The LIES about Continuity and Membership income

[Ken Preuss]

Indeed, I've learned a TON from the stuff shared on this thread.

The promises seen with membership & continuity models are bold - and they can certainly be amazing when done effectively.

Thankfully a lot of folks have chimed in and gotten specific with ways to have them be truly effective. Much appreciated.

Ken

[joerh]

For those that are doing a continuity program that includes monthly newsletter, video training, audio series, etc., what have you found to be the best way to deliver the material? Are you sending them a link in an email that sends them to a hidden page to view or download from or are you sending them a physical product in the mail? What are your reasons for doing one or the other (cost, attrition rates, perceived value, theft, etc.)?

Thanks for your help,
Joe

[Richard HAN]

Originally Posted by dv8

I forget where I heard it, but I heard of a site some guy had that was only $5 a month. He had over 6,000 members. Over 2,000 of them haven't logged into the site in over 2 years.

So this guy is making between $30-$40K every month and a good portion of his members don't even use the site.

His membership fee is so cheap that, as you said, people don't feel like going through the effort to cancel.

I guess you're referring to The Business Fastlane.

[lpstoops]

Originally Posted by joerh

For those that are doing a continuity program that includes monthly newsletter, video training, audio series, etc., what have you found to be the best way to deliver the material? Are you sending them a link in an email that sends them to a hidden page to view or download from or are you sending them a physical product in the mail? What are your reasons for doing one or the other (cost, attrition rates, perceived value, theft, etc.)?

Thanks for your help,
Joe

From personal experience, I believe it depends first of all on the value of the membership your distributing. Then, what are the goods your distributing? If I'm working on a continuity site that sells month templates, scripts or themes, I typically go through my DVD distributor and mail everything.

Here are my reasons:

1. It's more expensive for my members to purchase monthly templates etc. and the value they are recieving is high enough I can justify the security measure of spending a bit more on distribution. We're talking about $3 for each DVD mailed. Remember, I'm getting between $87-97 for each member, so there's little loss in profit for me.

2. If there's lots of graphics or videos, it's a lot more bandwidth from my server = more monthly expenses.

3. People like to get stuff in the mail. Some may argue there's an immediate gratification complex in our culture (true), but most will never use what they download. If they have delayed gratification many are more likely to remain active and use their investments. And, everyone likes getting a package once in a while.

I hope this helps you joerh!

[Sean Hoffman]

It should be known that all niche markets will eventually get flooded and nobody will want to buy your information anymore.

[Eric Louviere]

Originally Posted by SEOSuperGuide

It should be known that all niche markets will eventually get flooded and nobody will want to buy your information anymore.

Nice lack, gloom-and-doom attitude there Einstein...

Luckily, you're as wrong as can be.

People will always buy information.

And, luckily, some of us are better at driving traffic than 99% of those competitors that'll flood the market as you say. AND, luckily, some of us are damn good copywriters (or have the ability to hire damn good copywriters) to persuade people to continue to buy stuff.

I guess Google, Yahoo, etc should listen to you though, because all those billions of dollars worth of advertising online could shrivel up and die a miserable death.

But, luckily, people are people, always have been and always will be. And, people bought how to lose weight information and products 200 years ago, and will continue to buy the same 200 years from now.

...Same with all kinds of other rabid and passionate niches.

So, go forth big SEO stud. Make your mark. Claim your fortune. Sell stuff. It's ok. It does not hurt.

Whatever...

Eric

[lpstoops]

Originally Posted by Eric Louviere

Nice lack, gloom-and-doom attitude there Einstein...

Luckily, you're as wrong as can be.

People will always buy information.

And, luckily, some of us are better at driving traffic than 99% of those competitors that'll flood the market as you say. AND, luckily, some of us are damn good copywriters (or have the ability to hire damn good copywriters) to persuade people to continue to buy stuff.

I guess Google, Yahoo, etc should listen to you though, because all those billions of dollars worth of advertising online could shrivel up and die a miserable death.

But, luckily, people are people, always have been and always will be. And, people bought how to lose weight information and products 200 years ago, and will continue to buy the same 200 years from now.

...Same with all kinds of other rabid and passionate niches.

So, go forth big SEO stud. Make your mark. Claim your fortune. Sell stuff. It's ok. It does not hurt.

Whatever...

Eric

HAHAHAHAHAHAHA, eloquent rebuttal.

Couldn't agree with you more. Niche's don't shrivel up and die....marketers do. I've said in another thread, success is dependent upon action alone. If you waffle out of your action you'll never find success. Determination and stamina will aid you, not an attitude like SEOsuper..

[Eric Louviere]

Right on Johnathan

[RC7000]

I'm starting a membership website after reading some of Ryan Deiss's stuff. Some of the advice here has been great. After working out ways you outsource most of the work I'll be happy with 250 customers at $9.99.

[RC7000]

Hi,

I purchased Ryan Deiss '30 Days to $10K'. It's okay, doesn't have everything I need to get started but it has given me ideas. He has new stuff out but I haven't looked into that.

[J.Knight]

This thread should be on the 'Warrior Wall of Fame' for a thread with real value.

The objections and solutions raised have altered my thinking on membership sites.

Thank you all!

JK

[ryanleedotcom]

Ok, gotta chime in on this one.

There are essentially two types of membership sites. The full community sites, where there is always new content added and active forums.

These are the types of sites I've built and have had members stick with them for up to 6 years (an example is the recently renamed: StrengthCoach.com and PersonalTrainerU.com)

With these type of sites, it can be summed up with one phrase "people COME for the content - but they STAY for the community".

There are also membership sites that I call "MicroMemberships". The content is delivered without interaction with your clients (no forums). This is usually with more evergreeen content like weight loss.

Both can and do work.

But like a house built on a shaky foundation, the content MUST be solid so members will stick with it.

I also run physical monthly products (newsletter, audio cd, etc.) and those can also keep clients for a long time when great content is offered. I had one program run for over 3 years (I recently renamed it too).

The key is implementing some solid stick strategies like unannounced bonuses delivered at specific intervals. And live events to foster more member interaction.

A continuity program is most certainly a business model. It's a business model just like a health-club with membership-fees is a business model (although, health clubs DO NOT want you to come and use the club - that's the big difference).

Case in point...

Try and sell a web site with guaranteed monthly income (membership site) vs. a site with one product and zero guaranteed sales (typical ebook site). The people who shell out BIG money (7 and 8 figures) for these business want to see revenue, growth, etc.

I've had continuity programs online since 2001 and I can tell you, when done RIGHT (not as a get-rich quick scheme), they can provide you with substantial wealth.

Great conversation!
Ryan Lee
RecurringRevenueReport.com

[voiceofreason]

Hey there,

Wanted to add a few thoughts to this one. My first product many years back sold for about $1,000 as a one time purchase. I eventually made the change to a membership based model.

I'm now on my third member site. With that said, I made plenty of mistakes along the way that I had to learn from. Primarily:

- Yes, the site needs to be sticky. But I found that the BEST form of sticky is not in the site at all. If you host live training events such as webinars and teleseminars that are interactive in nature, and tease your members with what they're about to learn (And actually DELIVER what is promised) your retention rate will go through the roof. I still have over 65% of my same customer base from over 1 year ago.

- Make the site what THEY want, not what you want! I hosted 3 conference calls within my target niche that spent the whole time discussing with my core potential customer groups, what they wanted. See? No assumptions! I asked them what tehy wanted, and we discussed it FIRST, then I built the site.

- Keep the cost down. No really guys, depending on who your niche is, I made more money charging less than when I did charging about 30% more. Why? Bounced credit cards! Sure, plenty of people were willing to pay more, but I was losing plenty of money and time trying to follow up on bounced payments. I finally took the hint, dropped the monthly, and things were fine again. My income shot up the very next month due to payments actually going through. For me, staying under the magic $100 per month barrier makes a world of difference.

Of course, if you're targeting a high income bracket, this may not be an issue for you, but it's worth considering.

[tiger325]

I agree with previous posts ...membership sites take alot of work however it is more money in the long run

[Alice Seba]

Wild Bloom...it is "scarcity" how? I don't think anyone said you can't make money other ways. Out of all the quotes, mine taken out of context, is closest to saying that...but that is not what I meant.

You chose to side with Ken...obviously. Ken has an opinions and experience and so do we. But ours makes us ignorant & scarcity minded. Very curious.

Weird. Maybe the dictionary definition changed and I didn't get the memo.

[Keith Kogane]

For my $0.02, (and as someone who is noodling a membership site venture) a membership site is rarely going to be effective as the front end product, unless it's relatively cheap for something of massive value. The Stomper Net Effect launch was an example of this. You had the massively priced SEO course, which made the "continuity" or "membership" seem like tiny payments towards that huge perceived value.

But back to my point, looking at the classic info marketing funnel, something like a paid recurring membership belongs further down the chain, past even a higher priced premium product. I tend to think that in IM, once you've got a list of people who have bought your low price, mid price, high price products, they've indicated they just want to keep on giving your money. That's where the membership site belongs because it solves nearly all the problems of attrition, expectations, etc.

The same way the internet allows cheap interaction with an audience of prospects through the automation/duplication powers of computers, a membership/continuity program can maximize the profit potential of your loyalest customers though those same powers.

Now, you can probably get away with leading with a membership site in some markets, but as the OP pointed out, you're competing with every free, developed community out there.

However, if you follow the classic funnel and place a membership properly within it, it should work for any niche you can extract super-loyal buyers. With that positioning, you're no longer competing with every free source, because you're dealing with people who know, like and trust YOU as the exclusive source.

Make sense?

[FrankRumbauskas]

Money can certainly be made with membership sites but it's not easy. It's a LOT of work. Here's my experience with continuity products:

- For a while I had a monthly continuity product at $97/month that included a new DVD and two CDs each month. This went very well and I plan to return to this model after the new year.

- Wanting to reach more people, I digitized all of the content from that program, uploaded it to a membership site, and charged $19.97/month. This did not go well. People bitched all the time that "I signed in yesterday and it's all the same still today, where's the new stuff?"

- Finally I got sick of all the issues with running the membership site like high-maintenance customers, constantly creating new content that I could sell for much more as a one-time product, lots of chargebacks (people think you cancel by doing a chargeback and while they're at it they charge back the last 3 months too), etc etc.

So with that in mind I took all of the content and put it on a FREE membership/social network site (see #3 in my sig below). This has worked out VERY well for me as the perceived value is very very high and this has become a viral tool to promote my main product and continue building my list.

At this time I plan to keep the free site indefinitely, resume the $97/month physical continuity product, and maybe add a $29.97/month option with one CD and a newsletter.

[aboutalhah]

It was a long read...

I'll just talk about the retention rate here. If you give me something I want, I stay for year. If not, I'll go.

I think that the retention rate is directly related to the end result.

Why it doesn't work from some people? Simple, because the marketer REALLY needs to think like his customer, and even find what they need, but they don't know.

Some marketers are experts at this while other just don't get it. The members will quickly feel that they have nothing to do here and leave.

Franck.

[Tim_Carter]

LMAO.

So eloquently put.

I love the way you express what most of us are thinking.

So - do you do copy writing?

Originally Posted by Eric Louviere

Nice lack, gloom-and-doom attitude there Einstein...

Luckily, you're as wrong as can be.

People will always buy information.

And, luckily, some of us are better at driving traffic than 99% of those competitors that'll flood the market as you say. AND, luckily, some of us are damn good copywriters (or have the ability to hire damn good copywriters) to persuade people to continue to buy stuff.

I guess Google, Yahoo, etc should listen to you though, because all those billions of dollars worth of advertising online could shrivel up and die a miserable death.

But, luckily, people are people, always have been and always will be. And, people bought how to lose weight information and products 200 years ago, and will continue to buy the same 200 years from now.

...Same with all kinds of other rabid and passionate niches.

So, go forth big SEO stud. Make your mark. Claim your fortune. Sell stuff. It's ok. It does not hurt.

Whatever...

Eric

[Melody]

Don't overlook free membership sites as money producers either! With the right niche, and a good community script, they can be excellent income producers through affiliate programs, and Adsense, and generally build pretty fast with the right marketing.

I just sold one that was 18 months old, 5k members, for 35k - and it was producing a steady Adsense revenue, with virtually no time on my part and a total expense monthly of about $50. That's the third one I've flipped in the past year, and I have two more ready to roll out shortly - just after I get this mobile advertising launch finished.....

[Ken Preuss]

Originally Posted by aboutalhah

I'll just talk about the retention rate here. If you give me something I want, I stay for year. If not, I'll go.

I think that the retention rate is directly related to the end result.

Why it doesn't work from some people? Simple, because the marketer REALLY needs to think like his customer, and even find what they need, but they don't know.

Some marketers are experts at this while other just don't get it.

Franck

Spot on Franck. You've gotten to the core of what has a membership site ultimately succeed. Or ANY site for that matter.

Great post.

Ken Preuss

[Ben_Curtis]

LOL-my partner and I are working on a turnkey website membership program, and as always, warriors are giving me lots to think about.
We were thinking $15-20 monthly for the site, and a discount member area for ebooks relating to internet business. Ebooks for non-members available for regular price.
Thanks, all!

[ryanleedotcom]

RE: Drop-out.

People drop out of membership and continuity programs for all types of reasons.

Yes, one certainly is they have moved onto another interest. But in my experience, that is more the exception than the rule.

You can have the most butt-kicking program and community - but people always see the same thing differently.

For example, one person might drop out because there is "too much" information - and they feel overwhelmed. I know that is a reason I dropped out of one program recently.

Another reason is they feel the information now might be too "beginner". Which, by the way, is another reason to offer multiple membership sites, products and even levels of membership/coaching.

But no matter what type of continuity program you are running, the key is the customer must feel like it's a good VALUE. If you take a step back and really look at it from their perspective (instead of just how much $ you will make) and you try to provide killer content at a good value, you'll have loyal subscribers for years and years.

However, if you only provide crappy "turn-key" membership sites with generic content, then I believe everyone loses.

It's a different frame of mind. I'm not talking "get rich" quick programs, I'm talking long-term businesses that can last for many years.

Great discussions happening here.

Ryan Lee
RecurringRevenueReport.com

[Ken Preuss]

Originally Posted by ryanleedotcom

Another reason is they feel the information now might be too "beginner". Which, by the way, is another reason to offer multiple membership sites, products and even levels of membership/coaching.

The point you make here is critical. Especially in cases where there is information and training involved.

People need to be able to "move up", so if "the next level" doesn't exists and there's a one-size-fits-all approach, attrition will be high.

Great point Ryan.

Ken

[ryanleedotcom]

Hey Guys,

I've seen it happen so many times (the information becomes too beginner as your member advice and learn/apply what you teach them).

I made mistakes in the past by NOT offering different levels of membership.

My fix has been to offer more advanced "coaching" options and it was much easier to do (rather than just create more content online and have more confusion).

First, I did it by offering a physical product to compliment membership. It was double the price, but they also receive a CD in the mail with more advanced techniques.

Another tactic I used was to offer a group coaching program offered via bi-weekly teleseminar. Even with that group, people eventually wanted more access to me and more personalized information.

Now, I offer a high-end $9k per year mastermind coaching group.

One thing I'm in the process of implementing is a mid-range coaching group. More advanced than by $10/$20 per month programs, but not with the personal service of my $900/month mastermind. It will probably fall in the range of $200/$300 a month.

I'm glad to finally posting here and sharing at the Warrior Forum! Really cool sharing of ideas here.

Ryan

[Kyle Tully]

Originally Posted by sw

I definitely agree with your take on this subject. Membership sites are not easy and do require lots of maintenence and money to follow through. Very high customer turn over can have you back to square one in a matter of a few months. Its quite a risky undertaking that I feel most people may want to bypass on.

Ask anyone who's got my Overnight Membership Site training program if they think your statement is accurate

Membership sites and continuity programs are as easy or as hard as you want to make them.

Members expect what you tell them to expect.

[Sipboy3000]

I have been building membership sites using Wordpress and flipping them for a nice quick profit. The GURUS in this niche make this an easy way to make money for me.

I started selling mine because I found it rather difficult to manage them on a consistent basis.

I would argue that it is still a viable business model based on your interests and passion. I you are involved in a niche that you have a passion for, then you could easily make money because it would be fun for you.

However, if you are doing it strictly for money, you may run into some issues that will consume your time for more than you intended.

[lavaleekathy]

A great post Ken! Membership sites DO require a high level of maintenance and should be continously monitored to ensure satisfaction of your members and the health of your business. I think more and more business models are depending on membership automation services that may offer convenience to it is hosters, but it also lacks that personal touch with its members to ensure continual satisfaction. Great thread!

[Nathan Hangen]

I think continuity is a difficult to manage program...for instance I think Amy Bass offers a great program at too cheap of a price and as a result she's probably busting her ass trying to please people. Sorry Amy if I'm making false assumptions.

I also think that forced continuity is a flawed system. For instance, having continuity just for the sake of having it is lame. I don't think a product should be forced down people's throats in a continuity method.

Now, monthly newsletters, dvd's, and audio are a great way to do it. People like getting something in the mail and you aren't stuck "managing" the program. Coaching is a great continuity program, as is any kind of lifestyle maintenance niche, but otherwise continuity is a difficult model to use if you want to spend less time on the computer.

[laurelwachtel]

An informative post, and I get the gist of what you're saying... there's always going to be a new strategy getting attention throughout the internet marketing industry. I think its probably the best as I have seen others in the internet marketing industry generate six figure incomes per month with the simple use of a newsletter to subscribers. You can make the same amount of effort writing a newsletter for just 50 people than you can for 5000. An interesting perspective!

[marciayudkin]

a membership site offering two levels of "membership": beginner content and advance content. How would you implement that in a feasible fashion?

You can have a two-level membership program without having separate content. You can have the levels differ according to their ACCESS to the content or according to additional privileges/discounts.

For example, in my marketing mentorship program, Marketing for More, both Basic ($69/month) and Elite members ($99/month) get the same content. However, Elite members also get free recordings of any teleclasses they miss. This benefit alone keeps many of the members in the more expensive program.

Elite members (the more expensive level) also get steeper discounts on products and services as well as the right to have what I call Feedback Feasts (what others call hot seats) centered on their marketing dilemmas. The Basic members can attend Feedback Feasts but not request one. This privilege also keeps many of the members at the higher level.

And finally, a few members joined just to get a 50% off discount on press release distribution. They get this only with the higher level membership.

More than 3/4 of my members spring for the more expensive membership.

Marcia Yudkin

[onlinemoney00]

You have valid points, but there are certainly some things you can sell online that people will definitely continue 2 pay for