The only sustainable business model for dispensing information is membership. Membership transcends media platforms because it’s built on a relationship rather than on a delivery mechanism. But there’s a lot more to membership than gathering your employees together to announce you’ll now refer to your customers as “members.”

There are three basic ways media companies support themselves:

Advertising

We are living through the demise of the local newspaper. While readers still pay a small “subscription” fee, the bulk of the news’ revenue is generated through advertisers. Media built upon a foundation of advertising is vulnerable to collapse. It only takes a new, more popular media to illustrate the fatal flaw of this formula.

This is the same reason Facebook is doomed to the same fate as the local newspaper or national magazine. Facebook’s business model is based upon advertising. Sure, Facebook tries to be better at it by giving you more demographic data from which to target your advertising to their users. However, they depend on user attention. Radio, newspapers, broadcast television … they have all peaked and then passed into the status of marginal players, with their focus on advertising. Sure, they will always exist, but each have become niche players, offering advertisers access to a niche market. It will soon become clear that Facebook is already a niche player as well.

Subscription

I can’t think of a harder business than a subscription model. Whether it’s a publication or software as a service, subscriptions are renewed as long as there is no appropriate substitute for what you offer. The second your customer can solve his or her problem without the subscription, he cancels.

Today, Adobe is the poster child for subscription revenue success. Before 2011, you could buy Adobe’s Photoshop program packaged in a shrink-wrapped box. Today, you have to buy a monthly subscription to get access to Adobe’s software.

Adobe’s transition to subscriptions increased company revenue 174 percent in the last four years, with profits up 57 percent last year, and an expected increase of another 37 percent this year. The subscription model is definitely better than selling one-off products and hoping your customer up-grades in a few years; however, the subscription model has an important flaw.

All of this is short-term. That revenue will attract competitors to enter the market. And, because the subscriptions are monthly, there will be little cost to the consumer to make the switch. Subscription businesses live from renewal to renewal, based on the availability of appropriate substitutes. The moment there is a substitute, the customer makes a change.

Membership

While advertising-supported media companies have come and gone, membership companies have continued to thrive. Some are non-profit associations, and the fact that they have thrived without the talent of their for-profit competitors is telling.

Within advertising-supported media, the end user is trading his time and attention in exchange for entertainment and/or information. But once another more entertaining media comes along, the user is gone. And with him, the advertising revenue.

With the subscription model, the user is trading money in exchange for insight, shortcuts, and motivation. But if the customer no longer needs or wants these things, the subscription is canceled with-out a thought.

With membership, the member forms a bond — a relationship with the organization. It’s often a bond that transcends the trading of money for stuff.

While the fulfillment of advertising-supported and subscription-based media companies may look similar to that of membership organizations, there are several key differences. Within advertising-supported and subscription media, the focus is on entertainment and return on investment. It’s ether got to be funny, or it’s got to teach them something useful in their life or business.

Now look at membership media. In addition to the entertainment and return on investment, this media also includes four other important components.

1. Connection to a higher purpose. It connects the member to a purpose that’s bigger than just them.
2. Connection to others. There are opportunities to interact with other members of the tribe and to connect emotionally.
3. Recognition from peers. Members receive feedback from other members within the com-munity.
4. Opportunity to participate. Members can “give back” to the community by referring friends, contributing content, or serving other members.

Now think of every group you’ve belonged to — every church, association, or civic organization. I’m certain they were implementing the four items above with some degree of efficiency.

This is why membership organizations survive even though the media changes. If it’s somehow proven that all members prefer consuming information on their iPad versus a print newsletter, the membership organization can pivot. The membership is based on a relationship, not on the ex-change of a particular type of media for money.

Within my definition of Membership, I include companies that create a “Vibrant Tribal” relationship with their customers, such as Apple or Harley-Davidson. Apple customers won’t buy a Microsoft Surface Tablet, even if it’s better than a MacBook. A Harley-Davidson owner will never know that BMW came out with a new model of motorcycle because he’d never care to look. This is the only stability in a business — the fierce loyalty of the member relationship.

I’ve proven many times that any media organization can turn consumers into a vibrant tribe. All it takes is giving your customers a higher purpose, a chance to connect with peers, recognition, and opportunities to contribute. While this may all sound foreign to you at the moment, doesn’t it sound a lot easier than everything you have been doing to improve consumption, renewals, and program growth?

The biggest problem with membership programs is that members quit. I come alongside you and your team to help stop your members from quitting. You start the process by scheduling an assessment. Next you’ll receive a comprehensive membership program growth plan. Then third, if it would be helpful to you for me to support you and your team implement your plan, I’m happy to set-up to guide you through your membership program transformation. Get started by scheduling an assessment today.

About Robert Skrob

The problem with subscription membership programs is that members quit, I fix that problem. For more than 20-years I have specialized in direct response marketing for member recruitment, retention and ascension in diverse subscription members environments including non-profit associations, for-profit publishers/coaching, subscriptions and SAAS companies. For an evaluation of your current churn rate and how I can improve it, contact me here. I discover there are often two or three quick wins you can implement within a week to lower churn immediately, let’s talk about your quick wins.