AGB 2020.2 - Vail Resorts (MTN)
Membership Model + Scarcity of Assets = Increasing Recurring Revenues
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Vail Resorts
There are three hallmarks of a great membership program.
The value to members continues to increase every year, resulting in low cancellation/high renewal rates.
Members are encouraged to spend more time with the service or purchase more inside the ecosystem.
The membership program is able to leverage incremental data to improve its ability to market/service its members.
A gym membership is not a great program. The value to members doesn’t increase over time and interestingly there is a small reverse network effect, where each incremental member actually detracts from the value to all existing members. Gyms are in the business of selling memberships but hoping that members don’t use their service.
As counter examples, Amazon Prime and Netflix are great membership programs. Prime members get more value every time Amazon adds new features (Prime video, Twitch Prime, Prime Now, Prime Music) at no additional cost.…