6 electric ideas changing the way we manage: Part 2

30 June 2016 -

In the second of our series, we take a look at why you need to starting your clients like members, not customers

Matt Scott

From the first hunter-gatherer tribes to the rise of LinkedIn, Facebook or Twitter, everyone wants to be a part of a community.

Communities have revolved around mutual benefit and the shared desire to be a part of something, to fit in. They even influence your choice of technology: are you iPhone or Android? Mac or PC?

Such thinking doesn’t just apply to the general public and social groups; it also applies to your customer base. Robbie Kellman Baxter calls this phenomenon “the membership economy”.

Working in this new membership economy requires a new way of thinking, whereby your customers are, in fact, not customers, but subscribers, members of a community serviced by the product you’re selling.

The way to thrive in this new world is to nurture an ongoing relationship, and to avoid treating customers as a series of single transactions, where money is exchanged for a product or service.

To do this, you’ll need a distinctive employee culture.

Silicon Valley technology company Gainsight epitomises the culture needed to be a success in the membership economy.

CEO Nick Mehta has disbanded the customer support and satisfaction teams to make way for a customer success department, whose role is to make sure that customers succeed in their aims, and to build loyalty and maintain a relationship that endures past the initial transaction.

To deliver this kind of employee culture, you’ll need customer success-oriented employees who consult with customers rather than just following scripts laid down by software programs.

Employees need to be empowered to make decisions on a case-by-case basis, so they can tailor their response to the individual customer’s needs.

Baxter describes membership as the “holy grail of business”, as it ensures recurring revenue; smooths out cash flow; and provides the foundations for further investment in growing the business.

To discover this holy grail, you need disciples of a culture that’s focused on building a relationship with customers.

This is a summary extract of Robbie Kellman Baxter's book The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue, which was shortlisted for CMI's Management Book of the Year