Applying the Membership Economy to Managed Services

Author: Eric Anthony, director, MSP community and partner enablement, Egnyte

I know many MSPs who make it a point to call their customers clients. They do this for good reason.  It reflects a different level of professional relationship than a spontaneous, transactional encounter. What if we think of clients as members?

I fully recommend “The Membership Economy” by Robbie Kellman Baxter for anyone in business (and it is not just because several pages are dedicated to Egnyte). It provides a great understanding of why subscription-based services, when delivered as a “membership”, enhance the loyalty and lifetime value of a client. The difference between a subscription and a membership is how the client feels about the relationship. As human beings we like to “belong”. Treating clients as members can trigger the feeling of belonging and therefore drive affinity to your brand and services.

You have probably already drawn some images in your mind of how this works. For managed clients this is easily seen as they are already on a subscription model. So, what do we need to make them members?

  1. Provide community – Build an online destination for clients to gather and share. This can be on LinkedIn or Facebook in the form of private groups, or you can build your own. The advantage of building your own is that you have more control over it than using a social media site. This community should be a place where you, your employees, and clients can post announcements, ask questions (polls), and provide answers. Some examples would be posting updates on new compliance regulations or threats. Anything that might affect their business.
  2. Engage often – The community mentioned above will help with this but in the case of IT services it often needs to be specific to an individual client. Many of you are already doing this in the form of QBRs or whatever you call them. Be intentional, listen to what they are saying, and then provide solutions to meet their needs.
  3. Ask for feedback – You must know how your members feel as much as possible. With every ticket, ask for feedback and react to negative responses quickly. You can also ask for feedback in your community or in periodic surveys. In aggregate, this feedback data can be used to measure and improve your overall service delivery with your clients.
  4. Make membership fun – Gamify your relationship with not only the business owner but their employees as well. Give away swag or gift cards to incentivize how you want them to behave. You can do this for anything from providing referrals to giving feedback on closed tickets. Hold events with groups of clients (think different tiers here), lunches for smaller clients and/or dinners for larger clients.

Are you ready for something radical?  What if there was a FREE version of membership for your clients? This will not apply to fully managed providers who do zero break/fix. If we think about how many of you get managed clients organically, it is because they called you for a break/fix engagement first. What if we intentionally made them free members? You have already engaged with them, you have their information, and hopefully the engagement went well, and you fixed the problem.

Instead of dropping them into some drip marketing campaign, give them access to your community, invite them to lunch and learns, and provide them with valuable content that you are already creating for your subscription clients. Give them that sense of belonging that will drive affinity. At the very least, you should be able to stay top-of-mind for when the next emergency happens. The value of bringing them into the community is the social proof provided by your subscription clients. They may also aspire to become one of your subscription clients when they feel that there is a higher level to achieve. This is especially true when those higher levels include perks like appreciation dinners and rewards for certain actions. If all this just sounds like marketing, you are right. The end goal of the freemium model is to build affinity until the point where you convert them to a paying member. It does that in a way that leverages both your ability to provide valuable expertise and their natural desire to belong.

In her book, Baxter shares the psychology and the sociology behind why the membership economy is so powerful. She also provides practical advice on how to leverage membership in your business model. Because managed services is already a subscription model it lends itself easily to these membership practices. It also depends on building good relationships with clients. Membership can help foster those relationships and a freemium model can help build those relationships before they become a subscriber of your services.

Guest blog courtesy of Egnyte. Read more Egnyte guest blogs here. Regularly contributed guest blogs are part of ChannelE2E’s sponsorship program.

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