How to Make Money with a Membership Site
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May 1, 2018Recurring revenue - It’s the holy grail for many business owners.
Anyone who has felt the sting of instability that comes from selling “sold and done” products or services will appreciate the enormous value of having a stable, steady baseline of income, month after month.
When it comes to online business models, one of the best ways to establish a recurring revenue stream is by creating a paid membership website. In this article, I’m going to take you through the benefits of running an online membership site and a few tips you can follow to create, launch, and grow one of your own.
First Things First: What is a Membership Website?
Like a gym membership, in which you pay a monthly fee to use the gym’s resources, a membership site is a place where people can join to get whatever it is you offer. Many membership sites offer courses, articles or reports, video tutorials, webinars, checklists, templates, apps or software, and lots more. Members will typically pay an ongoing subscription to access it, providing the business with recurring revenue.
There are lots of great examples from educational websites with online courses right through to premium video websites like Netflix
Making a recurring income is certainly an attractive option but first let us look at both the pro's and con's of starting a membership site..
Pros of Building a Membership Site
1 - Generate a steady recurring income. If you have a monthly membership site and you’re able to retain a good percentage of your members, you can count on regular (recurring) income, as opposed to starting from $0 every month. For example, if you have 100 members paying $30 a month, you can, for the most part, count on $3,000 per month income, as long as you retain your membership numbers.
2 - Different tiers of membership. With a membership site you can offer different tiers of membership offering different content. So you could have a basic, regular and premium levels offering increased access to content or products for different amounts of money. This is a great way of making your content affordable and once members trust and value your content or service they will start to upgrade to more premium content.
3 - If you spend an hour with a client, you get paid once and that time is gone. Spend that hour creating material for your membership, and you’ve added permanent value to an asset that you’ll continue getting paid for over and over again.
4 - Build a loyal community. If you provide quality content, many of your loyal members will refer new members (you can even offer an affiliate program), and they’ll buy new products or services you offer.
5 - Membership sites are scalable. By adopting the one-to-many approach of a membership website, you can sell to thousands of customers without worrying about inventory and without needing to change your product. No matter how many users, they all experience your site in the same way.
6 - Can be automated. Depending on what you choose to do, you can turn your membership site into a passive income stream that delivers your content automatically. You can automate all of the payment and invoicing side so its literally a push button system.
7 - Create a hard to break need. if you are providing a service that hooks into and becomes part of your customer's businesses then you are more likely to retain those customers as once using your service it becomes harder to pack up and move somewhere else. A great example of this is email services like Get Response or Aweber.
Cons to Running a Membership Site
1 - Delivering value and creating content takes work. Members will only continue paying their subscriptions for as long as they’re getting value, and that means you need to show up and deliver on an ongoing basis, creating new content and interacting with your community. They’re paying regularly, so you need to deliver value regularly. Software and service membership sites are a bit more immune to this but if you are creating consumable content then you will need to keep refreshing and adding to what you've got.
2 - Hard to set up. While some memberships can be run through email, most top quality memberships are run online, which requires some tech know-how or money for tools and services to run it. This is where we can help!
3 - You will need to deal with customer service issues. If you’re accustomed to working with clients one on one or even selling one-off products, it’s easy to overlook the sort of customer service demands that come with running a membership community. This can be hard work but there are automated ways to help you deal with the support and community side.
How to Start a Membership Website
Membership (or subscription)-based businesses have many moving parts during the setup, but essentially, here’s what you need to do:
1 - Brainstorm membership business ideas.. Make a list of your talents, skills, interests, and experiences. Review the type of membership sites above for help in determining how what you know, love or do can fit into a membership model. For example, what can you teach? Have you created a great online tool you can sell as a subscription?
2 - Research your favourite idea to determine if there is a demand, as well as if the market is willing and able to pay for it. . There are many ideas that the market will say they love, but they might not like it enough to pay for it, or what they’re willing to pay might not be profitable for you.
3 - Plan your membership program. Decide what you’re going to offer, how and when you’ll offer it, and membership term length. For example, what content will you offer and will it be delivered in PDF, video, or some other method? Many membership sites offer a variety of content delivery methods to make sure they hit all learning styles. Further, will you deliver your content weekly through email or will you have an online membership? If it’s online, will new content is added monthly or will all the content be available at the time of joining? Finally, how long will memberships last? Depending on the content you offer, an end-date might be evident, such as a course. Other membership sites may go on indefinitely until your member decides to leave. Just remember, that indefinite month-to-month memberships will require you to offer new content on a regular basis to retain existing members. That means you’ll need to have a topic that you can add content indefinitely, and be willing to commit to long term content creation.
4 - Price your membership program. You will need to know how much you’ll be spending one-time and ongoing to run your membership (i.e. email, web hosting, domain, platforms, etc). You’ll also want to consider the cost or your time and other expenses (i.e. hiring writers, editors, video editors etc). Finally, what is your content worth? Part of the worth comes in the quality of the information, and part from the quality of the delivery of the information. The final step is deciding if you’ll run your membership month-to-month, for longer term (i.e. a 6 or 12-month option), or indefinitely. You can offer a variety of both. For example, the month-to-month price can be $49, but a 6 months subscription is $235, which is 20 percent less than paying $49 for six months. This gives you more money upfront, and a longer time to build trust and loyalty from the member. We advise to outsource all the tech/setup side. Yes it costs more up front but in terms of getting up and running it will save you an awful lot of time from which you can focus on your content.
5 - Create your content. Once you have your membership site outlined, it’s time to create the content and tools you’ll be delivering. This will probably be the most time consuming part of your start up. However, if you plan to deliver your content over time (i.e. weekly or monthly), you can create your content as you go. Just remember, that people will be paying for this content, so there is an expectation that not only will the content be more in-depth than they’ll find for free online, but that the appearance of the content will be good quality as well.
6 - Build your membership site. This is quite often the hardest part in terms of over coming technical hurdles and build time all of which is at the expense of you doing what you do best, which is creating your content. We may be bias but we truly believe outsourcing this step will save you masses of time up front and over time.
7 - Market your membership site. This is where you’ll now spend the majority of your time and money (unless you’re still creating content). A membership site can be extremely profitable, but only if people join. There are a variety of ways to market a membership site. First you need to know your ideal customer (who is interested, willing, and able to buy?), and where you can find him. Next you need to find ways to entice him to your membership site. That can be through articles related to your topic, Facebook ads or other ads, social media, and more. Consider using a lead magnet and funnel system to capture potential members’ emails since most people don’t join on their first visit. Your lead magnet could be something that’s already inside your membership site. Or you can offer a free 7-day trial or $1 first month trial. Setting up free or lower cost trials can be tricky to set up but are well worth it. We'd also suggest looking at launch sites like AppSumo and Product Hunt to inject an initial volume of people and to create some buzz around what you are doing. There is a bit of set up to configure your site to deal with an AppSumo launch but on average they can send 2000 customers your way.
8 - Keep your membership site active. Make sure your content is up-to-date and providing value to your members. Always be working to increase membership and replace members who drop out. Consider having a community aspect to your membership, to keep members engaged with you and others in the community.
