'Tis that time of year when someone comes out with a major launch relating to the "best IM strategy in existence": making continuity income through membership sites.
First let me say I don't claim to know it all, nor do I have anything personally against any of the big-name trainers. I really don't.
My commitment is to two things: 1) helping real people get real results, and 2) reinforcing simple truths based on experience.
The big launches relating to starting a membership site will have you believe the following (taken directly from their sales pages, all of which are similar to the others):
"Membership sites are the easiest way to make a solid consistent income"
"You never have to look for more customers" (yes, the sales page actually says that)
"Continuity income allows you to work once and get paid over and over again"
"The 'Set it and Forget it' way of making money online"
Here's my point. As with everything else in this industry, all sorts of things are said to get you to buy the premise of what is being sold.
---> If you don't buy the premise you won't buy the product.
The problem is this: there are many exaggerations and inaccuracies in what is being shared with you.
So let's address the facts, ma'am.
1) Membership sites involve work - in many case A LOT of work
Anyone who has ever started and *successfully* run a membership site will tell you it's not a cake walk. Yes the continuity income is nice. But in order to keep that income consistent - and even to get it built up in the first place - really takes something.
One of the key things to remember is that customers are NOT inherently interested in paying for something on an ongoing basis. Think about it - if you had the choice would your default desire be to pay for something once or to keep paying for it over and over again?
Because of this customer expectations are often high with membership sites. Often this has to do with continuously providing more and more content, which can be fun but it's certainly a ton of work depending on the nature of the site and content.
My point is simply that membership sites are never a cake walk no matter how you slice it (pardon the pun ).
2) The attrition rate with most membership sites is high
This is a biggie and is rarely if ever discussed on a sales page nor highlighted enough in the training materials themselves.
The attrition rate - the rate at which customers cancel or fall out of the membership - is quite high with most membership sites. Why is this?
Well, truth is there are a ton of factors. Maybe the content wasn't good enough in their view, maybe there wasn't enough interaction, maybe the membership itself is not at all consistent with the premise under which they purchased in the first place.
Whatever the case, the idea that "you never have to look for more customers" in a membership model is complete and utter bunk.
On the contrary, to maintain a consistent and thriving income you ALWAYS need to be attracting new customers. That's because your existing customers will be dropping out at a much higher rate that you may think.
Sure, there are things you can do to offset this attrition and good courses will always cover this.
However the fundamental element of human nature will always be present - so regardless of what you do a certain attrition rate WILL exist. There's no getting around it.
3) A membership model is NOT a business model
This is the biggest thing to remember, and it's one that most are completely oblivious to seeing.
At its core, membership is simply a structure for product delivery and payment receiving. And that's all it is.
A membership model does NOT create what your business fundamentally is to your customers. Specifically:
- If you don't understand your target market, a membership model won't magically fix that
- If you don't provide something your target market WANTS, a membership model won't magically fix that
- If your training or information products are severely deficient, a membership model won't magically fix that
I can't emphasize this point enough. A membership model is only a structure. If your business is lacking the core fundamentals then it won't matter one lick what structure you are using.
The point is not to get seduced into thinking a membership model is the magic bullet that will solve all your problems.
Several years ago shortly after I first started marketing to real estate investors, I had this "great idea" to start a membership site for the industry. I too fell in love with the idea of "ongoing recurring income", because heck, who wouldn't want that?
I decided that my membership site would be filled with real estate articles, a forum, a killer knowledge base...all the same stuff that everyone says to put into a really good membership site.
I also decided I would make it "top notch" by having my web programmer build it from scratch. I spent close to $8,000 (yep, 8 grand) developing the site so it would be exactly the way I wanted it.
And I must say, it was damn impressive. It was miles better than anything else in the real estate industry and I was really proud of that.
But here was the problem: The customers didn't want to pay for a membership! And if I had opened my freakin' eyes rather than become completely seduced by the membership model, I would have seen it clear as day.
It was right in front of me. There were already several HUGE free forums people were flocking to in real estate, and there was no evidence whatsoever that existing customer behavior would have them paying for a membership site. None.
And guess what? They wouldn't pay for it. Gee, who'da thunk it?
So after (gulp) $8K spent and a couple months working that sucker to the bone, I folded it and moved on to something else based on actual evidence that customers WANTED it and were more than willing to pay for it. Within a couple months I was back up to a solid and growing 5 figure monthly income.
Here's the moral of the story:
Do not be seduced by strategy - membership or otherwise.
Focus on your underlying business model as well as providing what your customers want. If the strategy matches these things then move forward. If not, pass and don't think twice.
You'll be glad you did.