The Memberful Pulse - Q3 2022: Divergence

After consecutive quarters of uncertainty and negativity, Q3 marks a significant development for the medium-term outlook on the membership economy.

The membership economy has been experiencing one of its most challenging periods in recent history. Rising inflation, heightened uncertainty and an increasingly cautious consumer have been dominating trends throughout 2022. The downstream effects of these trends along with fierce volatility in financial markets have now trickled into virtually every industry.

Membership is no exception. And while 2022 revenue projections made during the membership boom of 2021 began to quickly feel out of reach throughout this year, membership operators have been forced to look closer than ever before at every facet of their overall strategy.

To put it simply: If you’re a membership operator, 2022 has relentlessly tested your conviction - over and over again.

Every narrative up to this point would have you believe that the remainder of 2022 will be overwhelmingly negative for membership and that we should be ready for a slowdown in every consumer sector, every market and every business.

Not so fast.

Looking for the moment

You see, in difficult markets and business landscapes we always look for signs, signals and evidence that a turning point is either near or upon us. And while we often don’t realize a turn has occurred until weeks and months after it happens, there’s one thing that always coincides with such turning points - a moment.

Q3 was precisely that moment.

It was a moment where membership operators saw extremely positive outcomes amid extremely negative sentiment. It was a moment where the silence was louder than the chaos. It was a moment where operators confirmed their product was so valuable that members simply refused to live without it.

It was a moment of divergence.

The biggest risk for membership operators during economic slowdowns is becoming too negative. Memberful customers who have remained committed and bullish on their business throughout this challenging year continued to build, prepare and plan for this moment - without knowing when it would occur. And now that Q3 is officially in the books, we’re able to look in the rear-view mirror and say with confidence that it is, in fact, occurring.

Uncertainty creates opportunity

Our customers’ memberships outperformed significantly in Q3. Across our portfolio, we’ve seen these memberships set new records for their revenue, retention and member counts. Staying the course and remaining non-reactive to larger narratives allowed our customers to take advantage of the upswing in membership we saw during Q3.

Sound management of overall membership strategy proves to be a driving factor of membership outcomes in challenging landscapes. We see the best payoffs occurring when operators choose to invest aggressively into their business during a downturn while leaning more conservative during periods of accelerated growth. This approach has enabled our customers to have the resources on-hand to invest into their businesses at opportune moments like the ones we saw during the first half of 2022.

Membership is a long game and customers who operate with that mindset find that external uncertainty and negative sentiment create long-term opportunities for sustainable membership growth.

As a membership operator, you simply can’t predict the timing of upswings like the one we saw in Q3 but you can plan for them.

The only guarantee you have is that moments like this will come when you least expect them too.

Keep building.