Robbie Kellman Baxter: Part 2 of an interview by Bob Morris

BaxterRobbie Kellman Baxter created the popular business term “Membership Economy.” She is the founder of Peninsula Strategies LLC, a strategy consulting firm. The Peninsula Strategies website is Her clients have included large organizations like Netflix, SurveyMonkey and Yahoo!, as well as smaller venture-backed startups. Over the course of her career, Robbie has worked in or consulted to clients in more than twenty industries.

Before starting Peninsula Strategies in 2001, Robbie served as a New York City Urban Fellow, a consultant at Booz Allen & Hamilton, and a Silicon Valley product marketer. As a public speaker, she has presented to thousands of people in corporations, associations, and universities. Moreover, she has been quoted in or written articles for major media outlets, including CNN, Consumer Reports, The New York Times, and the Wall Street Journal. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business.

Robbie’s book, The Membership Economy: Find Your Super Users, Master the Forever Transaction, and Build Recurring Revenue, was published by McGraw-Hill (March 2015).

Here is an excerpt from Part 2 of my interview of Robbie.

* * *

Morris: When and why did you decide to write The Membership Economy?

Baxter: I have been thinking about this topic for 11 years, since I consulted to Netflix and fell in love with their business model, both as an MBA and as a consumer. That project changed the trajectory of my consulting career, and I began to specialize in business models that featured elements like subscription, community and membership.

As I saw one industry disrupted after another, from movies to software to publishing to hospitality, I knew I had to document this massive transformative trend, to help other leaders.

Morris: Were there any head-snapping revelations while writing it? Please explain.

Baxter: That these trends went well beyond Silicon Valley tech companies and were impacting

o The largest organizations as well as Mom & Pops and independent consultancies

o Both public and private companies

o Corporations and not-for-profits: I dramatically underestimated the impact of the Membership Economy when I started writing, and it was only through the process of researching the book that I realized it

Morris: To what extent (if any) does the book in final form differ significantly from what you originally envisioned?

Baxter: I had to stop writing halfway through, when I reached Chapter 6 (of 10) and realized that I had a lot more to say that didn’t fit into the structure I had sold to the publisher. I started over.

Morris: What is what you characterize as “the darker side” of the Membership Economy?

Baxter: Membership is based on trust between the organization and the member. This can go wrong in two ways:

1. When the organization trusts the members too much…can result in longtime or extremely active members having too much influence over the future direction of the organization

2. When the members trust the organization too much…cab results in the “gym membership” issue, when the organization mistakes inertia for loyalty, and continues to collect fees even though the members really aren’t getting much value

Morris: Of all the strategies that are used to attract new members, which seems to be the most effective? Why?

Baxter: Referrals. Because happy members are best at identifying others who will get tremendous value from the organization, and also best at recruiting and retaining those members.

Morris: When attempting to [begin italics] retain [end italics] members`, which strategy seems to be the most effective? Why?

Baxter: Organizations should start with this question, before they recruit new ones. They should make sure that their offering meets a specific need that will last “forever” or at least a long time—like “access to great video content”. The problems arise when the organization builds a product that doesn’t really meet any one mission perfectly but instead has features that might be valuable to some people…bundling features does not equal meeting a specific need.

* * *

To read all of Part 2, please click here.

To read Part 1, please click here.

Robbie cordially invites you to check out the resources at these websites:

Peninsula Strategies link

Robbie’s Amazon page link

Robbie’s Business of Consulting blog link

LinkedIn link

Twitter link

The Membership Economy video trailer link

The Membership Economy video summary link

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