Create recurring revenue with a membershipMay 07, 2020
So many of us can’t imagine living without our memberships and subscriptions—think Disney+, HelloFresh meal kits and FabFitFun boxes. I know I wouldn’t maintain my sanity during quarantine without Netflix. On a related note, how much is too much Tiger King in a span of 24 hours? Asking for a friend ;)
While taking a break from TV last week, I attended three virtual workshops with membership guru Stu McLaren. These workshops opened my eyes to another way that small businesses can create recurring revenue with built-in resiliency during economic downturns and anything life may throw your way. Imagine having a predictable, stable revenue stream that has compounding sales from customers who purchase month after month. This is possible with a membership or subscription.
Today I'll share my key takeaways with you, and encourage you to consider adding a membership or subscription to your marketing mix—whether you own a bricks & mortar shop, coaching/consulting firm or service-based business.
Assess your business for membership potential
When assessing your business for membership potential, here are three questions you can ask yourself about whether your market is perfect for a membership:
- Does it address an ongoing problem? e.g. a baby who doesn’t sleep through the night.
- Are you teaching a skill? e.g. learning to play guitar.
- Does it create convenience? e.g. food box with easy recipes.
If you can answer “yes” to any of the above questions, a membership is likely a good fit for your business.
Decide your membership model
There are a variety of membership models—many of which you’ve likely purchased yourself, or have considered purchasing. Here’s a breakdown:
- Publisher: Put out regular content for people, with the intent to help members make progress and have a balance between learning and doing.
- UPS: Deliver a package of content on a regular basis e.g. package of lesson plans, package of Facebook ad templates.
- Coaching: Support members with implementing what they’ve learned from you (typically, after they complete your online course). This can come in the form of group coaching calls, support materials, live Q&A’s, etc.
- Modular / Drip: Release content little by little in bite-sized chunks. This content is typically laid out months in advance and is “dripped” to members as soon as they join, starting on Day 1 of your content.
- Community Membership: Offer a forum for members to share and navigate their common experience together.
- Combo: Offer a combination or hybrid of any of the above models e.g. publisher + community, coaching + community.
There are also Bonus Membership Models:
- VIP: Offer perks to “VIP members,” exclusive sneak peeks, front of line access, discounts, faster shipping e.g. Amazon Prime.
- Subscription Box: Send a physical box in the mail to subscribers, which contains a bundle of items in a box.
- Project of the Month: Combination of sending a physical kit, along with online instructions (combines physical + digital) e.g. calligraphy membership, knitting kit + tutorials online in the members portal.
Stu shared the reasons why memberships and subscriptions are still going strong, even during a global pandemic. Many of us think that people join a membership site because they want access to content or to a community. But there are actually four different reasons why they’re buying.
The 4 reasons why people buy a membership
- People want more from you: People want a way to follow-up with you or ask a question.
- People want less (they want to save time): People are feeling overwhelmed because there is so much free information readily available. They don’t want random info; they want the right info from the right source. People want info in a condensed, easy to access format.
- People want convenience and speed: People are willing to pay a premium for convenience e.g. homeschool lesson plans for teachers and/or parents.
- People want direction: People want help to cut through the clutter and make progress easier and faster. Tons of free information creates confusion in the marketplace; people don’t know what their next step is or should be. They want someone to help them focus on one thing.
Successful memberships take people from where they are to where they want to be, with a “measuring stick” that not only brings clarity and direction, but also helps with member retention. After you’ve mapped out members’ path of progression (Stu calls this the Success Path), use the milestone markers in the following ways:
- Marketing: Your messaging should focus on the progress. Contrast where they are now and where they want to be i.e. focus on closing the gap.
- Content: Your content should focus on helping people make progress—that should be the only reason you share content. Don’t fall into the trap that more is better; there needs to be balance between learning and doing. Rule of thumb: share no more than 60 minutes of content per week, so you don’t overwhelm members.
- Retention: Your focus on progress drives retention: people who stay month after month after month. Celebrate members’ progress and achieved milestones to remind them how far they’ve come.
When developing your content strategy, Stu emphasizes the importance of researching your market. Explore their external challenges and internal challenges:
- External challenges: What does your audience want? e.g. what would they search in Google to try to find a solution to their problem?
- Internal challenges: What keeps them up at night? e.g. what is the conversation that’s going on in their mind: what are they thinking and feeling? We need to know where they get stuck and help them keep moving forward to get results.
In my previous blog post, I shared my Ideal Customer Avatar worksheet (which you can download for free). Use this worksheet to identify your ideal customer avatar for your online business—whether it’s a membership, digital course or new product or service. When you’re crystal clear on your customer’s pain points, content creation becomes an easier task.
You may still question whether a membership or subscription is right for your business. Stu shares the common roadblocks that hold people back from starting a membership:
Common roadblocks to starting a membership
- People think they have a small audience (“small” would be considered less than 1,000 people across Facebook, Instagram and your email list). The natural tendency is to think you need to wait until you’ve built a bigger audience. BUT so much can happen in a short period of time and you don’t need a big audience to generate momentum. You will see higher conversions with a smaller audience because you can build deeper relationships.
- People are afraid of the “content treadmill.” Remember: when people join a membership, they’re not joining for content. People are joining for progress! The focus has to be a balance of learning and doing, to give members space to work with the content and implement it. Overwhelm is the #1 reason people cancel a membership. When you have a content strategy in place, you’ll be able to batch create content and schedule it way out in advance. e.g. create anticipation and excitement for the content that’s coming up, which boosts retention.
- People think they can’t do this if they’re not an expert. You can be a curator of information and serve your people. Get clear on how you can help your members and bring in the appropriate people who are experts on the things your members are getting stuck on.
- People feel like they’re in a market that has lots of free content. This is good news! Lots of free content means there’s a lot of confusion in the market; there’s conflicting advice. Free creates confusion and confusion creates opportunity. People pay for clarity: they are willing to pay someone to cut through the clutter for them. Your membership gives people the gift of clarity.
During a time when many small business owners are forced to pivot and find new ways of creating revenue while continuing to offer value to their customers, memberships and subscriptions may be the answer. If you’d like to bounce ideas on how a membership could work for your business, schedule a complimentary 30-minute call with me. In the meantime, you can find me here on my couch, binging on my favourite subscription—Netflix.
Keep shining bright!
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