Parsons Can Take Companies from Subscription to Membership Model

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Kelly Parsons is the CEO of OpsCat, and the former CEO of Melcrum. On Tuesday afternoon, June 6, at the SIPA Annual 2017 Conference in Washington, D.C., she will present a session with Robin Crumby, co-founder of Melcrum and Novatum Group.

Their presentation, Competing on the Curve, captures the stories and insights behind Melcrum's transformation from a subscription to a membership model. Bringing together the different perspectives of a founder and hired-gun CEO, this session promises to bring to the surface both the challenges and ultimate rewards of business model transformation.

We get a preview from Parsons in this Q&A: 

SIPA: What made you start OpsCat?
KELLY PARSONS: I started OpsCat with my husband after Melcrum was successfully sold. So many companies want to innovate and create new value for customers but don't know where to begin. I get excited about exploring the possibilities with them—helping leaders ask (and answer) the hard questions about what's next for their business. 

What will your focus be?
Business model transformation—that's a lot of what I did at Melcrum and the CEB. I'd like to work with both boards of directors and senior leadership teams. 

Does your husband do similar work?
No, he's a lot more fun than me. He's worked as a video game producer so he is quite the hit at our kids' Career Days at school! But seriously, the principles of gamification apply to organizational and employee behavior challenges, and his tech background helps us think outside the box in terms of what's possible. 

What was your role at Melcrum?
I was brought on to overhaul the products and develop new solutions for Melcrum's customers. I wore many hats while we built out the membership model: head of research, chief of strategy, and ultimately CEO. It was a wholesale repositioning and realignment of services to bring greater value for customers and shareholders.

How did you look at membership?
We defined membership by the depth of the relationship and our ability to solve our customers' problems. We went from having thousands of subscribers at $500 each to having a few hundred members at $30,000 or $50,000 each. It's a completely different business model, shifting from Individual to Enterprise sales and service. By the end of my time at Melcrum, we weren't even using the word member—we were partners with our customers in the truest sense of the word. That privileged and unbreakable position helped us constantly improve our product and service mix and cross-sell large in-house training engagements. All of this made us a much more attractive acquisition target. 

I'm sure it was not an easy transition.
No, if it was easy to do, everyone would be doing it. There are so many places where it almost got derailed and that's what we'll talk about in our session next week. Getting the strategy right was only the first step--culture eats strategy for breakfast, yes... but execution eats culture for lunch! Fortunately, Robin and Victoria Mellor [Melcrum's founders and co-owners] stayed the course. They had the vision and wherewithal to place a big bet on membership and it paid off. 

How would a company know if that model can work for them?
I'm not sure it's right for every organization; it does depend on their characteristics and capabilities. The biggest question is: Can you connect your strategy with customer needs that will allow for a richer relationship cycle? The benefit of establishing those deeper relationships can be smarter and better products, with customers helping you develop them. We'll probably talk less about our success and more about how hard it was—and then highlight the five or six places where things could have gone wrong. It definitely requires leadership, courage and a whole new set of capabilities. You need to think broadly about the skillsets and assets that you have and how far you can take them. 

I know from working in the association world that membership brings a whole new set of expectations.
Yes, there has to be an emphasis on understanding and delivering value in every interaction. Your goal is to overwhelm them with value—$50,000 is a big ask. You have to earn it every day in a million ways, and that requires the whole team to be customer-centric. 

Where specifically does your experience matter most?
I've been leading membership-based organizations for 15 years now. Before Melcrum I headed the Marketing Leadership Council, a $30M division of the Corporate Executive Board. They had a brilliant system for building memberships, and I learned a massive amount there. At the same time, their size and inflexibility hurt their ability to continuously innovate—I was able to do more of that in the smaller world of Melcrum. I think the model works, and I know how and where to apply it. I'm not a person you go to looking for more of the status quo—I will always ask the hard questions and push for positive change.

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Ronn Levine began his career as a reporter for The Washington Post and has won numerous writing and publications awards since. Most recently, he spent 12 years at the Newspaper Association of America covering a variety of topics before joining SIPA in 2009 and SIIA in 2013 as editorial director…