I am not a pushy parent, but . . .

publication date: Nov 27, 2009

Hi,

I am not a pushy parent, but . . .

OK, I do send my 6yr old son - Zac - to guitar and judo lessons . . . oh and chess & drama clubs, but that's only because he asked to go. Honest!

And I have resisted the temptation of trying to turn him into a mini-me entrepreneur. Even I admit it's a bit early for that. So I was a little surprised when Zac told me about his latest multi-level membership school 'project' . . .

At playtime, the entire school go out to the local square. Zac and his best friend Finn decided to create an imaginary cafe - the Leaf Cafe (later rechristened Leaf Bucks as a homage to the mighty Starbucks).

Anyhow, I believe there was an elaborate pile of leaves that marked out where the cafe boundary was. Zac and Finn then drummed up customers by serving 'coffees and pastries' (made of leaves mainly) as well as allowing children to play with leaves that had been molded into action figures (don't ask!).

But bear with me, this wasn't just some typical kids playing imaginary shop . . .

Turns out they had a tiered membership – where customers automatically became members. But then there were higher levels of membership which seem to given out to those who were first in and mainly to girls that Zac and Finn had crushes on.

And the whole project caught on quickly . . .

"We had 25 members - even the teachers came over and wanted to be members."

Nice work Zac. Yes, I was tempted to come up with a modest pricing structure he could have introduced, but bit my tongue.

Seriously, there's a deeply psychological reason why I think Zac membership café worked. If he had just opened an imaginary café and sold imaginary coffees and pastries it may have had some interest. But my guess is that pitching this as a 'membership' he unwittingly made the whole thing more attractive.

Think about any membership. What does that mean to you . . .

- A sense of belonging?
- Entitlement and privilege?
- Status
- Exclusivity?
- Unique benefits?

All of the above and more probably. Would a normal sales transaction have the same emotional power? I doubt it very much.

Where did Zac get the idea? After a bit of probing, I think he was inspired by Disney's http://www.clubpenguin.com/ - this is an MMOG (massively multiplayer online game) involving a virtual world that contains a range of online games and activities. Using cartoon penguins as avatars, players waddle around, chat, play minigames with one another in a snow-covered virtual world. Latest figures suggest Club Penguin had over 12 million user accounts.

While free memberships are available, revenue is predominantly raised through paid memberships (I think it was about $57.95 a year down to $5.95 per month), which allow players to access a range of additional features, such as the ability to purchase virtual clothing, furniture and "pets", also called puffles, for their penguins through the use of in-game currency.

And get this, the success of Club Penguin led to the original developers being bought out by Disney in 2007 for  $350 million, with an additional $350 million in target-related bonuses! Nice.

So the membership model really works – and it's not just for kids!

In my capacity as Chairman SIPA UK I went to the Online Summit last Thursday. In one session we had a presentation from Robin Crumby – Managing Director of Melcrum Marketing - a hugely success publisher to corporate communicators at some of the world's top multinationals. All very high-level stuff.

And he confirmed that they had seen a significant uplift in sales from simply repositioning their subscription offer into a membership offer.

So what happened to Zac and Finn's Leaf Bucks Café?

Of course, the fun couldn't last forever . . . our Health & Safety culture had to ruin the burgeoning enterprise. Apparently some kids were worried that the tree would fall over and cause untold damage, so boycotted the café. However I believe Zac and Finn are applying for all the relevant permits from the local authorities and hope to be back in business by 2015! ;-)

And finally . . .

Sad news for middle aged, middle class urbanites with children and
nothing to do at the weekends . . .

Just heard news that the Borders Bookstore group have gone into administration. If you haven't come across them before Borders is an American-style bookshop with a huge range of magazines, books, DVDs plus that all-important Starbucks concession!
 
Can't quite believe it – our local Borders is packed every weekend. I guess with Amazon beating down prices and squeezing margins for books, music and DVDs the high street would have to suffer. It happened with Virgin and Zazzi and most independent record shops for CDs. I guess bookstores were the next in line. 

So I shall probably be making one last homage to my beloved Borders this weekend.


Nick


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