All the software companies are doing it.

Companies who make physical products are doing it, too. So are consultants and coaches.

Heck, even local small businesses like florists and hairdressers are starting to do this. And it’s what Mixergy is based on.

So what is it? Using a subscription-based business model.

And there are good reasons why everybody’s doing it…

Recurring revenue, more predictable demand, greater customer value, and higher valuation of your business…

What’s not to love about that?

So…we invited Robbie Kellman Baxter to Mixergy to talk about how to grow your membership business the right way.

Robbie is the founder of Peninsula Strategies, which advises subscription- and membership-based businesses on growth strategies. She’s also the author of The Membership Economy.

In the full course, you’ll discover:

  • Why the Caesars Casino’s loyalty program is a MORE valuable asset than their fancy resort…and how startups can use Caesars strategies in their own membership programs
  • Why you should NEVER, EVER launch your membership program with a “big reveal” (and what to do instead)
  • How to increase engagement IMMEDIATELY after a member signs up, so that they won’t cancel in a month or two
  • How to keep your members hooked, even when you start adding more products and services
  • and much more!

One idea that really stood out: there’s a CRITICAL step most tech startups try to skip when they launch a membership business.

Here’s an excerpt on that, from strategy #6 of 7 in the full course:

Robbie: [Netflix] did so much research to understand what people really cared about, and I’m just going to say, I know a lot of your listeners are in technology. The temptation in technology is to not invest in marketing and not invest in market research, and to think that you know best about the product because it’s a new space or a new technology.

And Netflix invested in understanding their market and they really understood why people were signing up…it was all about the late fees.

Andrew: The late fees, why were people so upset about late fees?

Robbie: Because they felt cheated by it…at one point I think Blockbuster was making more money on late fees than they were making on rental fees. And any time that a business…is making more money from their customers misusing their product and being penalized, than from actually providing value, you have a big problem.

Andrew: I see, and so people who are customers of Blockbuster were so upset about late fees that when they saw…one of [Netflix’s] early ads and it says ‘no late fees’ right in the center, as easy as that, they didn’t have to communicate the whole value proposition behind Netflix. They just picked the one thing that customers really cared about and that’s what they emphasized.

And there’s another big reason you don’t want to miss this course…

Memberships might be the business model du jour, but you really have to get it right. From day one.

Otherwise, your members will end up hating you. And in the early days of this tech revolution, people often got it dead wrong.

For instance, remember Napster? They got a ton of users. “They were so successful with building word of mouth and building traction,” says Robbie.

However, they made a big mistake right from the beginning…

(Yeah, BESIDES that whole little copyright infringement issue that ticked off Metallica and Dre…)

The mistake they made with their members is that they gave it away for free.

“When they needed to implement a payment model, they had already trained their users to expect online music to be free,” says Robbie. “It is very hard in a membership business to raise your prices. It’s not impossible, but it’s a lot easier if you’re adding additional value and layering on additional tiers, as opposed to charging more for the same experience.”

When you set your model up correctly from the start and you build on it the RIGHT way, you’ll enjoy positive cash flow, higher profit margins, and the peace of mind of having customers for life.

Also, be sure to check out these other Mixergy interviews and courses, so that you’ll discover how to: