Marketing Communications Today Blog

Memberships, subscriptions, loyalty programs—relationship marketing models of all sorts—have long been a staple of the marketing toolbox. But why is Peloton in such deep trouble right now? And Noom postponed its IPO? Join us as Mark DiMassimo explains what’s really going on, and how we can fix the apparent problem with membership marketing today. Spoiler alert: It’s not the model itself, you’ll be happy to know. Tune in for Mark’s advice on how to motivate customers to “start, stick and stay.”

Cyndi Greenglass: What's going on with subscription and membership models?

Mark DiMassimo: There’s good news and bad news. The good news comes out of the context of a very difficult marketplace for folks. There are a lot of folks out in Silicon Valley working through marketing technology and media technology that are changing that stuff so fast that people are being driven over the edge.  Netflix literally says, our strategy is to compete with your sleep. What's legitimately happened in the marketplace is that people want to have more sense of agency and control over their lives. Products alone don't help enough. Memberships, true relationships with continuity go deeper, and they can help more. There's a really good market-based, consumer-based, person-based reason why memberships and subscriptions have been taking off. The dark side is that any human social truth is going to also become a cause. What happened is that the investors saw in subscriptions and memberships ongoing, predictable revenue. They started to value the profits and revenue of subscription companies at a much higher multiple than other companies. They kept bidding up the prices of these companies, which you know predictably drove, especially the leaders right over the edge. The only way to keep up with them was to start to do bad business and take the head risk. The leadership of the company has to choose between looking worse to the money - the people who give them loans and investments - by being moderate in a moderate environment, or by taking the huge risks of following the money.

The uber-networker David Berkowitz answers our burning questions about search marketing and where it’s headed. Learn why paid search advertising is growing so quickly (hint: the proliferation of small screens is a factor). And what marketers should be doing to maximize this powerful tool. David has been predicting trends in this field long before most of us, and in this episode, he gives us the skinny.

Ruth Stevens: How are you seeing the balance between organic and paid search?

David Berkowitz: Well, one of the biggest things that's changed, and this has been changing quite a bit over the past five or ten years, but it just looks more and more visible every time you go into Google is Google gives more and more prominence to answers which include ads. Google wants to give you what you want. Back when I started out in working with I SEO firms in 2004, there was a lot of focus on how to rank on the first three pages of Google. Two things have happened with that one is that if you're not on the first page, you're essentially invisible for any search. The second is there isn't even such a concept of pages anymore, because you have these tiny mobile screens. There's very little real estate to see results, and far less patience. You have to be on top or close to it or you are basically not there. That means that Google continues to be able to sell the importance of paid search to make sure you’re on that first screen.