Issue #1 - March 5th, 2025
Written by Michael Gillespie
In this Issue:
Perspective: How to survive in the subscription economy while using membership to capitalize on its opportunity
Tactic: The simple personalization tweak that can increase your revenue by 15%
Outlook: Are members really willing to pay more? More on the payment trend I’m watching closely.
QUOTE OF THE WEEK
“We’re noticing that new members want to pay more up front. It’s an unexpected finding, but one that we’re actively exploring how to address successfully.”
Some Housekeeping…
Hey there. Welcome to the first issue of Operator - the (only) newsletter written exclusively for membership operators.
In case we haven’t met: I’m Michael and I lead Memberful’s Customer Success program and built Operator from the ground up with one goal in mind: Showing you how to grow your membership into the powerhouse business I know it can be.
Every Tuesday at 1PM EST I’ll send this newsletter that will include insights, perspectives and tactics proven to help grow your membership.
Each section below will contain links to the Operator Vault - where I’ll include strategic resources and cheat sheets you can use immediately to strengthen your membership offering.
I’ve built a successful business using Memberful. I’ve also spent thousands of hours helping other operators just like you grow their own membership businesses. So I’m going to use this newsletter as the vehicle to deliver everything I know and have learned about unlocking success - and most importantly, how you can replicate that success for yourself.
Now, on to our scheduled programming below…
PERSPECTIVE
Surviving the Subscription Economy
Is it possible to thrive in a world where everything has a subscription attached to it?
The average person has about 4.5 subscriptions on which they spend about $924 per year. As an operator, your target audience likely has even more than that, adding to the complexity of convincing your prospects to purchase from you. If we’re being honest, the last thing consumers want is another subscription. Which, on the surface, doesn’t sound good if you’re in the business of recurring payments.
I work with a lot of media brands, and I can tell you that in a world where subscription products dominate, there’s a glaring opportunity to not only differentiate your product, but message it from a stronger, more appealing position.
Let me explain…
Framing is Everything
Below is a real-world A/B test I ran with a client to better understand how consumers value specific website messaging for products with recurring payments attached to them.
The call-to-action for Test A described the product as a “subscription”. The purchase conversion rate was 1.7%.
The call-to-action for Test B described the same product as a “membership”. The purchase conversion rate was 5.8%.
That’s right. The term “membership” delivered a conversion rate that was 3.4 times higher than when the product was described as a “subscription”.
How you frame your product will determine the entire trajectory of your membership - from how you speak about it to how you administer it.
Membership is the Remedy
There is certainly some technical overlap between memberships and subscriptions. However, the term “membership” conveys the idea of closeness, community and/or access to something more exclusive. Many products framed purely as subscriptions cannot fully deliver on membership’s promise of closeness and exclusivity. And it’s that particular promise that proves to be the difference-maker when it comes to how your prospects are evaluating (and hopefully purchasing) your product - especially when it feels like everything is sold as a subscription.
Membership is the remedy to a sea of subscriptions. Maintaining membership-first messaging in your program will not only allow you to stand out, but deliver a long-term experience that’s memorable and personal for paying members.
📎 Resource: Membership Messaging Cheat Sheet
TACTIC
First Name Magic
The simple, common-sense tactic guaranteed to increase your revenue.
I’ll keep this one short, but let me ask you a question: If we were friends, would you address me by name?
The answer is obvious. However, I can tell you that only 40% of membership operators, on average, address members by their first name when sending member emails.
And here’s the secret: Operators who are consistently addressing members by their first name are seeing 18% higher revenue per member. Pretty incredible right?
I call it first name magic.
The fact is that members feel more connected when addressed personally - and as an operator you have multiple touchpoints available to you where you can execute on this tactic.
OUTLOOK
Membership Consumers are Tired.
Payment fatigue is real. But so is the solution.
We live in a subscription economy. And at every corner there’s a tangible reason for your members to stop paying you each month. But it’s not for the reasons you might imagine.
You see, membership consumers prove to be highly sensitive to payment frequency rather than the actual payment amount.
The Constant Reminder
If your membership has monthly-renewing members, those members are reminded twelve times per year that you’re charging them. Sure, they love your content. But when it comes to modifying discretionary purchasing habits, a consumer will first cut the expense that’s always the most top of mind.
If your product renews monthly, that means your recurring revenue is always closest to the chopping block. Unless your product carries a 100% satisfaction rate among all members all of the time, then you need to be thinking about a billing strategy that manages your revenue risk while serving members in the best way possible.
I’ve seen a fascinating trend emerge during the prior year: An increasing number of members want to pay once per year rather than each month.
Why is this?
Subscription fatigue is on the rise - and the clients I work with are rapidly adjusting their offerings to deliver more value over longer periods of time through plans that renew less often.
The best-performing plans in terms of churn rate are quarterly and annual plans. Such plans often see churn rates that are 12-18% lower than monthly-renewing plans.
Check out the link below to explore renewal/billing strategies for your membership to help manage the risk to your revenue.
📌 Resource: Renewal Frequency Guide
IN CLOSING
Here’s a link to all resources I’ve mentioned in this email.
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See you next week.