Why The Membership Economy is Relevant to You

Written by Arianna Rehak on July 14, 2016

What do Amazon, Starbucks, and Adobe have in common?

They have all entered the ‘Membership Economy’, recognizing the advantage of forging long-term relationships with customers over simple one-time transactions.

As an association, you can pat yourself on the back, because you’re well ahead of this curve. However, as private sector companies gain consciousness of the value of membership, increased competition is on the horizon for you.

We’ve already seen it happen with companies like LinkedIn, whose platform effectively undermined the networking value of many professional associations.

This is why we have chosen The Membership Economy, by Robbie Baxter, as our current book club selection. It is a push to consider the place of your association within the ever expanding market, and to provide tips on how to grab a bigger share of it.

The book is geared toward several stakeholders, so we asked Robbie to tell us why her book is an important read for association professionals.

Why is this book relevant to association industry professionals?

In the book, I explore the specific tactics and technologies that organizations can apply to support long-term formal relationships with members. While associations apply some of them, in many cases, they are not taking advantage of best practices in areas like on-boarding of new members, pricing strategy (including the use of freemium models) and aggressively applying new technologies to extend the infrastructure that enables trusted relationships.

Associations have some unique advantages, including existing relationships with members, strong objective brands and in some cases regulatory or structural support for membership. However, many confuse inertia with loyalty and listen too much to existing members who may not have goals aligned with the new members that will drive the future health of the organization.

By applying principles of the Membership Economy, associations can build forever transactions with members, while creating a virtuous cycle for attracting and retaining new members.

Do you think this new private sector consciousness of the value of membership poses a threat to associations?

Yes. Virtually every organization wants to have a long-term formal relationship with the people they serve. And those consumers don’t have time and bandwidth to participate in a meaningful way with all of them. Even as associations claim that “Millenials aren’t joiners” and “Our members can’t afford our fees” we are seeing the same individuals spend more with for-profit organizations, many of whom provide value historically provided by the associations. LinkedIn replaces membership directories. Everyone from Accounting Firms to Pharmaceutical Companies to Software Manufacturers are offering continuing education courses and curated content—historically the purview of associations.

Google and public libraries share a mission—to provide free access to information for all of the world’s people. Libraries do it with books and buildings. Google does it with search algorithms. Same mission, but radically different approaches. Your competition may not be coming from the usual suspects.

In the introduction of your book you encourage skipping around depending on what is most relevant to you. Which sections would you recommend for association professionals to read?

  • Section 1 sets up the background for what the Membership Economy is, and why it’s happening now—you don’t need to read that unless you really want context for understanding how this is part of a massive trend.

  • Section 2 walks you through the 7 steps to the Membership Economy—these are tactics you can apply right now to strengthen your business model. I suggest you look at the titles of these, and pick the 2-3 tactics that seem most relevant to you.

  • Section 3 describes different types of organizations. While it’s tempting to direct you to the chapter on nonprofits, I would actually suggest that you read about a different category—maybe one of the two digital natives, either digital subscriptions (Chapter 11) or online communities (Chapter 12). Part of the power of the book is showing you how different types of organizations apply similar principles in radically different ways.

  • Section 4 talks about the primary times when organizations really benefit from focusing on how their model fits in the Membership Economy. Probably most relevant to long-standing associations would be the chapter on disruption (Chapter 21).


We recently invited Robbie Baxter to discuss the main lessons from her book. Click below to watch it: