Can a slide deck be turned into a blog post?
The other day I was invited to talk with a group of folks that were thinking about getting started in the membership space. They wanted to know what thoughts, tips, and insights I had about membership sites, and so I pulled these slides together for that talk.
Now, to be clear, this talk covers data and thoughts about the subscription business model, as well as a membership business. I've told you before, not to get them confused.
I started by highlighting that virtually every subscription or membership solution today needs to support more than one subscription option.
Following that declaration, I showed them the rates for physical subscription (like box subscriptions – makeup or clothing, for example) sites to have both monthly and yearly plans.
It turns out that digital service subscriptions (including SaaS products) have an even higher rate of supporting multiple plans (monthly and yearly).
This is critical when you're selecting a platform – because you have to know that it can support different payment plans. It's also important that your platform support one-time options along with subscription solutions.
In the media world, we all know about one-time payments for stuff like Pay Per View. But even if I'm running a subscription service for socks, I may want to come back and order another single pair, just because. It brings customers back!
Then we moved on to talking about bringing customers in, in the first place. It was the perfect time to start talking about free trials. They work. And the question everyone asks is how long should they be. The answer? About 2 weeks is the standard.
And the data point that often surprises folks is that free trials convert better for monthly plans than for annual plans – and this data is across multiple industries.
You can't talk about membership sites with monthly or annual subscriptions without talking about attrition rates (or churn). So that's where we went next. Churn rates differ depending on the industry you're in (as you'll see below).
The biggest cost of attrition has to be in the fitness industry. One study put the cost of attrition at $6 billion (with a B), every. single. year. As I wrote in the slide, that's a LOT of money!
The same article highlighted a British research project that changed how a fitness organization did their onboarding. They had a control group that went thru the normal onboarding, and then they experimented with another group.
The results? Great onboarding raised retention by more than 75%!
By this point I mostly have an audience excited about building their own membership site, and that's when I have to highlight that it's still work. Serious work.
A different study of thousands of membership sites found that the larger majority spend anywhere from half to full time on their site.
For folks that aren't allergic to work, there's still room to build a membership site.
Can you make money, real money with a membership site? It comes down to members. If you have enough members, you can make money.
How much money? In a study of over 2,000 membership sites, almost half make over $100,000 a year. That's nothing to sneeze at. And the top 5% of those surveyed were making more than $1,000,000 a year.
The last thing I let folks know, and you who read this blog often already know this, my strong suggestion is to do more than build and run a membership site. It's to create more than a single revenue stream. Add the ability to book time for coaching.
Or better yet, add online courses. Did you miss my series?
- Who should build an online course
- How do come up with an idea for your online course
- How to structure your online course
- All the pre-requisites before you launch
- How do you price your online course
- The gear for recording your online course
- Which approach is best for selling courses – evergreen or launch?
- Your onboarding emails
Have questions? Need a presenter?
Want to ask me questions? You can always reach out via Clarity.
Need someone to speak at your event? You know where to find me.
Oh, and one last thing… if you're thinking about getting into the membership business, make sure to follow me on Twitter for an upcoming announcement of something very cool that we're doing at Nexcess.