The word ‘disruptive’ is thrown around a lot lately. It made Forbes’ list of the 10 most overused startup buzzwords. But there’s a good reason for that.
Disruption is all around us. It’s better to acknowledge and embrace that fact (even at the risk of overusing buzzwords) than to ignore it and find yourself marginalized in a world that has changed right around you.
These are a few of the thoughts that went through my head on reading Disrupting Digital Business.
In Disrupting Digital Business, Ray Wang of Constellation Research describes various trends fueling business disruption. These include:
As a marketer, I love the fact that the book frames all of these discussions in the context of making and keeping a brand promise. In an era of digital disruption, success goes to those companies who use disruptions to deliver a greater brand promise:
“When you keep your brand promise, you keep your value. You can keep your margins.”
Subscriptions, Disruption, and Marketing
It’s the sign of a good book that you find it rattling around in your head and coloring your thoughts after finishing it. For example, I encountered this article by Tien Tzuo of Zuora in Fortune about why an MBA isn’t useful in today’s world, because of the changes wrought by the shift to the subscription economy. He says, “Right now we are going through a once-in-a-century transformation in business that is throwing out all the existing rules.”
Tzuo is speaking of MBA programs in this quote. But I’ve had similar thoughts about the practice of marketing. As business models change from selling things to selling subscriptions and memberships, marketers that don’t adapt their practices to match the revenue model risk becoming less and less relevant.
Looping back to Ray’s book, marketing has a critical role to play at this moment because the brand promise is essential in an age of digital disruption. In this evolving world, marketing is becoming more relevant, not less so. It’s imperative that marketing organizations stay in tune with the changes happening in the business.
All of these pieces should come together in interesting ways in Zuora’s upcoming Subscribed Conference in San Francisco next week. I’ll be there leading a panel on customer loyalty and super-users. Tien Tzuo, as the CEO of Zuora and a keynote speaker, will share his thoughts on subscription models and their evolution. As another keynote speaker, Ray Wang will speak about disruption. And I can hardly wait to hear what everyone has to say.
In the mean time, I recommend that you read Ray’s book and start thinking about the ways that the grounds may be shifting in your own industry.
On Wednesday, May 13, I’ll be hosting a webinar on Creative Approaches to Retention Marketing.
To whet your appetite, here’s a sneak preview of a few of the topics:
The webinar is hosted by Totango; register for it here.
We’ll leave ample time for questions and discussion, so please join in if you’re interested.
Wow, I’ve walked the length of Japan.
The team at Fitbit sent me that nugget of data recently, and it’s a great example of value nurturing using data.
Fitbit is all about collecting and sharing data. It reminds me if I’ve met my goal for each day and week. But the company goes further by proactively sharing my cumulative progress. Helpfully, it puts large numbers into a meaningful context, like the length of Japan. And the company invites me to share that success with others in my social networks.
Nurturing Customer Value with Data
Value nurturing is the practice of helping customers realize value from your solutions long after the sale. (See the previous blog, Value Nurturing: Marketing Meets the Subscription Economy.) It’s one thing to help people be successful with your solution. The next step is to help them understand the value of your solution by sharing data with them.
People use fitness tracking devices like the Fitbit to monitor and measure activities; that’s the functionality they expect from the device. But why do people want to monitor and measure their steps? Because they value exercise and want motivation to exercise more. Increased activity is the ultimate objective.
By showing me the data about how much I’ve walked, the Fitbit team is reinforcing this deeper value. It’s pointing out my own success, using data it collects.
This is a core value nurturing practice: helping people recognize the value of being a customer.
Consumer-based businesses use this strategy frequently. For example, every time I check out at a Safeway using my loyalty card, the cashier tells me in person how much I’ve saved. That reinforces the value of using that loyalty card – a subscription I pay for with my personal information.
Here’s the challenge for marketers: can you find ways to nurture your existing customers with data you’re already collecting? When people are having success with your solution, can you do the math for them and let them know how well they’re doing? Do you celebrate successes, even the small ones?
If you’re interested in additional value nurturing strategies, subscribe to my monthly newsletter.
It’s time for marketers to give customer retention a little love.
According to the State of B2B Product Marketing 2015 report by Regalix Research, customer retention marketing comes in dead last in the list of B2B marketing activities. Only about one in four B2B marketers plan for customer retention.
Optimists like myself see this situation as a tremendous opportunity. Getting serious about customer retention marketing gives you the chance to jump ahead of your competitors and earn lasting loyalty from customers.
If customer retention marketing interests you, I’d invite you to join me in a webinar on May 13th titled Creative Approaches to Customer Retention Marketing. You can register for it here.
This will be the first in a series of webinars hosted by Totango with the speakers from its recent Customer Success Summit.
And if you have any creative customer retention strategies to share with me ahead of the webinar, get in touch. I’m always looking for more inspiring examples.
In the subscription economy, marketers must dedicate time and energy to nurturing their current customers.
If you sell using a subscription model, then your future revenues depend heavily on the success and loyalty of your current customers. The potential payback for marketing to those customers is huge.
It sounds both simple and obvious. Yet in many businesses, marketing practices remain unchanged while revenue models are shifting. Many marketers are so focused on generating leads that they don’t have cycles for their current customers. Some marketing teams abdicate responsibility for the customer relationship at the moment of the sale.
The shift in revenue models requires a corresponding shift in marketing practices. Let’s look at how traditional, established marketing practices need to adjust as businesses shift to subscriptions:
These new practices span a wide range of marketing activities, from helping customers achieve success quickly to adding value outside of the solution itself. I’d suggest that they can be grouped together in an umbrella marketing category called Value Nurturing. Put simply:
Customer value nurturing is the practice of helping the customer realize value from your solution.
Value nurturing is the next logical step after lead nurturing:
I’ll be blogging more about value nurturing strategies in the weeks and months to come. My book on Subscription Marketing discusses strategies for value nurturing in detail. If you’re interested in exploring these topics with me, be sure to sign up for my email list.
Image: Paweł Bukowski on StockSnapIO
“It’s time to move the discussion away from today’s latest hot marketing tools and tactics to what really counts: convincing customers to trust you with their business – not just once, but time and time again.”
That’s the voice of reason. More specifically it’s the voice of Linda Popky’s new book, Marketing Above the Noise. Linda makes that statement in the introduction, and proceeds to back it up in the pages that follow with detailed, common sense marketing wisdom based on experience. Well-thought-out examples illustrate every point.
In an age of growth-hacking, social media, SEO-optimization, gamification, and the marketing mantra of the week, how wonderful to put the fundamentals of marketing into perspective. (See this mind-boggling infographic about the marketing technology landscape from the Chief Marketing Technologist blog.) Nearly every day we face a new technology, channel or strategy.
Linda lays out the marketing fundamentals in her Dynamic Market Leverage Model. The model is a way of stepping through the fundamental tenets of successful marketing strategy and execution.
Customer Marketing (Value Nurturing) Is Part of the Strategy
Linda also touches on the topic that is near my own heart recently, which is marketing to your existing customers. Her words on this: “Your marketing should reinforce the wisdom of the customer’s choice.”
Overall, this is a comprehensive tour of effective marketing practices, incorporating the latest trends but not letting them distract the reader from long-term objectives. I’d highly recommend the book to anyone either starting anew in the field or ready to take their own practices to the next level. Marketers of all levels can find inspiration and guidance here.
Question of the day: Are memberships one variation of the Subscription Economy (as suggested in John Warrillow’s The Automatic Customer, which I reviewed here)? Or are we really experiencing the growth of a Membership Economy, for which subscriptions are merely one revenue model?
Which is a subset of which? Or does the reality look something like this instead?
The question arises after reading Robbie Kellman Baxter’s book The Membership Economy. The book takes the position that subscriptions are one revenue model within the broader Membership Economy.
The terms Membership Economy and Subscription Economy are different filters into the same set of trends and businesses. When you’re looking at these trends from a revenue perspective, you’re likely to think about subscriptions. If you focus on human behavior, as this book does, membership is a more interesting angle.
Here’s a quote from this discussion in the book:
“What makes a membership organization is the attitude of the organization and the feelings of its members—not whether members subscribe. Companies’ failure to see themselves as part of this bigger trend can limit their potential to build relationships and strengthen their models.” (Robbie Kellman Baxter, The Membership Economy.)
My own book (Subscription Marketing) speaks of the Subscription Economy, but I love the emphasis on human relationships that is inherent in the term Membership Economy.
Enough about terminology, let’s get to the book.
In The Membership Economy, Robbie shares her insider’s perspective into the challenges and opportunities of building a membership-based business. After the necessary discussion of terminology and trends, she dives into seven key strategies and tactics for membership businesses, including onboarding, pricing and technology. I’m particularly interested in the customer retention strategies. I love that in addition to retention, she stresses the importance of letting customers go gracefully.
The third section of the book digs deeper into different types of subscription companies (online communities, online subscriptions, loyalty programs, etc.), with case studies of each. The fourth section offers guidance on making the transition to one of these models within your own business.
The book is well written and engaging, with interesting stories and examples. If you’re considering making a transition and want a thoughtful discussion on topics such as the uses of freemium or risks of different pricing models, this is a terrific resource.
If there’s a fan club for Robbie Kellman Baxter, I’ll be a member.
And if you’re interested in this topic, sign up for my monthly newsletter, exploring the subject of marketing for businesses with recurring customers.
Have you ever heard of the Blue Car Syndrome? It’s the non-scientific name for what happens when you buy a blue car, then start seeing blue cars everywhere. I’ve been experiencing the effect lately when it comes to subscription businesses.
While working on a book about the implications of subscription models on marketing, I started seeing subscriptions everywhere. My Safeway club card? That’s a subscription paid with data. Amazon Prime? Subscription. Insurance policies? Check. The more I thought about them, the more variations I found on the subscription model.
John Warrillow has done the work of describing, labeling and analyzing those different models in his new book The Automatic Customer: Creating a Subscription Business in Any Industry.
The book identifies and labels nine distinct variations on the business model.
The book discusses the differences in these variations, as well as their fit for different industries and businesses. It does a great job of describing the overall benefits of a subscription model. Warrillow clearly explains the revenue metrics that businesses should track in a recurring revenue environment.
I loved learning about new subscription businesses I hadn’t encountered in my own searches, including Standard Cocoa and Conscious Box.
Key takeaway: If you’re not sure about how a subscription model might fit in your business, or if you’re starting up a new business and debating revenue models, this is your go-to resource.