member retention

How To Retain Your Members For Life

For membership and subscription businesses, retention is the name of the game.

It doesn’t matter how many people sign up if no one sticks around.

Sure, there are lots of different factors that can impact your retention rate.

Things like your:

📦 Product
📣 Marketing
💡 & Onboarding

However, there is something that can be woven into the very DNA of your business with the power to dramatically impact your chance of success.

The secret to keeping your members around long term can be found in what best-selling author and membership expert Robbie Kellman Baxter calls a Forever Transaction.

A Forever Transaction is made up of two key ingredients: a Forever Challenge and a Forever Promise.

If you can identify your market’s Forever Challenge and create a Forever Promise to solve it, you’ll have the fundamental building blocks you need to create lifelong members.

We recently invited Robbie onto our podcast and had an enlightening conversation about this topic. In this article, we pull out some key ideas from that episode that will help illustrate these concepts for you.

We’ll let Robbie take it from here.

member retention expert

Robbie Kellman Baxter


A Real-Life Example Of A Forever Transaction

A forever transaction is that relationship you have with certain customers where they actually take off their consumer hat and put on a member hat. It’s when they stop looking for alternative products or solutions. It’s when they say to themselves, “I’m going to trust this company to solve my problem or help me achieve my goal on an ongoing basis.”

A great example of this is OralB.
retaining members
At first glance, you might think that OralB is just a toothbrush company. But here’s the thing: you can either be in the toothbrush business or you can be in the healthy mouth business. It’s a subtle but critically important distinction. The forever promise that a lot of people want is not to have an awesome toothbrush, but instead, to have a healthy mouth.

Here’s what that looks like:

OralB recently began incorporating an app with the toothbrush. This lets you track how long you’re brushing each day and whether you’re preferring one side of your mouth or the other side. It’ll tell you if you’re pushing too hard or you’re not hitting certain parts of the tooth and give you feedback. And it’ll also tell you when you need a new brush head. The goal of all this is to help you achieve their forever promise: to have a healthy mouth.

A lot of companies are very focused on their product – instead of being focused on the outcome they’re delivering to their customer. The closer you can align the way you package your value to the goal that your customer has, the more likely your customer is to trust you for the long term.

This is what we all want as business owners. For the customer to come, stay, trust, and prefer you. When this happens, it of course maximizes lifetime customer value. But, it also allows you to continue to evolve your offerings to stay relevant over time.

“The closer you can align the way you package your value to the goal that your customer has, the more likely your customer is to trust you for the long term.”

member retention strategies

What Happens When You Break A Forever Promise?

Remember Movie Pass?

They came out with a forever promise that was almost too good to be true, right?

It was something along the lines of $10 a month to see as many movies as you want. Anywhere, any movie. We all did the math in our heads and said, “Well, that’s ridiculous. But sure, why not? That’s amazing.” It’s interesting how once you put an offer out there, people quickly accept that as the promise like, “Okay, great. That’s what they’re offering me forever.”

The risk of a membership is when you make that forever promise, the customer assumes that they don’t have to pay attention. They assume that you’re going to continue to deliver on that promise forever.

And what happened with Movie Pass? They changed the model. They made the offer much less generous and raised the price. While it wasn’t such a terrible deal, it was really a lot worse than what they offered initially. Because of that, people felt cheated.

I’m sure you can guess what happened next.

They lost a huge percentage of their subscription base.

I think the reason that Movie Pass initially had such a sweet deal was they thought they were going to be able to aggregate data all this data. Then they could sell data on movie goers’ preferences. Things like what movies they saw, how long they sat, what popcorn they bought, and all kinds of other metrics they were hoping to track. But they never got to that point.

To have that kind of ambitious model where you’re not going to make real money until you have this huge pile of data is you have to have really deep pockets to wait that out. They just didn’t have the resources to pursue that strategy and they didn’t have the pricing to have a profitable business as a free-standing business so they just kind of fell apart.

membership retention ideas

The Power Of Keeping Your Forever Promise

Now that we’ve seen what can happen when you break the promise you make to your members, let’s take a look at what happens when you keep it through thick and thin.

In this example, we’ll examine another company most people wouldn’t consider a membership business: The Miami Heat.

A very big problem for a lot of what I call “hit driven” businesses like the Miami Heat is this: some years they win, some years they don’t. Some years they have really charismatic, beloved stars. Other years, not so much.

What often happens when things are good is that they’ll get lots of new subscribers, lots of season ticket holders. Then when things are bad, all those subscription holders go away. They’re not actually loyal to the business. When this happened with the Miami Heat, I think one of the things that Kim Stone – their VP of business development – realized was, “We need to treat our best ticket holders – our biggest fans – like members.”

From there she said, “They come for the name on the back of the jersey but want them to stay for the name on the front of the jersey. We want them to feel an affinity and a relationship with our team, with our stadium, with being part of this organization and less focused on whether or not we win or lose because we don’t control that. More focused on the journey that we’re all on together, the enjoyment out of their fandom.”
member retention ideas
Here's a story that perfectly illustrates what that means:

Shaquille O’Neal left the Heat in the 2007/2008 season. When he did, their season ticket sales plummeted. At that point they decided to become more fan centric. They empowered all of their customer success team members to be much more than just customer support. They don’t wait till there’s a problem, they’re not just sales people, they’re empowered to do whatever it takes to delight their members. They give them all kinds of special benefits that allowed them to really maximize their enjoyment.

We all know when you go to a basketball game or any event, it’s not just about the entertainment on the floor. It’s about how much of a hassle is it to park, where do you have to go with your tickets, how good is the food, do they welcome you, do they make you feel special, and so on?

From that point on, the Heat really focused on that and they did it when things were not going all that well. Then something interesting happened. Things started going well for them again in 2010 when they signed LeBron James and Chris Bosh and became a championship contender. Immediately, there was once again this high demand for season tickets.

Can you guess how they responded?

They didn’t raise their prices.

One of the things about a membership is you want to reward your most loyal fans. You want your most loyal fans to feel like, “If I make a forever transaction with you, I don’t have to be on the alert to make sure I’m getting the best deal anymore. You’re going to take care of me in exchange for my loyalty and my trust, you are going to be trustworthy and give me a great experience on an ongoing basis.”

I think that’s something that almost any business can keep in mind. In a lot of industries, they treat their most loyal members as if they were stupid. And I’ve had many prospective clients, entrepreneurs, and executives come to me and say things like, “Oh, our subscribers, our season ticket holders, our members, they don’t even look at how much we’re charging them. They just trust us so let’s make the candy bar smaller. They don’t notice. What are they going to do? Let’s make the newspaper have less content. We don’t raise their prices but let’s give our new members a lower price and we’ll just keep charging our new members a higher price because they don’t know.”

“Membership models work best when the subscriber has a what I call a “forever challenge.” Something that's going to go on for an extended period of time and where the business can provide a “forever promise” to justify a long-term relationship.”

Forever Is A Long Time: Focus On The Big Picture

Here’s the moral of the story:

The Miami Heat could have focused on the short term and made more money when the demand for tickets went up again. Instead, they chose to see the bigger picture and focus on the relationships they’d created with their subscriber base.

Lots of businesses have that happen when they say, “Hey, we can optimize right now for short term revenue and we can hit our quarterly number by adding in this extra fee.” There’s a temptation to just optimize for the short term. I think what you need to understand if you want to have a long-term membership model and you want to have that kind of golden goose relationship, you have to have some self-restraint.

One of the things I’ve noticed – and I’ve been doing this a long time – is a lot of closely held businesses and family-run businesses are especially good at subscriptions and memberships because they’re thinking about legacy.

They’re thinking about the value of their brand for the next generation. When you’re thinking like that, the thought of optimizing and doing something a little tricky for short-term revenue seems foolish. Right? Why would you destroy your brand just to get a little extra money in our pockets right now?

membership retention strategies

Final Thoughts

We hope you enjoyed this peek into the heart of some successful (and not so successful) membership and subscription businesses.

If you like what you learned here, we have a feeling you'll love the full podcast episode we recorded with Robbie.

Come to think of it, she's actually appeared on our show twice!

Each conversation packed full of valuable information and insights you can use to grow your membership or subscription business.

You can check them out here:

How To Build A Forever Transaction With Your Members
The Essential Guide To Pricing For Membership Sites

If you have any questions, comments, or any other thought you'd like to share with us, leave us a comment below and join our conversation.

We'd love to hear from you.

Matt Brown

Over the past 6 years, Matt Brown has worked closely with some of the world's most successful membership and online course entrepreneurs. He's seen first hand what works – and what doesn't – when it comes to starting, building, and growing online businesses. On top of that, Matt was responsible for screening all the guests we've had on the Subscription Entrepreneur podcast. This allowed him to hear the best membership marketing and growth strategies from top authors and experts. Now, he shares everything he learns with you here on the MemberMouse blog. Subscribe today so you can discover cutting-edge strategies that can help you grow your membership, subscription, and online course business.

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