Many are currently re-evaluating their business or organisation’s offering and assessing its value to its members and subscribers in a bid to keep control and growth in a market hit by the recent pandemic.
The outstanding success of subscription businesses in the UK could push some towards changing their business model to reflect this. When making such a critical business change, it is essential to define the real meaning of “membership” and “subscription”.
Are they mutually exclusive definitions, or can we move forward and interchange the two in our business models?
Many of our key workers will have come across this notion of membership and subscription during the pandemic if they have obtained a Costco’s membership. Most of us will know that Costco Wholesale operates an international chain of membership warehouses dedicated to offering members the best prices on quality goods at bulk. These memberships are not particularly expensive, and they give you access to a vast variety of goods that you cannot help but be tempted to buy. (You will find yourself rationalising the 25 boxes of kettle descaler at 50% off because you live in a really “hard water” area. You will also find yourself three years later with a broken kettle and wonder why you have NEVER descaled it!)
You can purchase alcohol, toilet roll, and giant trays of baked goods for competitive prices, but you only have access to these seemingly great deals if you have a current membership card. This membership allows you access to their multiple sites and discounts on all sorts of things. BUT, to keep this membership, you must pay a one-off annual fee – and there is the subscription part of this member-focused business! As you can see there initially appears to be little distinction between the two terms. Very often, they are so closely associated that very few consider them to be different in any way. However, they are two completely different concepts!
So how do we decide which is right for us as a business to take forward? First, we must understand the value of each one.
What is a membership?
Membership is the idea of belonging to a community or group. It is a relational concept.
When first considering a membership, we do not initially look at the overall cost or price, although nearly all have an element of some financial transaction. It does not matter whether you are a member of a professional organisation such as the CIPD, or a member of a private club like Soho House, the feeling that you are most aware of is how it impacts you and helps create an identity – you as the “insider” and everyone else an “outsider.”
Many memberships are exclusive or have a particular set of rules or requirements that must be met before you are eligible to apply. Most offer excellent benefits, and for some, just having access to other members may be the thing that you value most of all.
What is a subscription?
A subscription is a financial contract. It is a transactional concept.
A subscription agreement does not usually include the benefits of belonging. Still, we are all aware that we would rarely make a regular payment for something that did not benefit us as an individual. The critical element of a subscription is truly financial in nature. When you sign up to a subscription, the contract or agreement you make will indicate the frequency of the payments you will make and the process for renewals.
Some subscriptions allow you to pay a certain amount, whether monthly or yearly, to have access to discounts. Whether we are looking at Amazon Prime or Beauty Pie memberships, the annual or monthly fee is the subscription.
So, can you have one without the other?
Yes, you can! I am a member of various social and animal welfare groups and hold loyalty cards for Sainsbury’s and Waitrose, which do not charge me for being a member but give me benefits when interacting with them. Each gives me a card or visible identifier that I am a member of their community.
In a similar sense, you can also have a subscription without membership. Amazon Prime was initially an offering that meant I paid an annual fee to have cheaper or free shipping of my goods. There was no “prime” community, and I did not and still do not feel a sense of community or belonging, my relationship with them is transactional. I know that they have worked hard to add increased value and interest to their “prime” offering, and one day it may start to evolve into membership. Still, right now it is a service to which I pay an annual fee for free shipping, unlimited access to fiction and movies and music.
Is there power in being able to harness both concepts?
A relative newcomer to the membership/subscription debate (I will say now that I am a member who pays a monthly subscription) is Beauty Pie, a club that sets out to be a disruptor in the beauty and skincare world. They provide some of the skincare and makeup sourced from the top 10 or 12 labs in Italy, France, Switzerland and Japan. They offer exclusive discounts on these products where members pay the cost price. When you are talking about Swiss Skincare, this can mean getting a product for under £12 if you are a member, but if you are an “outsider”, you pay in the region of £80 for the same product.
As a member, you have access to these exclusive products, get to know the evolution and “narrative” of each scent or colour, have personalised skincare programmes, access to blogs, advice, and can interact with the team regularly.
Most members do not talk about the subscription fee (even though it can be expensive depending on what level you choose) because the members feel like members. A huge community connects on Facebook and Instagram that spans continents, with American and British members and influencers organising face-to-face meets and now in the pandemic world via Zoom. They support each other through skincare journeys and create groups to offer advice. The Beauty Pie model continues to prove that people have no problem paying regular subscription fees when we feel like we belong to something valuable and more inclusive than just buying a product or service.
When you connect a community to a sound financial construct offering tangible value, you really can bring memberships and subscriptions together for a successful and long-lasting result.
Illuminate Recruitment provide professional, reliable, tailored solutions, offering a full recruitment service to Membership organisations and Subscriptions based businesses throughout the United Kingdom. Call 0203 876 5481 or email [email protected] for more information.
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