Product Management for Subscription Products
Robbie Kellman Baxter brings over twenty years of strategy consulting and marketing expertise to Peninsula Strategies, her strategy consulting firm focused on helping companies leverage subscription pricing, digital community and freemium to build deeper relationships with customers. Her clients have included start-ups and mid-sized venture-backed companies as well as industry leaders such as Netflix, Oracle, Electronic Arts, and eBay.
She recently spoke at a Product That Count hosted webinar and discussed project management in a subscription-crazy world. Topics include developing an MVP; rethinking product roadmaps for acquisition and retention; choosing the right metrics; building usage growth and engagement into product design; and building a membership mindset culture across your product team.
The original presentation on subscription products that Baxter planned to give took on a new life in the face of a global pandemic. However, she mentioned that many of the points are more relevant now than ever before. You can view the entire presentation above, or check out the highlights that are detailed below:
On the silver lining for businesses in a pandemic
It helps to look at the good in situations like this. Some honor healthcare workers who are saving lives. Others tell the stories of businesses that are innovating to help others during this pandemic. We also remind ourselves that creativity happens with our backs against the walls. Baxter shared one other positive.
“The traditional expectations for businesses have gone out the window, which might give us an opportunity to invest more in the long term if you know you’re not going to hit your short term goal. There’s an opportunity for innovation, for creativity for following the north star of changing customer needs. There’s a little bit of a break. Times of crisis and constraint on the business side lead to greater creativity.
This is a moment for creativity and an opportunity to leapfrog forward instead of moving slowly and deliberately. Another thing that I think could be good news is that during times of crisis, people accelerate and intensify relationships. We do that because we have no choice, right? We’re scared, we’re vulnerable. We don’t know what tomorrow is going to hold for us. So we have no choice but to trust the people around us and the organizations that are taking care of us. So, it’s a real opportunity right now to invest in building the relationship both with existing customers or subscribers and also with tomorrow’s and yesterday’s customers.”
On subscription products being a forever promise
This is the reason that subscription products are so attractive to businesses.
“A forever promise is the reason that your customers decide they’re going to trust you that you’re going to solve a problem or help them achieve a goal forever for as long as they have that problem or as long as they want to achieve that goal. For some of you, it might be about entertaining people or helping them be more productive. Connecting them to one another, or giving them confidence that mundane tasks that they don’t enjoy doing are getting done in the easiest and most efficient way so they can focus on higher-order needs.”
On identifying the membership economy
When working with some of her larger clients, Baxter began to see some commonalities. She coined it The Membership Economy.
“With Netflix, Survey Monkey and Intuit, and a whole range of other organizations I started seeing the same patterns across these businesses. The recurring revenue was the first thing that people see, but also the way that they develop their products. The focus not just on the trigger benefits or the headline benefits that drive acquisition, but also on the engagement and retention features.
That guaranteed a long relationship and a high lifetime customer value. A focus on doing one thing really, really well for customers, and being willing to continue to evolve the way you deliver it. The packaging of the value in terms of different products and different features in order to continue to offer your forever promise in the best way possible. It’s the membership economy.”
On subscription fatigue
Baxter discussed how some people have reached a level of fatigue with subscription products. She shared three reasons for this. Take note, so you know what to avoid.
“There is this issue right now of subscription fatigue. It’s caused by three things. One is lack of product-market fit. You can’t just take a group of features and charge a subscription just because those are the features that are available or those are the products that your company happens to make. It has to be optimized around the customer. The product-market fit has to extend past that moment of transaction. The fit has to be enough to justify someone buying it. But it also has to justify them staying engaged over time.
The second reason for subscription fatigue is subscription guilt, which is I pay for the subscription it’s really, really great. I love it so much, except that I don’t use all of the benefits. I’m not using it the way I intended to and that makes me feel really bad about myself. And so I’m going to cancel. So in that case, the customer actually says they love the product, but they cancel anyway.
And then the third reason for subscription fatigue, and I think this is really important, and it’s really emerging right now as a frustration with subscription businesses is a sense that some of the businesses are taking advantage of the consumer trust.”