That’s not a role I enjoy as much as really focusing on strategy.
How can independent professionals apply your insights to their own practices?
When you think about the work you do, ask yourself what you’re solving for your clients. What objective are you helping them to achieve, and is that something that’s for a point in time or is it an ongoing need? Let’s say you do a project that’s a moment in time: you write reports or do surveys and research. You can syndicate that research to your members and have lots of members that get access to your research or your point of view or your white papers. You can hold events. I’ve seen a lot of independent consultants put together their own conferences or summits or mastermind groups where they bring together people from different companies that have the same problem and the same issues. You’re the umbrella bringing together that community.
What does your daily routine look like?
I wish I could say I’m very disciplined but I’m not as disciplined as I’d like to be. On my best day I get up early, meditate for 15 minutes, do my family routine and then I go to the gym. Then my head is really clear. The night before I’ve determined the three most important things I have to get done and I bang through those. Anything else I have time to do is gravy.
The three most important things is a good closing ritual, to say, “I know what I’m going to do tomorrow” so I don’t have that feeling of a thousand things that I need to do floating in my head all night. I can really turn off and go be with my family or friends or recover from the day, and in the morning I know what I need to do. Somehow, over the course of the night, I settle in and get focused on it — ideas have percolated and I’m ready to go.
Many successful people are doing some kind of mindfulness practice. Could you talk a little bit about yours?
I’ve been doing vigorous yoga practice for 15 years. The Bikram Yoga that I do is very meditative because you do the same thing at every practice for 90 minutes. When I don’t do that I do 10 or 15 minutes of quieting the mind, like a breathing practice. It’s just something that works: I find that when I do it in the morning, those days tend to be good days.
Are there any books that you often recommend?
One that I really love that I just read is Radical Candor by Kim Scott. As somebody who’s not anyone’s boss but who does a lot of communicating and has a lot of relationships with clients and colleagues, I think it’s a fantastic book about how to give feedback in a really direct way with empathy. A book that I wish I’d written is Free: The Future of a Radical Price by Chris Anderson. It’s a great book about pricing and how to think about free and premium and free trial, which are all things I think are especially important right now. And Groundswell by Charlene Li and Josh Bernoff, which I love. It’s all about how communities and word-of-mouth works and how some people are lurkers and other people create content, and the different roles that people play in a community and getting a message out. Those are three books that I recommend all the time.
If people want to get in touch with you for a consult or speaking engagement, what’s the best way to get in touch?
My email address is on the last page of the book, email@example.com. You can go to membershipeconomy.com or you can go to my consulting site at peninsulastrategies.com. I’m really easy to find — just Google Robbie Kellman Baxter.