050: Helping Companies Thrive In The Membership Economy – with Robbie Kellman Baxter

Robbie Kellman Baxter, author and founder of Peninsula Strategies joins Ward to chat about how she has spent the last 15 years helping businesses optimize their membership model within the membership economy.

✍️ Show Notes

πŸ“„ Show Transcript

This transcript is computer generated, please excuse any typos πŸ™‚

Ward Sandler 0:06
Hey, Robbie, welcome to Member Maker.

Robbie Baxter 0:37
Thanks so much for having me Ward.

Ward Sandler 0:39
Yeah, sure thing. So what is your business and who you helping?

Robbie Baxter 0:43
My business is subscription and membership models and I help everybody from solopreneurs on up to some of the biggest companies in the world that you know, Microsoft Netflix, NBA for basketball fans. That’s my business.

Ward Sandler 0:56
And so what are you actually doing for those folks?

Robbie Baxter 0:58
I have been working with businesses that have a membership model, or what I would call membership economy business for the last 15 years, helping them to optimize their model, which is sort of includes a bunch of different things. I see it as a kind of bigger framework. So sometimes I’m helping organizations just get started. And so the challenges of launching a membership model, sometimes I’m helping them scale. So hey, my membership models working, but I’m doing it all manually. How do I scale that? And how do I create a culture once I start to hire people that will support a member mindset. And then finally, for organizations that have had membership models for a long time, so think about professional associations, gyms and fitness centers, or, you know, course news media, how do they continue to evolve the packaging of their value to stay relevant in a very, you know, disruptive environment? I also have written two books about how to build and sustain membership models, the membership economy and the forever transaction.

Ward Sandler 2:08
Yeah, for longtime listeners of this podcast, they will definitely have heard of the membership economy. It’s one of the most recommended resources at the end of the podcast. So we’re really excited to have you on.

Robb
ie Baxter
 2:17 Oh, great.

Ward Sandler 2:18
Okay, so within that consulting, it sounds like you’re doing a lot. There’s a lot of different things you can do there a lot different businesses you can help when it comes to community. That’s something I’m curious about, because we’ve heard that as a concept a lot of memberships are offering and it’s one of the most popular elements in terms of what makes a membership successful. We found and that I’ve heard from other folks is having a strong community, especially in person. Is there any tips you have for folks out there that are trying to launch some kind of a community membership?

Robbie Baxter 2:47
Yeah, so I think about community as being one element, one way of packaging value for your members. So if you take a step back and you say, Okay, I am trying to help my members, either solve a problem forever or achieve a goal forever some kind of a long term priority for the people that you’re serving. There’s a million different ways that you can package the value. You can. You can write a book, you can have blog posts, you can have podcasts, you can have conferences, you can do masterminds, you can do them in person, you can do them digitally. You can have them help each other, you can help them just by bringing in experts that they can listen to or talk to or get advice from. So in that context, community is one way of creating more value for your members. And it’s really powerful and really popular with organizations because the value of it comes from the members operating under the umbrella of the membership brand. So if you can build a community that is really active where people are helping each other and actually creating content and value, that is something that is both very hard for a competitor to recreate, very sticky. So you know, members don’t want to leave a community once they’ve become known and connected and feel a sense of belonging there. And then it’s also an asset that doesn’t cost, the brand, the membership organization, anything to create, it’s created by the members themselves. The downside is, you don’t just and I know you know this word, you don’t just turn on the platform and say, okay, members come and be community, you actually have to invest in building it. It’s like building a garden. You know, the first few months are much harder and then once the tree is starting to grow, it takes a lot less effort. And that early nurturing stage one of the most powerful things to help it grow is real life connections. Moving those real life connections into a digital space can be a really effective way of launching a membership and having periodic in person events. Alongside digital is a way to deepen and extend the value of that community under the membership umbrella.

Ward Sandler 5:09
Yeah, I think there’s a lot of wisdom in everything you just said there. And I like the phrase, you’re trying to solve a problem forever when it comes to like a membership site. That’s a really interesting way to phrase it. I like that.

Robbie Baxter 5:20
Yeah, you know, funny one. One time I had someone asked me a question. She said, You know, I have this membership model around potty train. I don’t know if you have children wash it around potty training, and members don’t seem to stay very long. And should I force them into an annual membership? In other words, the monthly people were joining, they were staying for about two months, and then they were leaving. And, you know, the issue, of course, is that potty training is not a forever transaction. It’s not like oh, for the rest of my life, I need somebody to help me with potty training. It’s a very finite duration. And her problem with her membership was that she wasn’t sure providing ongoing value that would organically result in somebody staying a member for longer than, you know, two, three months tops.

Ward Sandler 6:09
Yeah, I mean, that kind of model would strike me as either you would want to do annual or maybe just a lifetime. It’s just like one time charge you get access for life that might Yeah, that might make more sense.

Robbie Baxter 6:18
Right, exactly. Lifetime as long you know. And the other thing is, what she could have done is she could have said instead of being a potty training business, it could be a sticky problems of parenting, membership, right? Because parenting is a lifetime. I mean, that is a lifetime proposition. That is a forever transaction right there. And she could have used the potty training as a headline benefit as a trigger to get people to join and then could have moved them through the other kind of major challenges that parents face and that she could have really justified you know, monthly membership forever. For for 18 years. For You know, for some last longer than 18 years of parenting, right?

Ward Sandler 7:04
So how did you actually get into the membership economy business niche?

Robbie Baxter 7:08
Well, I have three kids and my middle daughter, when I was home on maternity leave with her, she’s she’s 19. Now, I got laid off from my job as on maternity leave, and I decided that I was going to be responsible, and in control of my own income. Probably like many of the listeners, I wanted to be independent and not have a boss anymore. And so I started consulting. And I realized pretty quickly that I needed to have an area of expertise. And it was taking me a while I didn’t know what that would be. But I kind of had my eyes open and was always thinking is this what it’s going to be is this because it has to be something that’s narrow enough that you can really go deep and own something, but it also has to be broad enough that it’s interesting in MIDI and is going to have legs for the duration. And my fifth client, as an independent consultant was Netflix. And that was just luck. I was asked to help with some acquisition partnerships that they were working on. And I ended up doing a whole bunch of projects for them over a two to three year period. And I fell in love with their model. And at the same time, as I was falling in love with their model, other people were and I started getting calls from, you know, classmates and friends of friends and former colleagues saying, Hey, we want to be the Netflix of our industry. Can you help us do that here? And that’s really how I got and got interested in it. You know, it was like, I was falling in love with the business model. Everybody else was falling in love with the business model. And I was like, I could be really happy just digging in to this relatively narrow space.

Ward Sandler 8:44
Yeah, I think there’s a lot of depth to the world of memberships. I think on the surface, people think it’s kind of simple, like, Oh, you just charge a recurring fee and you get access to something but it’s just so much deeper than that. And for sure, it’s a lifetime’s worth of work to really fully explore all the ins and outs of it, but for a while what you were doing with a consulting you started there? It sounds like how long do you do consulting before you wrote the membership economy?

Robbie Baxter 9:07
So I consulted, you know, at a big firm before before I hung up my own shingle, but from the time that you know, Annabel was born, and I started consulting, it was 10 years, I have notes. Actually, I started consulting 2001, I started taking notes for my books. And I should probably write a book about this. There’s a lot here in 2004. And my book came out in 2015. So over 10 years that I was writing and thinking about this, in almost 15 years of working primarily with businesses that had subscription pricing and membership models. So long time, it took me a really long time to be confident that I had something valuable to say,

Ward Sandler 9:49
and working that long in that industry. And with all those companies. That sounds like a good way to build up that initial audience when you were actually launching the book.

Robbie Baxter 9:56
Yeah, yeah. So some of your listeners probably have have written books. You know, if you want to get your book published by a third party publisher, as opposed to going the self publishing route, they’re certainly going to look at the content of your book and kind of what your what your book outline is. But just as important is your platform. And because I had worked with so many membership and subscription businesses, and because I had been writing articles and speaking on that topic for a pretty long time at business schools and professional associations and inside companies, that was actually I think, what made them want to do the book, because I already had a platform I already had followers.

Ward Sandler 10:41
Right? And you had you also add credibility by working with all these name brands like Netflix, it’s like okay, obviously, this person knows what they’re talking about Netflix isn’t just hire random people off the streets.

Robbie Baxter 10:51
Yeah, yeah, exactly. And I’d at that point, I’d worked with Netflix, you know, this is way back now. But when I wrote the first book, I had worked with Netflix. And Yahoo and Oracle and Survey Monkey and Intuit, they were all kind of Silicon Valley tech companies. So you know, much narrower than what I do now. But most of those were, you know, household brand names that were real leaders in working in subscription and membership, but but very different from, you know, the kind of many memberships that have popped up both with solopreneurs. And then, you know, all the different kinds of interesting ways that companies have explored premium membership, community, freemium, all of those things, even since the first book was published,

Ward Sandler 11:39
right. So why don’t we talk about pricing a little bit so you have the consulting side of your business, and then you have the publishing the book side of it. Obviously, books are a little more straightforward. I would think in terms of pricing, maybe not as much nuance to it, maybe I’m wrong. But in terms of the consulting, could you kind of walk through how you think through your pricing For that,

Robbie Baxter 12:00
yeah. So so first of all with the book, I have no control over the price that is set by the publisher and by the retailer. So, you know, people sometimes will ask me, Hey, can you send me a free book? And I’m, you know, yeah, I’ll buy you a book. And I’ll mail it to you. And I’m glad to do it. But it’s not like I have control over the price. It’s very different if you’re self publisher, in terms of the other side, the consulting and the speaking, you know, what I try to do is price for value and work in a retainer kind of advisory relationship so that I can you know, I always think of it as I’m sitting, you’re going on a journey of membership, and all ride shotgun with you, and I’ll help you pack your trunk and I’ve been on this trip a million times. So I can tell you the shortcuts and I can help you change your tires. But if nobody’s sitting in the driver’s seat, we’re not going to get very far. So you’re really in the driver’s seat. And that’s been the model that I’ve used for work. So that allows me to work with multiple companies at one time. And really be helpful sharing my expertise, and then counting on them to do kind of the arms and legs operations of running the business.

Ward Sandler 13:09
Right? And what’s the range if you’re comfortable sharing in terms of your pricing, because it’s starting at a certain amount, and then it goes up to a certain amount? Is it a retainer? Is it hourly? How do you actually think about that?

Robbie Baxter 13:20
Well, I call it a retainer. But it’s basically a fixed price for the month. And it’s usually, you know, three month increments for small businesses. I do $25,000 for six months for a small business owner for coaching and mentoring and advisory work, and that’s for unlimited access to me. So you can call me every single day if you want, you can send me everything you’re working on. And I’ll do my very best to help you make progress in all areas. And then it’s much more for you know, venture backed and public companies, family run businesses, things like that. But my you know, I try to keep the pricing lower for the solopreneurs and small business owners just because I want to be able to help as many people as I can. And that’s also fun. Frankly, the reason I wrote the book because you don’t even have to pay anything, you can go to the library and just get it. And I’m fine with I’m really happy, go get the book, and my email address is on the last page, and you can email me your questions, and I’ll try my best to help you. Yeah,

Ward Sandler 14:12
no, that’s great. So when you were first starting the consulting part of the business, well, first, you’re working for somebody else. But let’s start from when you were working from yours for yourself, when you were first beginning there. What were some of the roadblocks that you kind of ran into like, what what didn’t really work was anything you tried that just didn’t really work out? Well?

Robbie Baxter 14:30
Oh, so many things. First of all, I was very, very, you know, entrepreneurs have different risk thresholds. And my risk threshold is very, very low. Like I am not willing to take a lot of risk, for better for worse. So if I had been bolder earlier on and maybe taken out loans and hired staff, maybe I’d be much, much further along. On the other hand, maybe I’d be out of business and my family would be you know, living on the streets. So, you know, I wonder if I wish I’d maybe Been a little more confident and pushed a little harder and faster early on. That’s something that I that I kind of look back on and wish maybe I’d done a little bit differently. It took me a few years to find my niche. You know, I don’t know how I could have been better at that. But that was hard. And then there was some things I’m an extrovert so it’s lonely running your own business. And it took me a while to kind of figure out the right rhythm to balance you know, work calls, social calls, seeing friends. Finding a support group, like finding a mastermind group and finding a community of other professionals that were doing similar things was really, really important and I don’t think that happened for the first two years. So those were those were some of the things early on. It was also hard for me to figure out pricing for consulting services. There’s lots of different ways to price for value. You know, you mentioned it, you can price hourly you can price per project, you can price as a retainer, you can price as a, you know, fixed fee for unlimited access and figuring all of that out, you know, it took me a while.

Ward Sandler 16:02
Yeah. So how did you get to the three month increment model? Why? Why did you settle on that?

Robbie Baxter 16:06
What I realized was, I can provide value in one day might call me will spend an hour, it’ll be super valuable. So I do that too. I have like a jumpstart, you know, just call me one hour, pick my brain, we can do that. And that really helped with all the people that said, Can I buy you a cup of coffee and pick your brain? I’m like, Well, not really cup of coffee, like, this is the truth. For my friends, for my friends of friends. If you’re asking me a favor, I am glad to talk to your people and help them as much as I can for an hour and I’m not going to charge them anything and I’ll pay for my own coffee. And if it’s somebody that I don’t have a relationship with, then you know, I ask them to pay for it. And that gets rid of the people that aren’t serious. And the people that are serious show up really, really well prepared, and we do a lot. But then I find that when you kind of get beyond an hour, maybe a half day, I start to have to really dig in and become an expert on your business. So I have a very high learning curve, there’s a period of time where I’m working very hard to just understand your unique business. And so I found that I need to kind of have a three month window to really get up to speed and justify the investment on my side. And then what ends up happening with most clients is they extend so I would say the average range is like six to 18 months of working with a larger organization.

Ward Sandler 17:22
So the one hour call will usually lead to some kind of upsell or further engagement.

Robbie Baxter 17:28
Sometimes it does, sometimes it doesn’t I really my goal in that our call is to provide as much value as I can. So I’ll usually if let’s say, you said what you signed up for it, I would say great, why don’t we meet in a week, and in the meantime, send me everything you want me to look at, and I’ll try to just browse through it. So I’m at least versed in what you’re doing, and send me what your top questions are, so I can process a little bit and then when we get on the phone, it’s just an hour of intense, you know, going through all the questions that are on your mind. If you don’t ever again, kind of like the library book, if, if that’s all you need, I’m thrilled. And if you want to come back and do more, that’s that’s great, too. But I’m just trying to figure out different price points in different ways to help different kinds of people.

Ward Sandler 18:13
And what do you charge for the one hour calls? Or does it vary?

Robbie Baxter 18:16
Now it’s $500. It’s on my website, you just sign up, pick an hour, and off we go. And it’s for five days. So one hour plus five days of perhaps it’s usually like four working days for me to get up to speed. And then, you know, a week after that, you can send me emails and stuff, if you have a question that you realize after you got off the phone, oh, I never really asked that. Or Oh, I don’t really understand what she said.

Ward Sandler 18:38
Yeah, and I think for some people listening, especially maybe those aren’t aren’t as far along with their business, they might hear Wow, $500 for an hour call that’s really high. But what I hear is, that’s a really good value, because you’re distilling all this knowledge, 10 years and decades worth of working with companies in various situations, and you’re able to take all that all that information and synthesize sighs it individually, whoever’s on the call with you to give them all the information in an hour and then all that prep time you’re doing. So I think that’s actually an amazing deal.

Robbie Baxter 19:07
Oh, good. I’m glad you think so I think I mean, I hope people find it valuable that that’s truly my intention. And I try you know, the kinds of things that I try to go through with people. And we can talk about this more on the call if this is useful to your to your listeners. But you know, getting really specific about what should be free and what should be paid for in your business model, what the right price point is, how many tiers of pricing you should have, what should be all a cart versus what should be included. Like really how to put together that pricing model and what rules of thumb to keep in mind as you iterate on your pricing. Thinking about who your best member is so that you can optimize your not just your offering, but also how you recruit and onboard new members to keep them sort of how to make sure all those pieces fit together. And then how to deepen and expand a relationship with a good customer good member. So we really I mean, I really want to get into the nitty gritty. And that’s actually what’s also in the book, The goal is to help as many people as possible. And I’ve just keep looking for different ways along kind of the price value continuum to get the price low enough that more people can access it.

Ward Sandler 20:13
Fantastic. So in closing here, what are some resources that you would recommend for folks, so blogs, podcasts, books, courses, anything like that outside of your own stuff?

Robbie Baxter 20:24
Yeah, there’s so much stuff out there. You know, it’s funny, like five years ago, even there was hardly anything for subscription people, and hardly anything for membership. But now, there’s a lot of subject matter experts that I think are really credible, including you. And Schanzer wrote the book subscription marketing, actually wrote the foreword for her. This is her third printing of it. So it’s been a very successful book. I think that’s great for people. Peter fader is a Wharton professor who’s got deep expertise in customer centricity, which can be really helpful as you’re thinking about how to design your offering to really be focused on the people that you Serve. Jason Lemkin, who runs faster you know as a as like Software as a Service, Sastre co authored a book with Aaron Ross called from impossible to inevitable how hyper growth companies create Predictable Revenue. That kind of breaks down how to acquire and retain members. I think that book and also the Sastre community is a really helpful place for Customer Success sort of thinking about how do we support our members once they’re already in the community? I think Lincoln Murphy, who’s a, you know, an independent right now, but he’s worked at several Customer Success companies. He’s really smart on this topic. Those are trying to think if there’s any, any others, there’s subscription Insider, which really gets into issues around, you know, operations, legal business, all the back office stuff around subscriptions, I think that’s really great. Teen xos book, subscribed is a great book about subscriptions and john Ward, follows the automatic customer, where he focuses on all different kinds of businesses that are building forever transactions with the people that they serve. So those are that’s kind of a data dump. Those are a bunch of the sources that I really like that I think are really helpful for membership entrepreneurs.

Ward Sandler 22:16
Fantastic. So for you, Robert, what’s the best way for listeners to learn more about you and your business and what you offer?

Robbie Baxter 22:23
robbiekellmanbaxter.com, my name.com is probably the best place you can also find me on you know, anywhere you do social media, LinkedIn, Twitter, Facebook, Instagram, just put my name and there’s you know, you’ll you’ll find lots of lots of lots of ways to reach me. I’m not I’m not hard to find.

Ward Sandler 22:42
Great. Well, thanks for spending time with us.

Robbie Baxter 22:44
Yeah, it’s been a real pleasure ward. Thank you for having me.