Dose #81: Subscriptions versus Memberships

Matt here with your weekly Subscription Prescription 💊

One of the rising trends in ecommerce right now is memberships. In this dose, we dive into the differences between the two, how memberships are changing ecommerce, and which one is a better fit for your customers.

Reading too much already? This week’s dose is also on our podcast:

This week’s podcast dose dives deep into the same topic, in case you prefer to hear me ramble on about this topic instead of reading it. :)

When I Say Subscriptions, You Say “Which Kind”

As many of you know, there are a few different kinds of subscriptions. Even some memberships are viewed as subscriptions. For this discussion and all of my content, when I say subscriptions, I’m talking about a physical good.

This is something getting shipped to you on a repeat schedule. This could be a monthly bottle of supplement pills, pet food, a replacement water filter, an outdoor box, or an annual bed linen subscription.

The point is that you’re buying a good on a repeat basis, most often in exchange for a discount.

Memberships, on the other hand, are typically about access. A gym membership or Amazon Prime are the most common types of these. A gym membership means you can access the facility and equipment during certain hours. An Amazon Prime membership gives you access to Amazon Video and Music, shipping discounts, and other special offers.

Memberships cost you money upfront or on a recurring basis in exchange for value.

How Memberships Are Changing the Game

Many brands I talk to feel cringe sometimes asking for a subscription commitment. Subscriptions aren’t always looked at favorably, and it can be challenging to drive conversions. Subscriptions are ultimately all about finding your long-term ideal customer.

Following that thinking, memberships are another great way to identify and sell to your long-term ideal customers. Instead of just offering your regular product on a subscription, a membership offers more.

You can give cash back, store credit, and access to exclusive products or content. You can get even more creative by offering special Zoom calls with the founder or early access to new product releases… the list goes on and on.

The beauty of a great membership offer is that you’re intentionally selling to people who already engage and buy from you, but in a way where both sides benefit, and you incentivize them to buy even more from you.

Should You Focus on Subscriptions or Memberships?

Like most things in ecommerce, there are a million things you could be doing. But the reality is that there are only so many things any team of any size can do and execute well at a given time.

So, what should you focus on to move the needle for your brand?

(Please feel free to hit reply to ask questions or outright argue with me on this one.)

If you’re still figuring out subscriptions…

Start with the subscription. Get feedback. Focus on the offer. You can steal from the membership playbook to enhance that subscription offer and drive more recurring revenue.

As an example, let’s say you sell pet food and you’re considering ways to leverage great content on training new puppies. Instead of turning that content into a YouTube channel or something members can access, include it as a perk of subscribing.

The goal here is to focus on your offer. Drive more subscriptions. Put more work into getting people to buy from you. But also put more time into data collection, feedback, and talking to customers about what kind of value they see from the subscription.

This practice will reveal more opportunities for you in time—product ideas, new content, and ultimately a great membership offer.

If you’re doing well with subscriptions…

Look into offering memberships. On a past dose, I explained what Milk Bar has done with their membership offer–First Bite Delivered. When you truly understand what your customers love and value from you, then memberships can be an incredible opportunity.

When you have more insight into why people buy and what value they see from the product and experience, you can lean into that with a membership. You can make an offer that is a no-brainer.

Memberships bring instant revenue and higher profitability to your brand, but be sure you know what people will pay for before you offer them.

The Goal is Driving More Revenue per Customer

Remember that this is all about targeting your best customers to unlock more value. Keep that in mind when weighing the difference between subscriptions and memberships.

If you want some ideas on how to offer them side-by-side, hit reply and I’ll send you some of mine.

That’s it for this week’s dose! Hope you’re constantly on the search for ways to get more value from customers.

Stay tuned for Dose #82 next Tuesday!

- Matt Holman 🩺

The Subscription Doc