The Prolific Wisdom community of Harvard alumni reviewed John Warrilow's new book, The Automatic Customer, about the membership and subscription based economy.
4 stars - Very worthwhile read. Good ROI on time spent reading. A few valuable actionable ideas.
The Automatic Customer gives insight on the emerging subscription based economy. The subscription based business model dates back to the 1500s when European map publishers invited their customers to subscribe to map updates.
Now, monthly subscriptions and memberships are becoming more prevalent in many industries so "The Automatic Customer" is timely, and does an excellent job at distinguishing the different models. It turns out, developing customer relationships into fertile ground for cross-selling and up-selling is an art as much of a science. The author exposes the 'art' point of view with numerous stories of experimentation. John suggests specific financial measurements and benchmarks to show what "best in class" means.
We like that John includes some real examples of companies we'd heard of and covered some of their top-level numbers. We also liked the practical guidance. Amazon Prime's success was not about the $79 a year revenue boost, but about changing people's inclination to buy through Amazon.
The book brings clarity between the various models and also offers measuring sticks and tool box of tips. Life Time Value (LTV) and Customer Acquisition Cost (CAC) are key. If your CAC Payback Period is over 36 months, you've got a problem.
Wild Apricot, Membergate and Cratejoy are three services that can be used to set up recurring businesses. Subscription Site Insider and WhichTestWon.com also provide great additional insight. Mequoda and Hubspot are great inbound marketing services.
To retain members, get them properly onboarded and hooked within 90 days, and communicate 'like a giddy lover.' Look after your advocates and listen carefully, and make sure you have Zendesk or Desk.com type customer service tools in place.
To be critical, we would have like to have seen more of the psychological underpinnings explained and even more examples. There's certainly an opportunity for a follow-on book.
All in all, this is a great read, and we highly recommend it. There's a quite a few actionable ideas in this book.
Mark Brooks (PLD 2014) - CEO, Courtland Brooks
Georges Selvais (MBA 1975) - MD / Co-founder, Catalyst Quality
Hena Rana (PLD 2014) - Operations Manager, Beca
For the love of learning.