How to Implement a Subscription Model

Episode 899: How to Implement a Subscription Model, with Robbie Baxter

How to implement a subscription model? Robbie Baxter will guide you through the right process on how to implement a subscription model.

Robbie Kellman Baxter has been advising entrepreneurs on business strategy for 20 years, which includes teaching them how to implement a subscription model. Her clients have included solopreneurs and venture-backed startups as well as industry leaders such as ASICS, Netflix, Electronic Arts, and The Wall Street Journal. She has worked with nearly 100 organizations in over 20 industries on growth initiatives.

A sought-after writer and keynote speaker, Robbie has presented at top universities, associations and corporations, as well as to corporate boards and leadership teams around the world. Robbie has created and starred in 10 video courses in collaboration with LinkedIn Learning on business topics ranging from innovation to customer success and membership.

As the author of The Membership Economy: Find Your Superusers, Master the Forever Transaction & Build Recurring Revenue, a book that has been named a top 5 Marketing Book of the Year by Inc.com, Robbie coined the popular business term “Membership Economy”. Robbie’s expertise with companies in the emerging Membership Economy extends to include SaaS, media, consumer products and community organizations.

Prior to launching Peninsula Strategies, Robbie was a strategy consultant at Booz-Allen, a New York City Urban Fellow and a Silicon Valley product marketer. Robbie received her MBA from the Stanford Graduate School of Business and graduated with honors from Harvard College.

What you will learn from this episode about how to implement a subscription model:

• How Robbie found her way into business strategy and consulting work and has spent most of her career in this space
• Why Robbie believes that narrowing her focus and niching down has actually strengthened her brand and created new opportunities
• How Robbie worked as a consultant for Netflix very early in their business, and why their subscription model appealed to Robbie
• How to implement a subscription model with an appealing price, and why being customer-focused to justify subscription pricing is key
• What “subscription fatigue” is, why consumers are learning to game the subscription model system, and why having the right content to fit the model is crucial
• Why Robbie recommends you clarify what promise you need to make to your customers to make a subscription worthwhile
• How to implement a subscription model for certain businesses and how they can benefit from it
• Why being clear in knowing who your customer is and what their needs are is the best starting point for determining how you can best serve them
• Why not every customer is the right customer for you, and why bad customers distract you and can cause you to deviate from your model
• What important daily habit Robbie has developed that helps her maintain focus on her priorities

Additional resources:

• Website: https://robbiekellmanbaxter.com/
• LinkedIn: www.linkedin.com/in/robbiekellmanbaxter/
• Twitter: https://twitter.com/robbiebax
• Facebook: https://www.facebook.com/MembershipEconomy/
• The Membership Economy by Robbie Kellman Baxter: https://amzn.to/2Gk3s4H
• Learn more from Robbie on how to implement a subscription model and make it a successful one

Additional Resources:

• Sell With Authority by Drew McLellan and Stephen Woessner: https://amzn.to/39y7x13
• Predictive ROI Free Resource Library: https://predictiveroi.com/resources/
• Stephen Woessner’s LinkedIn: www.linkedin.com/in/stephenwoessner/
• Listen to a previous podcast from Robbie on how to implement a subscription model for additional revenue stream

 

 

How to Implement a Subscription Model: Full Episode Transcript

 

Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.

 

Good morning. I’m Stephen Woessner, CEO of Predictive ROI and your host for Onward Nation, where I interviewed today’s top business owners so we can learn their recipe for success, how they built and how they scaled their business. In fact, my team, we continually rebuilt our resources section on predictiveroi.com. So if it’s been a while since you visited, I certainly encourage you to come back so that you can download free, practical and tactical guides.

 

We are expanding this library, this resource center, on a continuous basis. So we’ve got guides for everything from search engine optimization, how to use LinkedIn to generate leads, and other success strategies that we have compiled from the brilliant insights shared by our very generous guests. So just go to predictiveroi.com/resources to get yours. Whatever your request, we will send it right to your inbox. 

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Robbie Baxter’s Introduction

 

Before we welcome today’s very special guest, her name is Robbie Baxter. Let me share some additional context why I was so very excited that Robbie said yes. To join me here with you Onward Nation. So Robbie’s a strategy consultant and she’s the founder of Peninsula Strategies, which is a management consulting firm. She works with clients like Netflix, The Wall Street Journal. She’s worked with nearly 100 organizations in over 20 different industries on their growth initiatives.

 

She is an expert in strategy. She’s also the author of the great book entitled The Membership Economy. Find your super users, master the forever transaction and build recurring revenue, which, by the way, was named a top five Marketing Book of the Year by Inc.com. Okay, so here’s why I mean all of that obviously awesome Onward Nation. But as Robbie and I were, you know, going back and forth, getting ready for this conversation and even in the pre-interview chat, there’s going to be so many golden nuggets around recurring revenue, subscription, membership revenue in this conversation.

 

Because as we all think of that sort of holy grail of monthly recurring revenue where we don’t have to reinvent the PNL every single month. This is the depth, the depth of Robbie’s expertise. I think she’s going to give you the do’s, the don’ts, the unintended consequences, the things that you should think about from a strategic perspective. They’re going to help you.

 

If you’ve ever considered having membership as part of your offering, then you absolutely want to be taking a ton of notes here from Robbie’s insights and expertise. So with that, without further ado, welcome back to Onward Nation, Robbie. 

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Robbie’s Path and Journey

 

Thank you so much. I’m glad to be here. Well, I am glad to have you here. And I’m so very excited because we had this incredible, incredible conversation in our pre-interview chat in the green room and then the back and forth before that.

 

So obviously I’ve kind of set the table here for Onward Nation. But before we dive in with the litany of questions that I want to fire your way, actually take us behind the curtain, Robbie, to tell us even more about your path and journey and then we’ll dive in with the questions. Sure. So I was born in New York.

 

Now I’m just kidding. Long time ago. So, you know, I have been a consultant for most of my adult career. I started at Booz Allen and Hamilton, doing strategy work for what they called marketing intensive companies, which are companies where the difference is made by marketing, not necessarily by the product itself. So think about, you know, sugar, water, salty snacks, pantyhose, you know, stuff like that.

 

And I loved it. But after business school, I went in, you know, people said go into industries. I live in Silicon Valley. I went into tech, product marketing. And what I learned there was that I’m a strategy person. So, put that little nugget away and, flash forward a few years later, I was on maternity leave from my product marketing job, and I was laid off.

 

And I said to myself, after some tears, I have to admit, some tears, some frustration, low points. I said, you know, I’m not going to put myself in a position again where somebody else controls my career and controls my income. And so I started consulting and I went back to the strategy work that I had loved so much.

 

And that’s what I’ve been doing for the last 18 years. That is awesome. 

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Deciding To Focus on Your Expertise

 

So, let’s take that piece and connect it to something that you shared with me in the green room, because I thought that it was really smart, something you did early on in your business when you said to me, Stephen, I was hearing that I needed to specialize, that I was looking for this opportunity to either, however you want to say it, specialize niche down or whatever, but to really be able to take this expertise of strategy and hone that in even further on some, you know, specialization.

 

So take us into that decision, because sometimes that’s really scary for a business owner thinking, well, if I specialize, that means that I’m going to have fewer opportunities where, conversely, it sounds like that’s been the opposite for you. That has led to many opportunities because you specialized. Yeah. It’s a funny thing, Stephen, but the more narrowly you focus, often the more powerful your brand, especially when you’re a solo practitioner like I am.

 

You know, for the most part. So, I knew I needed to have a niche, but I couldn’t figure out what it was. There were a lot of things that I had done and a lot of things that I thought I was good at, and places where I thought I could add value. So it was hard for me to figure out where to focus.

 

And, what happened for me is one of my early consulting clients was Netflix, and I fell in. This is right after they went public. They were not, they were still just on the coasts, actually on the east and West coast. They hadn’t even fully blanketed the United States yet with, with distribution. So that’s how long ago it was.

 

And I loved their business model. I loved subscription pricing because, you know, recurring revenue was a holy grail. It was giving them a great valuation. It was a differentiator. And I loved what it did in terms of where their focus went, which was all about the long term formal relationship with the customer. And I just thought it was an incredibly elegant and powerful model that nobody else was really doing.

 

And at the same time that I was falling in love with Netflix’s model, a lot of other people were becoming curious about it as well, and I started getting inquiries from people who said, I heard you do work with Netflix. We want to be the Netflix of our space. And whether that was we want to be the Netflix of news, we want to be the Netflix of software.

 

We want to be the Netflix of bisexuals. We want to be the Netflix of pain management. Everybody was sort of getting on the wagon of whatever it was that Netflix was doing, subscription, membership, engagement of the customer, all of that. So that’s what I’ve been doing since 2003. Wow. Okay. So here when you and I were talking about this before also and you, you started to break down kind of the quote unquote, Netflix model, I believe if I got this correct in my notes, you mentioned some things like the principles of membership and then subscription pricing, and to get those two big nuggets correct.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: The Principles of Membership Subscription Pricing

 

Yeah. Okay. So break both of those down and give us some context. I know on the surface for, for many of our, you know, listeners, business owners and Onward Nation, they’re already lockstep in with you and so forth. But give us some foundational context, in case those terms are new. So when you say principles of membership subscription pricing, break those down for us.

 

Yeah. So everybody wants subscription pricing. That’s just one of the most popular things, right now in businesses of all sizes. And for me, subscription is a pricing decision. It’s how you get paid for the value you provide. And in order to justify subscription pricing, you need to have a full member mindset in terms of how you run your business.

 

You need to have a membership oriented business model. So something I often say is subscriptions are a pricing decision and membership is a mindset. And it’s really about putting the customer at the center of everything you do and coming up with a promise to that customer that justifies subscription pricing. Because so often people get subscriptions and you see this all the time now, people are really suffering from subscription fatigue where they say, you know, I just want the content.

 

They don’t want to have to subscribe to it. I just want to own the thing, the software. I don’t want to have to subscribe to it. In other words, they feel like the companies, the organizations are forcing them to subscribe because it generates revenue for the company, not because the subscription pricing model makes sense for the customer.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: The Membership Mindset

 

Got it. Oh, okay. So this is going to be really fun to break these down. So when you say membership is a mindset, tell us more about why you think that, the membership mindset is one where the organization puts the customer at the center of what they do and treats that custom member like a member. So a lot of people have asked me, do we need our customers to call themselves members?

 

And the answer is no. But the organization needs to think of them like that. And when you think about what a member is and how is a member different from a customer or even a subscriber? A member belongs to you and you belong to them. So that means that they are going to have long time expectations from you, just like you have a long time expectation of getting recurring revenue from them.

 

So you have to design your products and your services. With that long term goal of the customer in mind, you have to be willing to evolve your products and services to meet your customer’s changing needs, and you have to be willing to have an open, back and forth conversation with them, just like you would expect in any other organization of which you are a member.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: The Definition of Subscription Fatigue

 

Love that. So let’s go to subscription fatigue. You know, aside from maybe having poor retention rates or maybe, subscribers dropping off after 60 to 90 days, based on your experience, what are some of the other telltale signs that you have seen that you’ve been able to look at some data points? Same. I think there might be subscription fatigue here.

 

Yeah. So I think of subscription fatigue as a bigger phenomenon, which is people saying, For God’s sake, do I have to subscribe to everything? Right. Like I just want to own my own car. I just want to own my, you know, I want to have my video collection. I don’t want to subscribe to anything new. I can’t even keep track of all my subscriptions.

 

So that’s the fatigue. It’s feeling like I’m being forced to learn all these passwords and have all these different subscriptions when I don’t really need them. And consumers are becoming more sophisticated about subscriptions and how they game the system. So what that leads to in organizations, things that I notice are, you know, I have clients who say, you know, we have a two week or a month long free trial, and we have customers or subscribers who are, you know, absorbing all of our content in that period and canceling before pay, or they’re canceling in the first month.

 

And that’s usually one of two things. One of them is they don’t really have an ongoing need. There is no forever promise. That was just the first model. They don’t have enough content to justify the subscription model, even if the problem is big. So, let me differentiate between the two. Okay. Wouldn’t have a subscription model for everything you know about how to tie a tie, right?

 

Either you know how to tie a tie or you don’t. And once you figure it out, you don’t need any more content. So it’s not a good subscription model. The other one is, how to be a successful entrepreneur. Like. Like what? You do it Onward Nation. Now, if you only had one podcast and one piece of content on your website, it would be really hard to justify a subscription.

 

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How to Implement a Subscription Model: Making A Promise to Your Subscribers

 

Even though any entrepreneur might say I have an unending need for continual learning. You can’t provide it because you don’t have enough content. This is not the case, by the way, for admiration, but just as an example. So a lot of organizations have models that don’t justify subscriptions, and that’s why people cancel. Okay. So then let’s flip that based on your experience and working in a number of different industries, it this real depth is there.

 

And maybe the answer is no. I’m just curious, is there from your perspective, an ideal business model or an ideal industry that really lends itself to subscription? Any business where you can say that your customer has a need for you to make them a promise that will last forever. So a problem or an opportunity that will never go away or that will last for a long time.

 

So there’s limitless potential. You can say, you know, I want to be an entrepreneur. I’m going to always need to use this, you know, software to help me get my job done. I need performance, productivity software. I need my nails to always look professional. Right. So maybe I have a subscription at my nail salon.

 

I need my closet to be full of clothes that work for me. I need to stay healthy, so I need a different kind of relationship with me, doctor. So, like, right now, I’m working in health care. I’m working in entertainment. I’m working in software. You know, any kind of issue is not so much. What kinds of businesses lend themselves to this?

 

It’s what you have to do in your business to justify it. So the first thing that I would advise anyone listening to do, if you want to have a subscription model and if you want to have your organization feel like a membership, is to say, what is that promise that I need to make to the people who join my organization?

 

I promise that as long as you stay a paying member, I will give you the latest and most valuable tips to cut through the clutter and help you thrive in business. That might be a forever promise. Netflix’s promise is, brought a selection of professionally created video content delivered in the most efficient way possible with cost certainty.

 

Right? And 15 years ago, that was three DVDs out at a time of other people’s content. Now it’s a streaming service delivered through multiple channels of original content. But it’s the same promise, and they’ve continued to reaffirm that promise by now. They’re in the production of that content in addition to other people’s content or their parties. Content. Now they’re one of the foremost providers or, excuse me, creators of original content.

 

Right, exactly. And so what’s really interesting to note is the promise has not changed, but how they deliver continues to evolve in terms of the content itself, in terms of the delivery mechanisms, in terms of the channels where you can enjoy the content. And that’s the way to think about your business, is to say, what’s the problem I’m solving that lasts forever?

 

Look at LinkedIn. Another example. I know you have a huge and highly engaged community on LinkedIn. LinkedIn is the professional community, right? It’s a site for professionals to build and manage their careers. And what’s interesting about LinkedIn, one of them is that the founders, before they founded LinkedIn, they founded a dating site, called Social Net.

 

And what they learned, they had a forever promise. They had a forever mindset. They wanted to really do everything they could for the customer. But if you’re really effective at helping a customer achieve that promise, which is defined by soulmate, you’re done in six months. So you’re back out finding new customers. Because once I found my true love, I don’t need to be part of a dating site anymore and you probably don’t want me there anyway.

 

So they said, next time we start a company, we’re going to have a longer runway. That is great at most people’s careers, you know, whatever 40, 50, 60 years, especially as we live longer. And our definition of careers, you know, changes. So they have lots of room to continue to provide additional resources for us to be as effective as possible in whatever profession we choose.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Example of a Company and a Subscription

 

So this might seem like kind of a, maybe obscure, maybe not obscure, maybe kind of a curveball follow up. I’m really curious here because, you know, with Netflix you’re sharing the example like, oh, yeah, okay. I’m tracking that with LinkedIn, totally tracking with that. That makes a lot of sense. But I know that you’ve worked in a number of different industries and many companies.

 

Is there an example that on the surface, most people wouldn’t have thought of as like a subscription model or membership model? And then it’s like, oh, wait a minute, let’s think about that from this strategic point of view. And there is some opportunity here. So is there an example you might be able to share with us that on the surface is like really and then peeling back the curtain, it’s like holy bananas.

 

That’s amazing. Okay. Sure. There’s lots of them. And if you want, we can play the game with you. You pick a company and we’ll talk about how we make it into a membership. And let me I’ll give you a couple, okay? Okay. Last year I spoke at the International Carwash Association. Okay. So, what do we want with carwash?

 

We don’t want to go to the carwash. We want to have our cars be clean all the time. Right? If I could push a button or pay a fee and just have my car be clean, that’s what I would really like. So a couple of things that different companies have done. One of them is that a lot of car washes now have a subscription or a membership where members get unlimited car washes for the price, usually of somewhere between 2 and 3 car washes.

 

The full list price of, let’s say $0.03 a car wash is ten bucks. The membership is 25. Some companies have gone one step further. So you know where I live in Silicon Valley, there are services that come in the night and wash your car in your driveway. What? And refill your tank. There’s a company called filled which actually fills your tank.

 

And that’s because the forever promise that part washes are really going towards. I don’t have a wish of getting my car cleaned. That is not the promise that is meaningful to me. It’s having a clean car. Smart. So a lot of organizations, what they do is they start in their business with that forever. Promise. People want their cars to be clean all the time.

 

You say, what’s the most effective way I can solve that problem for them right now? And then once they’ve done that, they fall in love with their product. And so then they become a car wash company. They do. They get really good at real estate. They get really good at managing a certain kind of team, certain kind of production, and they start evolving around the customer.

 

So like, I mean, I’m picking on the car wash industry a little bit now, but when I went to the carwash show, a lot of the conversation was about devices that make the car wash 9.5 minutes long instead of ten minutes. And I was saying, hey, I don’t even want to go to the car wash. I don’t really care if it’s 9.5 minutes or ten minutes.

 

I don’t really care if it’s 1% cleaner than it used to be. With the car wash service, it’s either dirty or clean in my mind. And I would really like for you to come to my house and I told them that and they said, but we own all these car wash facilities, so we’re never going to do that, right?

 

They love their product more than they love the customer. Right. And that’s and that’s that flies in the face of or it certainly doesn’t support the promise that you’re looking for. Exactly, exactly. And you know, another one I mean, we’re seeing all of you know, I spoke at the Association of Equipment Manufacturers. 

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: The Program is Meant to Make the Process Easier

 

So this is like thresh. I mean, I didn’t know what any of these products were.

 

Threshers and crushers and backhoes and cranes. And all of those companies are looking for ways to build software into the product and provide services around it. Because again, you don’t buy a crane, you know, you want either the agriculture or, you know, your farming process to be better or you want your construction process to be easier.

 

It’s not just about the product. And so giving information around it, giving people access to the products without having to buy them, right. If you buy a crane first, it’s a seven figure purchase. Maybe you’re better off subscribing to access that crane. Maybe, you know, and that way you always have the most current crane, rather than having to keep one for, you know, 25 or 50 years because it was so expensive.

 

And also, you want the insights and the expertise and the benchmarking to help you use that very expensive piece of machinery in the most efficient way possible. Well, and I’m so glad that you brought up that example, because when you said, well, will you play this game and you think of an industry? I was thinking about capital equipment, right?

 

Like what you mentioned with the crane or other things. And so if let me give a piece of that example back to you to make sure that I’m tracking with you. So then, in the crane example, so the manufacturer that maybe had, you know, produce cranes for 30 years, for example, that maybe they’re still selling cranes, you know, that somebody who wants to purchase a crane, but maybe there’s a large commercial contractor that no longer wants to own the fleet for whatever reason they do.

 

They just don’t want to own the cranes. To your point, they want the best crane, the latest crane, and so forth. So I think if I’m here, you’re correctly it’s so the manufacturer still sells cranes but then also has either a lease program, rent program, something that is then bolted along with services, whether that software, whether that’s data collection, whether it’s whatever that customer was subscribed to, they get all of that data flow and then a crane whenever they need it.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: How To Structure Your Subscription Model

 

Exactly. So there’s a bunch of different ways. So, you know, when you’re thinking about it, I spent a lot of time with entrepreneurs trying to figure out what exactly will be the features of our membership model. Okay. So if you were in the heavy equipment business capital equipment business, you could start by saying, what about people who want to access a range of machines instead of owning them?

 

What would that look like, a sort of a Netflix of equipment, right? I’m going to check this one out. I’m going to check that one out. I’m paying to have access. Second opportunity would be whether I own it or not. I want you to send me benchmarking data that will help me better use, you know, sort of advise me on how to use this piece of equipment in the most efficient way possible.

 

So I don’t yet, you know, the ground is too hard. Don’t use it today, you know, and again, I’m getting very quickly out of my depth because I don’t know a lot about construction, but I know that, you know, the temperature makes a big impact level of humidity in the air, you know, kind of forecast, like getting the right piece of equipment to the right place on a very large tract of land is often a big issue.

 

So, you know, if the picker is, you know, the really expensive picker is all the way over on the south end of the property. Let’s say this is agriculture now, but it really the plants are ripe, the trees are ripe on the northeast end of the property. You know, how could I predict that based on temperature and weather patterns, so that they could have given me the advice that I probably want to start moving my equipment over to that corner of the field a few days early, and also make sure that the one person on my team who knows how to operate that piece of equipment is in that same area that day.

 

And that he has a shift that day. So it’s really looking at it from the perspective of the farmer instead of, you know, saying, hey, you bought this piece of machinery. Good luck to you. Use it however you want. It’s saying, not only are we selling you the piece of equipment or leasing you were assigning, you were lending you.

 

But we’re also going to analyze how you’re using it and use our expertise on how others use it. Bring in outside information, and advise you on how to get the most out of the investment you’ve already made, or with you for the long term. This is so great, so great. Okay, so then from your perspective, let’s say that there are some Onward Nation business owners thinking, okay, I can, I’m hearing what Rob is saying.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Skill Set That Business Owners Need to Master

 

I’m thinking that there’s maybe a couple of opportunities and so forth. Let’s think about it from a skill set perspective: is there a particular skill set? Is there a skill that you think business owners need to master in order to really be good at this, in order to to really think about this from the right perspective?

 

Yeah. Well, so they are transforming your model like let’s say you’re you’re saying, you know, I’m a business services professional and I’m trying to move to a member model. There’s, there’s a whole bunch of things that usually work, whether you’re, you know, McKinsey or Deloitte or you’re, you know, just an individual hanging out your shingle.

 

You know, one of them is you really need to know who your customers are. I have actual pictures, CEOs of the kinds of companies I’ve worked with and also CEOs that I’d like to work with on my screen, my screensaver. So I’m constantly looking at those people. I’m really, really clear about who they are. And that helps me kind of get into their mindset of like what they’re doing, how they’re going to, you know, perceive me what they want, what their problems are, rather than being really focused on, you know, the deliverables that you have.

 

That’s one thing is to really know who your customers are, and have an image of who your best customers are and who your worst customers are. That’s a great starting point. A super tactical exercise that you can do right now is to make a line, you know, draw a line down the middle of a piece of paper.

 

And on one side, describe your very favorite customer who uses your products and services really, really well and makes referrals and is easy to work with. And you know you’re giving them huge value and it’s a pleasure. And on the other side, the opposite, the one that doesn’t pay you enough is difficult to work with, never quite seems to be a good fit for what you have.

 

Always seems to drag you in the wrong direction and get really clear on the attributes of a smart and a an and not best customer, and then go back and look at everything you do and say, is it optimized for the best customer? And then the next step is, what else can I do for that best customer? And if you keep asking that question, it’s going to guide you toward the right kinds of products and services.

 

Evolve in asking that question and continuing to peel the onion. Not me. My guess is not only is it going to, you know, shine a light on the ideal suite of products and services, but it’s probably also going to help illuminate what the forever promise should be too, right? Absolutely, absolutely. So here’s a couple of funny examples. Car wash.

 

You know, I don’t know if the car washed my brain this morning. One of the problems that the car wash people had was that they had a couple of Uber drivers who loved their subscription. Okay. Right. Because they would come and wash their car before every single shift. In other words, part of their work routine was to stop by the car wash.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Doing Analysis for a Company

 

Okay, so either that’s your worst customer or your best customer, right? And so you need to evolve. So you could say, hey, we’re you know, there is a community of Uber drivers who are under a lot of pressure to have their cars be spick and span. What else can we do? What would be the Uber package? Right? What would be the Uber tier of membership or the sharing service driver tier of membership?

 

Another thing they could do is put some walls in place. If they say no, they’re clogging up the lines. And my ideal customer is Robbie, who likes her car to be clean. She comes usually 3 or 4 times a month and she doesn’t want to be bothered. She wants to get through the line really fast. She doesn’t care how much she has to pay.

 

Let’s optimize for Robbie and let’s get those Uber drivers out of her way, right? Right. So that’s one example. Another one on the software side, I worked with a company that sold stuff as a service to large organizations. So this is a small software company selling for large organizations. Okay. Their salespeople were selling to about 15 different industries.

 

We did the best worst case, you know, best prospect, worst prospect analysis. And what we found was that very consistently, they would lose deals with public utilities. But they would get to the final stage. So, the notes in the sales CRM system would say something like this. Met with public utility. They love us scheduling meetings to do demos, you know.

 

And then it would say the demo went great scheduling. You know, the pilot program went great. Meeting with leadership. Leadership meetings went great. We are in the final two. This is our deal. Oh my God, we lost. I can’t believe it. They said in the end it was XYZ reason. Too much money. You know, had a relationship with the other guy, the CEO, you know, whatever for different reasons.

 

But the same process. Six month cycle. Last week they’d lose, when you look at all the data of all the wins and all the losses of all the good deals and all the bad deals, suddenly you see these nuggets and you say, oh my God. Okay, everybody, no more public utility prospects, period. I know it feels really good.

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Some Great Customers Are Not Meant for You

 

You think that because it looks like they like you and then they don’t buy. And so that’s just I think people don’t do that. And that’s an analysis that you do in a going concern where your business is already successful and you just call those bad prospects and you call the bad customers. Yes, because they’re absolutely our customers that we should not be serving Onward Nation.

 

Right, Robbie? Absolutely. Some of them are great customers for somebody, but not for you. So if I went into McDonald’s, in a game with my husband in a tuxedo, and I said, give us a bottle of your finest champagne or celebrate our anniversary right now. Not a good fit, but okay, they’re not going to be, you know, you’re not going to be able to serve me.

 

They’re not going to say, oh, my God, she’s a great customer. She’s willing to spend any amount of money on champagne. We should run to the liquor store and buy something great. They’re gonna say, lady, you’re in the wrong place. You’re not going to feel bad about it. They’re not. You know, we’re going to say we do have food.

 

So you don’t want to feel. So in many cases, a customer that’s bad for you is not a bad person or a bad customer. You just can’t serve them very well without really deviating from your model in a way that is going to distract you and actually probably hurt your good customers. Yeah, and disappoint the customer that you’re working really hard to impress.

 

And it’s going to be expensive. You know, maybe there’s safety issues. You’ve got people running around town looking for bottles of champagne for robbing or a husband. I mean, there’s just a litany of other things when we go out of scope like that or way out of our strengths. Right? Yeah. Yeah, absolutely. And no, like you said, nobody’s happy.

 

Like, I’m not going to be happy spending my anniversary at McDonald’s. I’d be much happier if they said, you know, go down the street, there’s a restaurant, you know, a little Italian place with, you know, romantic music and fine wine. All the people waiting in line behind me who want to get Happy Meals are going to be really annoyed that I’m, you know, clogging all the gears.

 

So, you know, it’s really important that you know who your best customer is, and then you optimize around them, and it makes things so much easier for you as a business owner, and it makes your customers so much happier because they can self-identify. And you can really serve. This has been so great. This has just been absolutely excellent.

 

And when, when you and I had our prep for you to reach out and all the prep for this conversation, I was just so very excited for you to share your insights and wisdom, you know? Holy bananas, Robbie, you totally did that in spades. I am grateful for that. But before we go, before we close out and say goodbye, any final advice?

 

Maybe we missed something. Anything else you’d like to share then? And then please tell us the best way to connect with you. 

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: Final Advice from Robbie

 

Yeah, well, I think we covered a lot of things. But, you had asked for, you know, what’s one thing that I do that helps me stay focused and tackle my most vital priorities? Yes. And for me, at the end of every day, I write down my three messages for the next day.

 

And, I start working on the worst one, so I’ll spend five minutes. Like, if, you know, my challenge for today is, you know, write a chapter of my next book, I’ll start writing notes for it. Like I’ll open up the file and start my notes and say, I’m only going to work on it for five minutes, and I’m going to shut it down so that I have all night to kind of stew on it.

 

And then when I wake up in the morning, it doesn’t feel so daunting and I know exactly what I need to do. That is awesome. Really awesome. 

 

Learn more about Robbie’s methods on how to implement a subscription model here

 

How to Implement a Subscription Model: How to Connect with Robbie

 

What’s the best way for Onward Nation business owners to connect with you? Robbie? Probably. You know, I’m easy to find. I’m on LinkedIn. I’m on Twitter is @RobbieBax, I’m on Facebook as Membership Economy.

 

Any of those is a great way, you know, join my list and I’ll, you know, share all the research I’ve done and all the very detailed guides I have to how to price for subscription, how to onboard customers and all that people I did to okay Onward Nation. No matter how many notes you took or how often you go back and re-listen to Robbie’s words of wisdom, which I sure hope that you do.

 

The key is you have to take what she so generously shared with you here today. Take it and apply it into your business right away and accelerate your results. And Robbie, we all have the same 86,400 seconds in a day. And again, I am grateful that you said yes. Thank you for taking the time out of your compress to come on to the show to be our mentor and guide to help us move our businesses onward to that next level.

 

Thank you so much, Robbie. Oh, it’s been a real pleasure. Yeah. You ask great questions and you’re so smart. So it’s really fun to talk to you. 

 

This episode is complete. So head over to OnwardNation.com for show notes and more food to fuel your ambition. Continue to find your recipe for success here at Onward Nation.

 

Learn more about Robbie’s methods on how to implement a subscription model here