Build a Subscription Model So Compelling, Your Customers Will Never Want to Leave with Robbie Baxter

0:01Light that spark fire nation JLD here and welcome to entrepreneurs on fire the only daily show interviewing the world's top entrepreneurs seven days a week. Today, we'll be breaking down how to build a subscription model so compelling your customers will never want to leave. To drop these value bonds, I brought to Robbie Baxter and the EO Fire Studios. Robbie is the world's leading expert on subscription and mentorship models. She wrote two bestselling books, The Mentorship Economy and The Forever Transaction. She hosts the podcast Subscription Stories and has advised organizations like Netflix, Microsoft, and The Wall Street Journal.

0:34And today, we're going to talk about subscription and membership models, why they're so popular, a real world example of how to launch one and oh, so much more. And a big thank you for sponsoring today's episode goes to Robbie and our sponsors. Here's something most of us don't think about until it's a problem, our phone service. Cape is a privacy first mobile carrier built from the ground up with security as the priority. If you care about protecting your digital life without giving up your smartphone, Cape makes that possible. Visit cape.co forward slash fire and use code FIRE for 33 % off CAPE for six months today.

1:08Are you ready for the ultimate all-in-one platform for entrepreneurs, marketers, coaches, and agencies? Build funnels, automate follow-ups, manage clients, and even white label your own software. Say hello to our featured partner, High Level, and visit highlevelfire.com to start your free trial today. Robby, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. What's up, Fire Nation? Something that I have learned that I think is somewhat controversial, but I believe it to be true, is that following your bliss is overrated. Sometimes if you're trying to be professionally successful, there's only so many yoga instructors, so many cookie bakers that the world can support.

2:07And if that's your dream, go for it. But if you don't have that one thing that's burning in you, you're much better off looking for a problem that needs a solution than just doing what seems fun in the moment. might seem a little harsh to hear that fire nation, but it could end up being the best advice you have because at the end of the day, man, if you can provide the number one solution to a real problem in this world, that can then give you the freedom to then go after your bliss on the free time that you have created because of your success. And there's honestly a lot of cases too, where people have turned their bliss and turned that into a job.

2:49And then that no longer becomes bliss. It actually becomes a job that's no longer enjoyable. And now you lose that bliss, you lose that passion. So, you know, proceed cautiously, basically, like there's there's definitely different ways to go about this. And we're gonna be talking about one right now today. And that's building a subscription model so compelling, your customers will never want to leave. So how did you become Robbie, the world's leading experts on subscription and membership models? My entrepreneurial journey started when I got laid off while I was on maternity leave with my second child, Annabelle, who is now 24.

3:28and I said I got to be in control of my own destiny. So I started consulting and I started by doing what I already knew how to do and what I knew that there was a need for, which was, you know, excellent advisory around marketing and business strategy for tech companies, which is what I'd been doing. But I knew pretty quickly that I needed to have a niche, an area of focus. And so I spent a couple of years just thinking about that. And, you know, my fifth client was Netflix, my fifth consulting client. At the time, they were a fast growing startup here in Silicon Valley in Northern California, where I live.

4:11And I started working with them on different acquisition strategies, pricing strategies, packaging strategies, fell in love with the business model. and as I was falling in love with it, a lot of other entrepreneurs were falling in love with it too. And I started getting calls saying, hey, I heard you worked with Netflix. We wanna do something like that. They didn't always have the words for it, but we love that recurring revenue. And we're wondering if you can help us apply that to our accounting software or our bicycle products or our dental pain management products, or just all kinds of wacky things people were asking for.

4:44And I started to see these patterns emerge about how organizations that had recurring revenue, what they were doing, what tactics could be shared across different industries and different company styles and structures, and what couldn't be. What was unique to the industry or to the corporate stage or what have you? And, you know, bit by bit, I became more and more convinced that subscriptions really drove massive transformation in businesses and ultimately that using a membership lens, a mindset that says, how would I treat my customers differently if I knew they belonged and they were going to stay with me for a long time?

5:31But doing that in almost any business could transform the business, provide more predictable revenue, more profitable revenue and a ton of awesome data to help plan for the future product roadmap for the future. And so I just kept investing in writing what I was seeing, teaching what I was seeing, ultimately writing two books and having a podcast on that topic that you've been kind enough to be a guest on. And yeah, now the whole world is finally catching up and seeing the power of subscription models and a membership mindset. But I guess the question is why? Like, why do you feel like subscription models are so darn popular?

6:17When they're done right for a consumer or a business customer as a subscriber, they get the confidence that their problem is being solved on an ongoing basis. It's kind of a set it and forget it relationship where ideally the company is focused on solving that problem for you and evolving the offering over time. And for the companies, it's even more obvious, which is recurring revenue gives you a higher multiple with investors. If you're trying to trying to sell your business or sell part of it in the public markets. And it makes it easier to manage the business if you have predictable cash flow.

6:57So there's benefits on both sides, although I would say that increasingly we're seeing subscription fatigue on the side of the subscribers when they feel like the subscription pricing that they're being expected to pay does not justify their relationship. Now, we had you on EO Fire 10 years ago, and let's be honest, the world of subscriptions has changed a lot since then. So what has transpired over the past decade, you know, above and beyond this fatigue that you mentioned? So when I started talking about subscriptions before I even wrote my first book, I got a lot of responses from executives, entrepreneurs.

7:39They would say, well, subscriptions wouldn't work in my business because we make movies or subscriptions wouldn't work in my business because we, you know, make software or subscriptions wouldn't work in my business because we make cars. So early on, I was just trying to explain to people, give it a shot, take a look at it, consider how it can work. Somewhere, I would say, you know, between, let's call it 2015 and 2020, everybody got the memo and said, oh, man, subscription-based businesses are growing faster. They're more profitable. They're getting really great valuations. I should do this. And what I saw was almost every business in that period from the nail salon on the corner, all the way up to the biggest companies in the world had teams that were working on membership and subscription models, or we're debating it at the board level.

8:42So we went from almost nobody doing subscriptions to everybody doing subscriptions. And a lot of those people were doing subscriptions in ways that didn't align with customer centricity, with the customer value. And so you've got all these subscriptions out there now. This is where we are in 2025. Lots of subscriptions that aren't really working. I could say some of the reasons why they're not well designed, but they're not working. Companies have spent a lot of money on because it was a growth at all costs kind of period. And now we're kind of pulling back a little bit to efficient growth, profitable growth, and really taking a harder look at what kinds of models we're using and whether they're working at a unit level, unit economics makes sense.

9:34And when you look at the business as a whole. Fire Nation, we are talking to an individual, again, as I mentioned in the introduction, I mean, she has advised organizations like Netflix, Microsoft, the Wall Street Journal. So we're going to be talking about this topic and more when we get back from thanking our sponsors. One of the most important touch points every customer has with you is your website. So stop waiting on engineers and designers to make every small change. Companies from early stage startups to Fortune 500s are turning to Framer, the website builder that turns your.com from a formality into a tool for growth.

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13:06So visit highlevelfire.com to start your free trial and see why thousands of businesses are switching. That's highlevelfire.com, where marketing, sales, and automation finally come together. High Level, join the revolution. So Robbie, we're back. And one thing my audience loves is going through a real world example. And in this case, how about a real world example of launching a subscription model? What that looks like? So let's say you sell supplements of some sort, but you really are passionate about helping improve people's health. So the first thing you do if you're a going concern, so you already have customers, is you try to understand what brought your customers to you in the first place and what is the bigger problem that they're trying to solve on an ongoing basis.

13:54So you're always looking for the goal that your customers are trying to achieve or the problem they're trying to solve that is ongoing. If it's a one-time thing, like, you know, I want to lose weight for my wedding and then I'm done. That's probably not ideal for a subscription, but if it's, I want to improve my health so that I can live longer, live better, and enjoy my life more. That's a forever promise that you can make. From there, you want to look at what you can offer them in a way to more fully solve the problem. So instead of requiring them to come and buy different supplements from you or figure out what they need, you can start to package it in a way that makes sense.

14:40So a lot of times I have my clients look at who are my best customers that would want a subscription, that want to have a deeper relationship. And what would I do if I were more fully solving their problem? And a good, a good way to think about this is what would you do if your brother was a client or your mother, right? There's a, there's a great book that Jeannie Bliss wrote called, would you do that to your mother? It's a great rule, a great principle for designing a subscription offering. You look at that best customer and you say, what is it? What else can I offer? And you start to realize all these other things that you can offer.

15:17And it's usually in three areas, content, commerce, community. So if you're a supplement seller, right, you already have some commerce, right? You're selling product. What might you be able to add in terms of content, right? Can you advise them on what other products they might need, even if you don't sell them? Can you advise them on their fitness regime? Can you advise them on better habits for sleep? Because your goal is ultimately around health and wellness and nutrition, right? Where would you go next? What kind of diet should they have beyond the supplements? That would be content. And then community.

15:55I've found that people often come to a vendor, to a company for the products or for the content, but they stay for the community. So you think about, well, if I'm bringing together all of these different customers and they're all trying to optimize their nutrition and maybe they all even have the same goal or the same problem, particular health condition or a particular health objective that brought them in the first place. Well, if I can connect them to each other under my umbrella and let them help and support each other and advise each other in addition to all the other stuff I'm offering in terms of products and content, that is tremendous value that they actually can't get anywhere else.

16:41So to bring it all home, you're trying to start your subscription. You sell supplements. Find your best customers. Figure out what brought them to you. and what goal they have, what ongoing problem they're hoping to solve that you're a small piece of. Determine how you can better package your current offerings to more fully solve that and reduce some of the stress and risk that they're facing. And then think about what additional features you can offer over time to fully solve that ongoing problem, leveraging content, commerce, and community. So you've given us a ton of great examples and recommendations and strategies about this whole process with subscriptions and these models.

17:27But what do watch viewers get wrong when it comes to building subscriptions? What advice do you have in that area? So the biggest thing that they get wrong is they take all the stuff they have and dump it into a subscription without optimizing the subscription for the for the buyer, both in terms of, you know, here's an example. Let's say that you have your your your supplement company, you're focused on nutrition. And let's say that you have supplements for nursing moms, you have supplements for elite athletes, and you have supplements to help you with aging. Right. And you say, well, we have all these supplements.

18:03we're going to say that if you're a subscriber, you get all the supplements. Now, that's a silly and extreme example. But if you apply this to, let's say, news, you know, or you apply it to content, right, you're giving people a lot of stuff, but it doesn't actually make sense for that one customer. They're better off if you had three subscriptions, let's say one for, you know, nursing mothers, one for elite athletes, and one for people who want to optimize for aging. So that's the first problem. Second thing, which is also related, is you just assume that because there's so much value in there that people will want it and you don't curate the journey for them.

18:44So in subscriptions, it's really important to think about how you onward a new subscriber to establish the habits that are going to get them the results that they came for so that they stay, right? So if it's the case of supplements, you want them to actually take their supplements. You might even want them to track how they feel or how they perform every day so that they can see the value. Because if they don't see the value, they'll cancel. So thinking about what do you do at onboarding? How do you set expectations and set habits? And then where do you intervene? What signals in terms of their behavior or their tenure with you might give you a clue that they're not happy?

19:27Because there's a lag time between the time that somebody mentally checks out from your subscription and the time they actually get around to canceling. And you need to, the closer you are to the moment when they're checking out, the more likely it is you can win them back. If you only try to win back people after they tell you they want to cancel, you're leaving a lot of money on the table and you're also making a lot of unhappy ex-customers who then say maybe bad things about your business. I mean, this is great advice, Fire Nation. I hope you're taking notes. And if you weren't able to take a ton of notes, don't worry because we're going to talk right now about Robbie's second book, The Forever Transaction.

20:10So Robbie, tell us a little bit about this book, Where Fire Nation Can Get It, and then we'll say goodbye. So I wrote Fire Nation. I wrote Fire Nation. I wrote The Forever Transaction five years after my first book, The Membership Economy, came out because in the first book, I was trying to convince people to give subscriptions a chance. And five years later, as I said, you know, a lot of people were doing subscription, but doing it badly. So Forever Transaction is a playbook. It's a step-by-step how to build your subscription. And so if you are thinking about this model and you want to, you know, either launch your subscription, scale something that's working, or even you have a subscription and it's just not working as you'd hoped or as it used to work, this book really breaks down how to make your subscription model sing.

21:08And you can get it almost anywhere that books are sold. You know, the big vendors, but also at your local bookstores. Fire Nation, you're the average. Of the five people you spend the most time with, you've been hanging out with RB and JLD today. So keep up that heat. And for links to everything we talked about, visit eofire.com. Just type Robbie in the search bar and the show notes page will pop right up. And again, the book is The Forever Transaction. Robbie, thank you for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you and we'll catch you on the flip side.

21:43Thanks so much. Hey, Fire Nation, a huge thank you to our sponsors and Robbie for sponsoring today's episode. And Fire Nation, what can 4 ,000 of the world's most successful entrepreneurs teach you? How about how to achieve financial freedom and fulfillment? My first traditionally published book, The Common Path to Uncommon Success, is a revolutionary 17-step roadmap that will lead you to the lifestyle you've been dreaming about. This book took me 10 years of accumulating the genius of the world's top entrepreneurs, and you can get it all in one place when you visit UncommonSuccessBook.com. I'll catch you there or on the flip side.

22:18Here's something most of us don't think about until it's a problem, our phone service. Cape is a privacy-first mobile carrier built from the ground up with security as the priority. If you care about protecting your digital life without giving up your smartphone, Cape makes that possible. Visit cape.co forward slash fire and use code fire for 33 % off Cape for six months today. Are you ready for the ultimate all-in-one platform for entrepreneurs, marketers, coaches, and agencies? Build funnels, automate follow-ups, manage clients, and even white-label your own software. Say hello to our featured partner, High Level, and visit highlevelfire.com to start your free trial today.