Membership and Subscription Growth

Most subscription companies think if they just increase the value they deliver to their members, that retention will improve. While adequate value is crucial, delivering more value does nothing to increase retention. Instead, you grow your community, create engagement and build the value of what you're delivering and show the customer how what you're delivering solves problems. Then show them how they can use it in their life and how they can get tremendous value. It's not about the product you're delivering, you must demonstrate how to use you're the product you are delivering to improve or solve problems in your members' lives. There are a lot of great insights in today's episode with my guest Leslie Emmons Burthey, VP of Marketing for the successful subscription box, FabFitFun. A subscription box with a great retention rate, even though it's one of the premium priced offerings within the subscription box niche, thought by many, to be dominated by discount offers. It's Not About What You Deliver, It's How What You Deliver Impacts Your Subscriber's Life One of the things that sets FabFitFun boxes apart from their competition in the luxury subscription box business, is the multi-page, color magazine insert that tells the story of each product. Customers can see the time and thought that goes in to each product that is included in the box. The magazine also gives information on how to use the products. While the monetary value of each product is important, teaching the customer how to use the product in their life is what makes it valuable. Leslie says, "Really to understand the product we want you to know why we chose that product and how we think that that product is going to enhance your life. " The magazine also highlights customer experiences with products and often tells the stories of the buyer, delivers announcements, enhances the customers knowledge of each product and how to use it in their lives. A Community Generates Retention without Increasing Fulfillment Costs Leslie says, at FabFitFun, "It's not just about the physical product, it's also about the community you build. "Customer Forums give people a place to give feedback about the products, share comments, personal stories, and interact on a deeper level. There have even been personal meet ups and spin-off communities in some of these forums. When customers have relationships with other members, their loyalty extends well beyond the products they receive each month. They don't want to leave because they'll lose the relationships, and your member satisfaction and enthusiasm remains high. Deliver More of the Value Your Customers Want FabFitFun looks for new ways to engage customers and add value beyond the products inside the box. Their TV channel has fitness classes and soon will be launching a food show, more benefits of membership, that don't fit into a box. A robust referral program also helps bring in new subscribers. The most recent box was a contest for videos and getting subscribers engaged by promoting the box out to their list and contacts. "People love sharing things that they love with other people, and so having a contest was just a fun way to take the behavior that was already going on and tell our members: We see you. We appreciate you. We would love to interact with you and make this fun and exciting." I hope you find the full interview with Leslie as fascinating as I did! I think we all can learn from her how build community with our customers, add value to your subscribers, and think beyond the box for creative ways to keep people happy and continue subscribing. To learn more about how to deliver benefits members want and will pay for, listen to the full interview with Leslie on the

Thousands of new subscription boxes have launched in the last two years; however, only a few have reached one thousand subscribers. Sadly, many failed boxes did manage to grow to 10,000 or even 50,000 subscribers initially. What are the differences between the subscription boxes that grow versus the ones that never launch or those that stall? This answer can help you grow any subscription business to generate steady monthly recurring revenue. Stefan Pretty runs a software platform for subscription boxes called, Subbly.  Thousands of boxes are managed with his software, and he has access to their proprietary numbers. I asked Stefan what the difference is between subscriptions that grow within a few months from the ones that never seem to get off the ground? Decision Drives Success He said, "People who tend to actually succeed in gaining traction quickly, are the ones who, either have a: experience, or b: sheer determination." It takes tremendous drive to stay focused on what customers want and need, and are willing to pay for. Businesses who don't succeed often over-focus on the wrong things or lose sight of customer satisfaction along the way. Maintaining a subscription base requires constant engagement with the customer. Make All of Your Marketing More Effective Stefan says, start by identifying your ideal customer: "The first thing is, figure out who you're selling to, and then once you know who you're selling to, offer them the opportunity to buy it, and keep tweaking it until it is exactly what they want." Once you identify your customer, make it easy for customers to give you feedback. Be willing to change based on their comments. They may want something entirely different than you expect. It doesn't matter what you think they want, "At the end of the day, your customer is your product." Retention is the Key to Subscription Growth Ultimately, " It's the perceived value of the items in the box that's really important." Constantly ask yourself, "How can we add more value?" People love the element of surprise that comes with receiving a subscription box. It's the "hook" that keeps them coming back for more. Once they are hooked on your subscription, keep them satisfied with excellent customer service and communication. Make sure every aspect of your subscription, from delivery, to marketing, to billing, aligns with your customer's desires and expectations. Excellence in all aspects of the subscription is essential to retaining customers and boosting revenue. To learn more about how to deliver benefits members want and will pay for, listen to the full interview with Stefan on the Membership and Subscription Growth podcast.

Do you find yourself competing for subscribers against free or low-priced content? What if you had to compete against the Wall Street Journal, Investors Daily, Financial Times, Barron’s, MSNBC, Yahoo Finance and thousands of other paid and free resources. Dan Fink, managing director of Money-Media, offers innovative solutions and lessons learned from his years of competing against some of the biggest publishers in the world, and winning. I recently interviewed Dan for my Membership and Subscription Growth podcast. In a world where everyone is playing on the same connected stage, Dan can show you how to compete (and win) against the biggest publishers in the world. Create a Quality PublicationDan says the first step is to “Make sure you have a product concept, a market, an audience that you can serve really well.” Forbes and other financial publications are essentially marketing to the same consumers, but Money-Media distinguishes itself by targeting a specific audience and offering content that is not easily available anywhere else. Money-Media also invests heavily in the staff and technology to create a quality publication: “We have just really smart journalists and editors that produce really good content. And we invest in the technology that delivers it. Whether it’s through company websites, mobile and tablet apps, RSS feeds, or CRM integration, “however people want to consume our information, we want to make it available in all those channels.” The Decision Maker May NOT Be the Person with the Biggest TitleOne of the challenges in subscription sales is getting your product to the person or people that have the money and the authority to make the decision. Dan’s team learned over the years that most corporate boards have a specific liaison within the company who control the majority of the communications that goes out to the board. The board will usually reach a decision by consensus, so the old sales question “Who makes the decision” is not really relevant. Instead, ask your lead contact if they would like a personal free trial subscription. Once the publication is in the hands of this person acting as “gatekeeper” for board communications, the content should sell itself. When the trial is over, Money-Market converts these free subscription l to sales by only offering licenses to corporations – not individuals. This motivates the gatekeeper to reach out personally to the people who make the decision and have the budget to purchase subscriptions. Monitor Subscriber EngagementCustomer service is key to retaining subscribers. Money-Market uses a number of monitoring system to make sure clients are receiving their subscriptions. Dan says, “There's all sorts of things that happen along the way, so we have a number of sort of digital and human monitors in place making sure that we're always able to deliver and they're always actually receiving in the end.” “It's really about having a 365-day mentality that if you're going to try and renew these people a year later, your job starts in day one to make sure that they have a good experience all year long. And then the pressure's off when renewal time comes. Find out more about Money-Market’s products at money-media.com. You can find information there on each publication and link through to a free trial. Listen to the full interview with Dan on the Membership and Subscription Growth podcast.

The real money in a subscription business is not in getting new subscribers, it is in keeping them and increasing their value. They might visit if your sales process is good, but they’ll only stay if your content is truly engaging and you are communicating with them in an entertaining and engaging way. Jim Sinkinson founded Infocom Group in 1980 and sold it in 2015. The company produced online data services, newsletters, webinars, books, special reports, ad-based media, live professional development conferences and seminars for the PR/corporate communications market. Jim knows exactly what to create in order to get your members to be engaged in your product – and keep paying for it. He’s been teaching this to editors and content creators for decades, both within his own business, and within his consulting work. I recently interviewed Jim for my Membership and Subscription Growth podcast. In a world of free information and lead generators, Jim can show you how to create the content your subscribers are craving, and are willing to pay for. Compelling Content is Key Jim says: “content is a key to many membership experiences.” People join for the content that you provide. That content could be in a newsletter. It could be a chat group, or at a conference or coaching program. It’s a challenge to create content worthy of a high membership price and a long-term relationship. Many organizations don’t spend equivalent energy, time and money on improving the quality of the information or the content that they are providing to subscribers or members. Today, we’ve got this content marketing industrial complex that’s teaching folks how to churn out content for free in order to try to generate leads and attract customers, and position marketers as experts. Yet, there are all these publishers and associations out there trying to sell access to their content. As Jim Sinkinson said, “Expertise isn’t what folks want and will pay for. Instead, it is change, benefits, impact on their lives.” Connect the Promise to the Content While it’s never been easier to reach customers, and grow your business on a global scale, hiring great writers doesn’t guarantee great content or great results. Often, content creators are separated from the rest of the operation. The challenge is to get both the marketing team and the content creators together to agree on what promise is being offered to the consumer. Most writers, editors, or conference organizers just don’t realize that their job is to sell the subscriber on a transformative experience. “Over the years, I’ve come to the realization that even though I’m dealing with extremely intelligent people, very capable people, and highly motivated people, just to tell them how to do it, and even leave them with a set of rules for how to do it, is not enough to transform them into brilliant copywriters, or into content providers who can think this way. It is a matter of consciousness.” Marketing can sell all it wants, but if the content doesn’t match the promise, you have a problem. Bridge that gap by bringing those two teams together and getting them to agree on what the job is. Create a Transformative Experience Jim says, “It’s not enough just to deliver information, the draw is what accessing this content can do for them.” Knowledge alone doesn’t change anything. “What we want to do is, not to focus on the knowledge that we’re giving somebody, but what the knowledge can do for them, that is the benefit.” Just buying the product once is not enough – they have to use it or they will not see the value of an ongoing relationship. Keep in contact regular contact with customers. Highlight what they can do with the knowledge you are providing. Give them case studies that allow them to see the impact your strategies can have in their lives.

When you are delivering subscriptions to hundreds of thousands of customers for more than three decades you develop a profound understanding of how to attract, retain and increase the value of your subscribers. Although he became president and COO of Guthy-Renker, that has at least one billion-dollar subscription product, Proactiv, Georg Richter began his career with Double Day Book Clubs, then BMG music club before today, the CEO and founder of OceanX. Georg has been an executive at the highest levels of some of the largest, fastest-growing subscription businesses for the last three decades. And, for you, he reveals the biggest subscription mistakes to avoid, how to deliver value subscribers will eagerly pay to receive, and the single most effective strategy in jump-starting membership growth after it has plateaued. How would you like to sit down with a subscription marketing master to learn how to grow your recurring revenue? Well, today is your lucky day. Are You Making Any of These Common Subscription Mistakes?1. Choosing the wrong product Too many subscription businesses are starting up with great enthusiasm and fading away faster than they started. To secure a good start, one of the first things to do is study the market. Find an area in the market, a niche, that has isn’t currently being served. 2. Failing to secure enough funds on the front-end Even though the wonderful byproduct of the subscription model is recurring revenue, you need to have a source of funds to get things started. You will have testing and development costs, shipping costs, marketing costs, etc. that will start before your first month of recurring revenue comes in. “The most important thing to understand is, it needs money, it needs upfront investment, it needs careful planning,” advises Georg. 3. Investing funds in incorrect proportion for growth You need to be liberal with your media promotions and conservative with inventory orders. With all of the digital marketing opportunities available today, you should be experimenting with as many as possible to see what works best for your target audience – interactive websites, social media, blogging, videos, and influencer marketing are just a few of the many resources available. Georg shares, “One of the mistakes I see is that people don't plan for any media spending. They have a lot of passion around the product, they just want to start it, but then they have not enough money to promote it. That's a mistake.” And for inventory, Georg advises against getting carried away. “People say, ‘No, I'll have 100,000 members immediately,’ and then they buy inventory like crazy, and they sit with a pile of stuff they can never sell, which is a sad story. I would always encourage people to be conservative in the beginning, rather work with scarcity and build up slowly. Conserve your capital. Be very cognizant of capital and spend it in media, and try all kind of channels you can try.” 4. Letting your emotions override your planning Too many subscriptions are starting with high enthusiasm and no plans for maintaining that enthusiasm long term. Georg suggests, “If you start a subscription you've got to think ahead down the line, what are you going to do in three, four, five, six months? Because there will people, if you do that well, stay with you for a long time. You have to always give them something interesting, original, value, but the main thing is it has to be interesting. You have to be inspired to get that subscription, there's so many out there.” How to Create Value Subscribers Are Willing to Pay ForWhether you are a publisher competing against free information or sell physical products and you are competing against retailers,

Attracting new customers is the hardest, most expensive aspect of any business. Getting attention from your prospects, encouraging them to trust you and to take action, to do business with you, takes a tremendous amount of work. For a small business marketing nationally, it can be impossible to break through the clutter and get your message heard. However, a membership program instantly positions you as an expert in your field, making your communication welcomed by your prospective customers. It makes you a celebrity in the eye of your consumer. And, when it comes time to sell your business, you generate the sales price from your core business and you can sell your membership as well. My longtime client, David Lucca, was co-owner of an investment management firm. His firm worked exclusively with airline pilots, and he was looking for a way to attract airline pilots to become clients of his firm, versus all of the financial investment choices out there. David launched a new stand-alone company, the Airline Pilot Financial Association, to become the marketing arm of his financial management firm and provide great custom created financial resources for airline pilots across the country. I recently interviewed David for my Membership and Subscription Growth podcast. He has moved on from the investment management firm and the association he created, but what he has to share about his experience is astounding. He reports that, after starting the association, he grew his firm by over $150 million in just a few years. David shares some advice for how others can do the same. A Membership Establishes Yourself as an ExpertRather than competing like everyone else, you distinguish yourself by being the leader of your membership. David shares, “Before we started the association, nobody knew who we were. We had a few clients who were pilots. They flew with American, and they had just come to us by way of referral. I decided that I would like to reach out to that group as a primary niche for our firm. The wonderful thing of course about entering a niche with something like that is you have instant credibility. So, when people say, "Who are they?" The answer was, "Well, they're the ones that started the US Pilot Financial Association. They're the experts on our retirement plans." By creating a membership association, David was able to jump in front of a long line of competitors. The membership association established a relationship of trust, expertise and authority with the members. When you’re doing business in an area of heavy competition, where there are tens of thousands of other businesses trying to get in the face of your customers, this can be a game-changer. It's easier to be an expert when you tightly refine your niche. They didn’t just narrow their target audience to pilots, but went as far as limiting it to the pilots of just 3 airlines. This narrow niche allowed them to be more specific in their message. “As soon as you speak with one voice, that process of creating value that results in a transformation is just so much easier. It's just like instead of your brain going 10 directions, your brain just has one thing to think about. And the process of looking at their specific dangers and the specific opportunities that are in front of them, it all just becomes so much clearer as to what you can do to solve their biggest problems. Every time you go through another round of value creation, what you're offering to your niche is more and more powerful,” advises David. Celebrity Power to Generate Referrals and Excitement No one likes salespeople. And, ordinarily, a chance meeting with someone who is looking to sell you something is not an enjoyable experience. However, everyone is excited to meet a popular celebrity. David shares a memory of being in line at an airport.

Would you like to discover the marketing secrets from the team that grew Beachbody from $100 million to more than $1 billion in revenue? Babak Azad was a leader within the marketing team that helped launch Beachbody into an iconic brand within the fitness industry.Today, Babak Azad is the founder and CEO of Round Two Partners which works with other brands and subscription companies to help them do the same. I recently caught up with him for an interview for my podcast, Membership and Subscription Growth. While Babak and I discussed several breakthroughs on the podcast, here are two that can have an immediate impact on your subscription revenue growth.Position Your Product as a Premium Product That TransformsYour subscription product is more than a simple transaction and needs to be treated differently. Rather than selling that product, you need to be selling results. The results that your customers are going to personally experience by using or receiving your product are where the focus of your sales message should be. Every time you mention your product, rather than talking about it, talk about the transformation or how that customer will feel because of your product. “You’ve got to be different from what everyone else is talking about,” suggests Babak. “I am talking so much more about brand and, really, the sense of experience, because that is one of the bigger things that I'm starting to see across pretty much every industry. That focus on creating an experience and creating a memory and stories around it is a big deal, but at the end of the day, it's, what's the promise? What is, whether it's the problem or solution, what is the thing that you're trying to either solve or help someone with? Are you delivering on it? Are you actually solving that? To what extent? How are you doing it? Things like that.” Your customers don't care about what you're going to deliver, they only care about how it's going to improve their lives or help them. Watch Your Membership KPIs to Discover Growth OpportunitiesFew subscription businesses are spending enough time looking at their numbers. Running your subscription business without proper KPI’s is similar to taking your family on a road trip without seeing where you are going, having a speedometer or a compass. KPI’s are like having GPS navigation for your subscription revenue growth. They tell you exactly what to do for fastest growth. Babak suggests you start with recording the lifespan of your subscribers’ activity. Measure how long your customers stay with you. How many billing cycles do they stay through before you lose them? Tracking this activity of each subscriber will reveal trends and opportunities to make changes to the subscription cycle at the point where you seem to be losing them. This data also helps you determine where to focus your time, staff functions, and dollars to promote growth. “You don't need a statistical tool. You need Excel and a data dump, and you will at least start to get there. Then undoubtedly, it raises questions and there are things that will start to trickle up. You at least have a baseline. If that means that you don't even go and backfill for 2016 and 2015, fine. Just start with where you are. Then, you've got to create a bit of a process that every month or two months, whatever it is, you update it and then you are trying to test and optimize, to improve those metrics,” adds Babak. Whether you are starting your subscription business or years deep in it, it is never too late to implement these practices of making your marketing message about your product’s results and then measuring the activity of your subscribers to find growth opportunities. You can discover more from the full interview with Babak Azad on the

Too many people create a subscription business because they heard it’s a lucrative business model. While it’s true that the membership model can help you scale your company faster, generate long-term stability and enable you to grow a vibrant tribe of thrilled members, generating revenue can’t be your only priority. Instead, when you focus on generating a positive impact on your members lives, they’ll reward you with membership and subscription growth. In a recent interview for the Membership and Subscription Growth podcast, I spoke with Tim Broom, the co-founder and CEO of ITPro.TV. Tim transitioned to a subscription business model four years ago and is set to hit $8 million in revenue this year. What he has done, you can do. Your product may be much different than his, but the keys to his success can be applied to any subscription model. ITPro.TV is, as Tim describes, “a Netflix for learning information technology.” They offer a low subscription price for access to a library of videos for people to learn and get certified in areas of information technology and security. At around $30 per member per month, they’ve experienced a phenomenal growth rate. Tim believes this success is a byproduct of having the right focus, value, and onboarding programs in place. Removing obstacles for your members to succeed In a world where so many businesses are focused on profit, Tim has chosen to focus on a real, profound concern for the outcomes that each member experiences. He says, “you take care of your members, and we call them members, they're not subscribers or customers, they belong to something.” To explain further, Tim shares that his “job description is to remove obstacles to people's success. With that mindset, we wanted to bring a different type of learning, a different way of learning. Your obstacle may be geography because of where you're located, you might not be near an institution that can provide high quality training for IT; or maybe it's money, because you don't have the cash or maybe you can't get a loan in order to do it. A lot of times you have young families with kids and someone wants to change careers, but they really can't afford to do it because they're working full-time to support their family and they can't do both. We want to remove those obstacles.” The result of this transformation focus is an audience of loyal members who believe in your product and don’t hesitate to share their success stories with others. Delivering a high-quality productWhen asked about having to compete with all the free information and training videos available, Tim believes that their success comes from the value of their product. They are an established and trusted source of content as opposed to the unknown sources producing the free content on YouTube. He asks, “as a business owner, who do you want to be working and making changes to your network that involves your email, or your website? Do you want them to learn from a trusted source or from someone on YouTube?” To make certain that the value of ITPro.TV grows for each member, Tim adds, “We originate and create all our own content that is on our site. So, we're also a video production and content creating engine. Our team creates these videos and offers them up and organizes them in a way that an IT professional can get the skills and knowledge that he needs to be able to perform a task and it also grow with him as the technology changes.” He states, “one of our core values is to create new effective content every day. So, every day, we're in the studio creating new content, so the value to a subscriber is greater a month after they subscribe because we've created approximately 400 more episodes, which happens to be about 25 minutes, the attention span of an adult.

Passion, customer impact, focus, feedback and service are crucial for maximum subscription and membership growth. For an example, take a look at PopSugar and their subscription box, PopSugar Must Have. While I recommend you subscribe to learn more about building your own subscription program, here’s five “Golden Rules” you can use immediately from a recent interview with Lisa Sugar, PopSugar’s founder and CEO. Golden Rule #1: Choose a Product to Sell That You Can Be Passionate AboutPopSugar got its start with a simple blog about things Lisa Sugar was passionate about – celebrities and fashion. Because of her passion, she was able to pour herself into a business that just continues to grow. The amount of time it takes to oversee all the nuances of a subscription business can be overwhelming, and that’s where passion is needed to find the energy and focus you need to keep going. Lisa is a great example. Even with a team of more than 450 employees, Lisa is still curates each box herself. “Our editors are testing products all day long,” she shares, and she and her head merchant review each new product launch and new brand that her editorial team sends her way. She also frequents trade shows to scour the floors for ideas. That’s passion! Golden Rule #2: Choose Items for Each Box That Fulfill a Need or Want of Your SubscribersWhat you deliver to your subscribers must create excitement and engagement. Lisa chooses to offer her subscribers more premium options than other boxes. Her subscribers pay more, but they receive full-size items of great quality. “I think it’s very much quality over quantity. We definitely pride ourselves on thinking long and hard about what we're putting in the box and if it is higher quality, maybe we have one less item than we would one month to the next because of that.” “I like to say nothing in the box should go to waste, so if for any reason something isn't for you, it would be a great gift for someone else. The idea is that you can really act and use everything and if for some reason you personally can't, hopefully a friend or co-worker can, or you give it to somebody as a birthday gift later,” says Lisa. Golden Rule #3: Have a Plan for Member RetentionMember retention is the byproduct of engaging your subscribers so they continue to find value with your subscription. With PopSugar Must Have, members receive various seasonal offerings. They also get early access into knowing teasers for the next month’s box. Like I always say, turning your subscribers into a “vibrant tribe” is key to your membership growth. Lisa adds, “We've actually done some really fun things where we've reached out to those loyalists and offered additional boxes, sometimes free, that are advertising-funded but still curated the same way a regular box would be.” Contests that include working with brand partners are another activity that PopSugar includes in its retention arsenal. “Being able to come up with fun, creative ways to work with a really great brand partner who loved what we were doing with the box, who then let us create a special, fun additional box with the same types of items and brands that we love working with - that is something that is exclusive to the loyalists who have been a part of the Must Have box family for a while.” Golden Rule #4: Pay Attention to Customer Responses and FeedbackUnderstanding what your customers like about your subscription and want in the future is crucial to your membership growth. With PopSugar, “we really look at all the data and we look at what they're responding to. We do a survey after every box that goes out to figure out their favorite and least favorite items.

Customer success determines retention rates in the membership economy*. If your member does nothing with what you sell her, she’s going to cancel your subscription. The old model of leaving it up to your customer to figure out how to get value from what you sell may have worked in the old one-and-done product sale world. Your membership and subscription growth is determined by how well you ensure customer success. It involves helping your members find a lifetime value in subscribing to your product or service. I refer to it as turning your subscribers into a vibrant tribe of followers. And, it starts with how you attract your them. Know the Difference in Marketing to Individual Transactions Versus Subscription CustomersWith businesses that sell via individual transactions, customers are making their decision to buy from them based primarily on price. With subscription membership programs, you must be about more than a good price, or they won’t remain your members for long. Customer success is about making your members so excited about your subscription program that they can’t help but tell others about it. It starts with asking yourself, “What is the transformation we are making when a person becomes a member.” You see businesses like Mac do this, when they promise a way to do everything simpler, opening a laptop and saving time by being a Mac user. Disney does this when they promise you a magical experience. Harley Davidson gives their customers the chance to transform into a rough, tough, cool-guy image just by putting on their leather. It’s about the subscriber believing in the transformation that your product/service is offering, and you need to know what that is and market it. This shift in marketing creates member loyalty, improves member value, and offers your members a community to belong to. Creating a Vibrant Tribe of FollowersWhen you have subscribers experiencing the transformation that you promised, you have begun the process of building a vibrant tribe. You’ll find that you don’t have to spend more on marketing or delivery. Each new member sticks around longer and they’re going to refer a friend. They will bring others in by sharing their stories. And, you can share their stories too. Feature your members’ transformations in your social media channels, emails or newsletters. Make them celebrities! When you give people this – when you focus on that power that your product delivers versus the product itself - it totally transforms your retention and how your business grows. Building a tribe of followers, a community of subscribers who find real value in your product, improves your member retention. This gives you the foundation for charging premium prices and offering upgrades to further develop their commitment. Altogether, this is the product of a focus on customer success. *The term "Membership Economy" was created by Robbie Kellman Baxter, author of The Membership Economy. For more information on creating a vibrant tribe of followers, listen to the full interview on Membership and Subscription Growth. This interview was originally conducted by Kim Walsh Phillips for her podcast, Morning Coffee Marketer. Kim is an award-winning speaker, author, podcaster, and busy CEO leading three separate companies. She's sold more online than anyone else,

While pet owners enjoy spending money on their pets, the pet supply business is already crowded, cluttered and challenging to break through. But, with a keen eye to opportunity, Deena Bronz discovered an underserved group of customers that were a perfect fit for the *subscription economy (the term "Subscription Economy" was created in 2007 by Tien Tzuo, Founder & CEO of Zuora, Inc.) Deena Bronz is the co-founder of KitNipBox, a curated monthly box of cat products, including toys, treats, accessories and even Halloween costumes. Deena shares her advice for finding the right product or service to offer, building a community for the members, and focusing on retention. Discover Opportunities by Digging Beyond the SurfaceThe single most important question to answer before launching any subscription service, including subscription boxes, is, “Who is my target customer?” While most start-ups fall in love with their product, service, SAAS tool or the contents of their box, the smartest start-ups focus on their target customer instead. Then, they create a product that meets the needs and wants of that potential subscriber. When Deena started her market research, she focused on the pet industry. She had a long history of volunteering with pets, and she was able to pour her personal interest into her research. And although the best industry includes huge corporate players and several existing subscription boxes, her research revealed a gap in the market for servicing cat owners. Deena reveals that “80% or more of the shelf space in pet stores is dedicated to dogs, and much of the innovation in the pet space has really been focused on dogs.” Once you have determined your product and target audience, Deena recommends taking a lean startup approach as described in the book, The Lean Startup, by Eric Ries. “The gist of my advice would be to test early and test often, and experiment and see if there's demand for your product. Rather than just doing market research, put together the first version of your product and try to actually sell it and see if people subscribe to it.” She adds, “the most important question you can answer before investing a great deal into establishing your own operations, or maybe building that perfect website instead of a basic one, is whether or not people will actually buy your product.” Member Retention Starts by Delivering a Great ProductMember retention involves staying engaged with the customer as well as continued attention to your product or service. “If you don't have a wonderful and joyful unboxing experience, and if both the owner doesn't feel that there's value and quality there and the cat doesn't engage with the item, then you're going to lose that customer sooner rather than later,” Deena warns. To keep that unboxing experience positive requires a lot of product testing. At KitNipBox, product safety is their first concern. When a product passes their stringent cat safety requirements, they experiment with features to delight both the cat and the owner. “If the cat doesn't engage with our box, no matter how cute or how high in value the human thinks it is, they're not going to keep subscribing.” Deena adds, “if you do your homework and you do things right, you can satisfy a human personality and similarly, you can have a great product for a cat personality too.” Discover How to Turn Gift Subscriptions into Customers!Advice from @LisaSugar @dustinmcadams

Within the middle of the huge subscription box boom is one person with a single website, MySubscriptionAddiction.com. Started from an obsession of subscription boxes, it’s become the single largest affiliate for almost all subscription boxes today. And, because their editors create so many unboxing videos, get feedback from followers and see what works from a sales promotion perspective, MySubscriptionAddiction.com is the perfect place to learn what’s working in subscription marketing today. Liz Cadman, founder of MySubscriptionAddiction.com, is one of the best sources for insight into success in the subscription economy. MySubscriptionAddiction.com provides reviews and a directory of subscription boxes. They publish unboxing experiences and feature customer reviews to a growing and eager audience of subscription box enthusiasts. Her website currently averages a million visitors a month, with over 10 million pages viewed each month. MySubscriptionAddition.com followers are the most informed and motivated subscription buyers today. According to Liz, the average viewer of her website is 95% female, in the age range of 25 to 34, who has subscribed to at least 2 or 3 boxes at any given time, and spends at least $100 per month on boxes. And this average viewer has about seven more boxes on her wishlist too.   And even though the MySubscriptionAddition.com audience is mostly women, they are still the top affiliate for a lot of the boxes that are targeting men. Women are the primary buyers for all subscription boxes, whether the box targets men or women. With such an immense amount of data on boxes and their customers, Liz is positioned to share valuable and proven tips for those wanting to enter the subscription economy. For starters, when considering the price point of your box, she recommends going for a higher price point, around $39-$49, as opposed to starting off with a low-price box. An additional recommendation for starters is “going quarterly so that they have more time to figure out what's working. This gives them more lead time on everything and they can do things in a seasonal manner. A lot of our readers who have quarterly subscriptions that they love would still love to get even more from them. So, start out quarterly and see how that type of timing is working for you. You can always add an add-on option in the future - maybe a $10 monthly boost where you get one of your favorite products a month in addition to the quarterly box.” My SubscriptionAddiction.com recently launched an MSA Insider's Program. Liz shares that “we have a panel of thousands of super passionate subscribers who want to give feedback to subscription box companies. They fill out surveys for us. They give feedback on products. If you are looking for either testing out the concept of a box, or you're an existing subscription box company and you want feedback on future products, or just to get a better sense of our demographic and ask all sorts of questions, we have those opportunities as well.” If you are looking for ideas and inspiration to create your own subscription box or grow your own membership program, Liz recommends studying Rachel Zoe Box of Style, FabFitFun, PopSugar Must Have, Loot Crate, Culture Fly, and Ispy. Discover more insights from Liz and her followers of MySubscriptionAddiction.com by listening to her interview on Membership and Subscription Growth! Be sure to visit

It’s often a huge challenge to figure out what you should deliver to your subscriber members each month for maximum membership retention and renewal. Plus, you want to deliver something that’ll create referrals and social buzz. This challenge is even more difficult when you are a subscription box trying to negotiate with a company to deliver hundreds or thousands of items so you can ship them to your subscribers as part of their monthly subscription box. There must be a constant balance between getting your hands on products and investing the time and relationship capital to obtain the ones that’ll generate a huge impact. This is the same for a SaaS company choosing which new features to develop or a publisher working with editors to create content. In my recent interview with James Erickson, owner and CEO of Stridebox, a subscription box service for runners, we discussed his solutions to the problems of getting items for Stridebox that drive engagement, how to balance content that members would readily appreciate versus delighting them with new discoveries, as well as how to engage subscribers to create a community. James came from a background in newsletter publishing and transitioned into subscription boxes. From the outside, it may appear that these are very different, but to James, fulfillment and the need for membership retention were similar. He said, “…if you look at a printed newsletter you have a package, a newsletter, different inserts for the package and a mailing list. It's really very similar [to subscription boxes.]” The big difference with newsletters and subscription boxes are the products that ride in the box versus the articles in a newsletter. What does it take to get the hundreds or thousands of products to ship out to your subscription box subscribers? James answered, “I found out very quickly that it wasn't that difficult. It's one of those that if you ask, somebody is going to say yes eventually. It's just a matter of putting your head to the grindstone and doing your research on the products, and figuring out what's a good fit for your audience.” But then there’s a big question of which products will improve membership retention. Do you deliver products in your box that customers will recognize as valuable from brands that add to the prestige of your box, or do you focus on delighting your customers by helping them discover products they’ve never experienced before? James answered, “The first year, we tried to align ourselves with as many big companies as possible. We wanted the Power Bars in the box, because everybody knew about Power Bar. We wanted Gu in the box, because everybody knew what an energy gel was in our market. We tried to align ourselves with companies like Mizuno and Nike, and Adidas, and put their advertising or inserts in our boxes, or give discounts to our subscribers. We wanted to play ourselves as ‘We're that brand with those connections.’ Today a lot of our product choices are based on things you don't see every day - The mom and pop shop in Idaho that's cooking gluten-free, vegan cookies that are full of protein - The place out of Washington called ZipFit that not everybody knows about that's like a powdered drink mix company. We don't want to give somebody the same thing, the same brand, the same flavors, two or three months in a row, because that doesn't lead to longevity of the customer. If you wrote the same article for your newsletter three months in a row, people would kind of get tired of it.” And while including the best products is crucial for success, membership retention always comes down to the power of the community you build. For Stridebox, they put their subscribers into their box. James explains, “we started doing a monthly card photo submission. Each month,

Recurring revenue is the single biggest growth factor and stability for businesses today. Rather than having a revenue that is dependent on individual transactions, subscription revenue grows as you add new subscribers to the continuing revenue from subscribers that were added last month, and the month before. Yet, many subscription businesses struggle and fail. Perry Marshall, one of the world's most expensive and sought-after business consultants, endorsed by FORBES, INC Magazine, and the most respected marketers in the world, recently interviewed Robert Skrob about the subscription economy. In addition to a wealth of information and advice for the subscription economy, Robert revealed what subscription businesses must do to grow recurring revenue including: how to launch a new subscription business to generate recurring revenue, how to generate new subscribers, and how to onboard new members to increase lifetime customer value. The Single Most Important Ingredient for New Subscription BusinessesThe best way to start a subscription business is with an existing customer base if you’re already in business, or with a well-defined group sharing a common interest or need. Robert states that “studies show it’s five to seven times cheaper to sell to an existing customer than to get a new customer.” So, for businesses that already have a well-defined audience and an established reputation with them, you have a leg up on getting a subscription business started. Once you’ve identified your target audience and their common need, passion or problem, it’s important that your subscription product or service is a solution or a transformation they’re looking for. “Rather than focus on the thing that you're selling, instead sell the emotional outcome of implementing the thing that you're delivering and how the customer is going to feel when they have it implemented. It all begins with that key. If you begin the relationship on ‘I got this stuff and I'll give it to you as part of this membership,’ then you'll never have the relationship. It's what I call a series of one-night stands instead of a relationship that you can build on where you're helping them accomplish these goals and dreams in their life.” Robert adds, “the leading cause of stagnant membership growth is a transactional membership model versus a transformational one.” How to Attract New Members and GrowOnce you’ve identified your target customer and the transformational product or service you have to offer them, it’s time to sell. “One of the key things is there has to be a sales system. So many subscription businesses work on creating the best website in the world but they never spend enough time attracting new customers to it. You need to have lead attraction and lead conversion systems in place that are creating a steady flow of new members without the owner or management having to perform,” says Robert. He adds, “Your paid advertising, partnerships with influencers, social media content, and other methods of outreach should all be focused on generating leads. What customers want is a transformation – to have a problem solved, to have fewer worries and less anxiety.” That’s your sales message in every sales method you use. Whether you have a sales team or not, it helps to have an automated process in place that attracts leads. Robert calls it the ‘Wheel of Attraction.’ You need a system that is designed to optimize leads and convert them to customers on an ongoing basis. Your membership growth requires an outreach to bring in the unconverted and welcome them into the group. Improve Retention and Subscription Growth by Implementing an Onboarding and Customer Success SystemA subscription business needs to continually add new members to grow, but the essential ingredient to the predictability and the growth of recurring revenue is member retention Your wo...

For 99 percent of the subscription economy, every subscriber receives the same thing. It would be unthinkable for a publisher to create a unique magazine for each subscriber, or for a SaaS company to create a unique software tool for each customer, or for an association to create a unique experience for each member. However, that’s exactly what the most forward-thinking subscription boxes such as PupJoy do every month. Continued It’s Okay to Be PersonalPupJoy is a subscription box service for dog owners. Its founder and CEO, Dustin McAdams, refers to these dog owners and dog parents. PupJoy takes a unique approach in the subscription economy by creating their business model around customization. The customization that PupJoy puts into each box is what sets them apart. Dustin says, “We're a very highly customized model so we tailor everything for the dog owner from dietary needs, toy types, delivery schedules, size of dog, and size of packaging. We focus on making sure the customer gets exactly what they want for the needs of their dogs on a schedule that fits for them.” Delighting the customer is the key to their success. Their customer service includes personalized, customized, continuity-driven, convenient services. “We curate an experience and we focus on really high-quality stuff - everything from presentation and packaging; but, at the end of the day, when we're talking about managing the business of growth, retention, making sure we don't have high churn, we believe customer service is very strategic,” states Dustin. A Customer-Led Marketing StrategyDelighted customers not only keep their memberships, but they become part of your marketing strategy. Dustin shares that “social media and interconnectivity allows for a lot of advantages when you do the right things. We’re blessed with really good customer reviews and a lot of social sharing where some folks actually market for us. I don't think there's any substitute for the value of that. So, we focus on nurturing that and we will continue to invest in ways where we can authentically help facilitate that.” He adds, “At the end of the day I think anybody that operates in our space deals with this challenge of short attention span, highly competitive fragmented media type of market so you have to stay on top of it. I think the brands that are doing things authentically, and have really good customers, have a leg up because there is no substitute for your customers marketing for you.” Maintaining Your Focus on the Customer’s Needs to Improve Member RetentionRetaining members is a constant challenge, and it requires a continuous focus on what the customer wants. “Once we have a customer at PupJoy, they're delighted by the flexibility of customization,” says Dustin. The customization that PupJoy offers is highly tailored. For instance, if a customer has received more dog treats than they need, they can switch it up and have an all-toys delivery, or another category. “Every box that goes out of our warehouse is, in essence, a customized box. We allow customers to choose from a number of categories, 28 in total right now. That means the picking and packing environment for every box is unique, and that means all the data and logistic operations in between that have to be very well coordinated. We offer 100% customer satisfaction on everything that goes out the door so we work very hard to make sure that we are spot on with our execution because, if not, we replace it for free.” Going Beyond the BoxPupJoy’s success goes beyond their box. “We also have an e-commerce store - a lot of replenishment items if somebody finds something in the box they love and they want more of, or larger ticket items that typically,