Robbie Baxter joined me on the Conquer Local podcast to explain the membership economy and why subscription is a relationship, not just a price.
Every agency owner and media exec I talk to eventually asks some version of the same question. How do we add monthly recurring revenue to the business? So when I had the chance to put Robbie Baxter on the Conquer Local Podcast, I jumped at it. Robbie is the founder of Peninsula Strategies, author of The Membership Economy and The Forever Transaction, and a consultant who logs over a million miles a year working with Netflix, the NBA, eBay, Oracle, Electronic Arts, and Microsoft on subscription strategy.
If anyone has earned the right to teach the rest of us about building a subscription business, it is Robbie.
The Membership Economy In Plain Language
Robbie’s core idea is that a subscription is not a pricing tactic. It is a relationship model. When you sell a product once, your job ends at the transaction. When you sell a membership, your job begins at the transaction. Everything you do from that point forward is about keeping the member engaged, delivering recurring value, and earning the next renewal.
That reframe changes how every department in the business operates:
- Marketing stops chasing one time conversions and starts nurturing long term engagement
- Sales stops celebrating the close and starts celebrating the onboarding
- Product stops shipping features and starts designing for daily habit
- Customer success becomes the actual revenue team
The Car Wash Story
Robbie and I got into a conversation about car washes, of all things, that ended up perfectly illustrating her point. She said no one actually wants to go to a car wash. They want a clean car. Silicon Valley car wash services now come to your office parking lot or your driveway overnight. Same outcome, different delivery, and the friction drops to zero.
Then she said something that crystallized the whole membership idea:
“A lot of car washes have subscriptions now where you join and then you have unlimited car washes and it maybe costs the equivalent of two car washes and you get unlimited car washes for the month.”
The business wins because heavy users stay loyal, light users pay more than they use, and everyone stops comparing prices at every visit. Subscribers reduce the mental cost of the next purchase to zero. That is the membership effect in action.
Why So Many Subscription Businesses Fail
Robbie has seen plenty of companies slap a monthly fee on an old product and call it a subscription. That does not work. What separates the winners from the rest is the commitment to what Robbie calls the forever transaction. The idea that the customer relationship does not end at the close. It evolves.
Common failure patterns she has seen:
- Treating the subscription as a pricing mechanic instead of a relationship
- Investing in acquisition without investing in retention
- Building a product that delivers value once, not on a recurring basis
- Forgetting that cancellation friction is not a strategy, engagement is
For more on why retention beats acquisition math, read my piece on the new rules of customer relationships.
What Agencies And Media Companies Can Learn
I pressed Robbie on what a local agency or media company can take from this playbook. Her answer was refreshingly practical. You do not have to become Netflix to benefit from membership thinking. You just have to start treating every client as a forever customer and design your service delivery around recurring value.
For an agency that means:
- Productizing services into clear monthly deliverables
- Reporting on the same cadence every month, without exception
- Building in quarterly strategic reviews that earn the next renewal
- Creating an onboarding experience that sets the tone for a multi year relationship
That is the agency version of a forever transaction. It is also a direct path to the monthly recurring revenue every agency owner says they want.
Where To Go From Here
Pick up The Membership Economy or The Forever Transaction. Then audit your own business against the four points above. If your customers only hear from you when you are invoicing or upselling, you do not have a membership. You have a transaction in disguise. Fix that and your retention will take care of itself. For the leadership lens on long term customer relationships, see my post on scaling and the three jobs of a CEO.