Will $5 a month membership sites work?

47 replies
I have a business model of building $5 per month membership sites. I see a lot of potential in this. I think it could work in all sorts of niches. I plan to build email list in each niche and build a relationship with my list. Then I promote my $5 a month membership site via paypal. These people will not cancel because it's only $5 a month. Before you know it im making 10k a month Sound doable?
#membership #month #sites #work
  • Profile picture of the author DubDubDubDot
    Originally Posted by coreytucker View Post

    These people will not cancel because it's only $5 a month.
    That's where you are going to run into the trouble. They will cancel if you aren't delivering value much greater than $5, so you may as well charge higher than $5.
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  • Profile picture of the author dnovacek
    Selling a monthly membership at $5/month will certainly increase the possibility of folks being willing to take a chance on you. You lower that hurdle at the beginning of the relationship.

    HOWEVER... If I find that I'm not getting good quality for my 5 bucks, I'll drop you so fast it'll make your head spin!

    Just make sure you show your members a lot of love!
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  • Profile picture of the author coreytucker
    Of course I am going to give good quality. I have to have something that keeps them coming back. Something for them to look forward to. But don't you guys think this could work in almost any niche?
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    • Profile picture of the author dnovacek
      As long as the quality is good, I certainly think that could work in any niche. Especially, as I noted, since you're lowering that initial hurdle to only $5.00. Heck, I think I'd HAVE to sign up just to see what $5/month could give me!

      It's essentially like subscribing to a newsletter or small course, where they might charge that $60 up front - and there are people who just can't afford that. But I'd think that at $5/month if they're even a little bit interested in the niche they'd be willing to sign up and see how it goes.
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  • Profile picture of the author coreytucker
    Thanks dnovacek. Man its just so hard to build a email list. I am trying to use facebook ads but even thats a pain to get opt ins. But I think this could work well in hobby niches.
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  • Profile picture of the author Will Edwards
    It's really the wrong question. It doesn't matter how much or how little you charge. If you want people to pay you monthly, you have to be delivering something for which they are more than happy to pay the membership fee - simple as that. Then they will stay in regardless of the price of membership.

    Will
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  • Profile picture of the author coreytucker
    Thanks guys. I need an angle I guess. Something that is valuable and is not offered elsewhere in the niche.
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  • Profile picture of the author IMDealBox
    I guess you picked up that WSO about $5/month membership sites!

    You gotta be in a niche where people are not really intimate with Google Search!
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    • Profile picture of the author profitsforall
      Many,many years ago I remember hearing about someone who was raking in thousands a month from some monthly membership site - pretty sure it was the $5 price point.

      Then there was an issue with the merchant processing payments. He had to swap to a new merchant and found that he lost a massive percentage of his membership.

      It appears that $5 appearing on a credit card was low enough that they would think - I must remember to cancel that (and then forgot).

      As others have said - Regardless of pricepoint, if you provide more value than the cost of membership folks will stay subscribed.

      I am a member of two memberships at about $4 bucks a month in an online gaming niche. One I log in to everyday. The other I never logged in to.

      After months and months I finally got round to cancelling the one that didn't provide value.
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      • Profile picture of the author TerranceCharles
        Depends on how much you want to earn. Even $1 @ 1,000+ members can make you $1,000 a month (But realistically, less than that.) And, don't stop just on the membership fee, you still have up-sells, higher VIP memberships, sponsor advertising etc, so $5 is a good price point. Just make sure you deliver on the content, and consistently update, it's not easy - but, it's worth it
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      • Profile picture of the author SteveSki
        Of course it will work....

        The WSO someone mentioned is: http://www.warriorforum.com/warrior-...ever-seen.html

        Exactly a year ago I kinda put up a membership site but decided not to have a members area... the content is dripped out to members by my Aweber autoresponder (one new lesson each week) first month $29.95 then $10 per month.

        Haven't done any paid advertising, about the only thing I've done to actively promote it is a link in my Signature and it's now producing about $500 of monthly profit.

        Most people stick with it for 6 months (I only have 26 weekly lessons) so I really need to create more content and try testing some paid traffic sources.

        I purchased the above WSO a couple of months ago... It's a pretty good blueprint well worth the small investment but the OTO traffic/facebook upsell wasn't very good at all.

        Cheers,
        Steve
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  • Profile picture of the author Stevie C
    Well it could work but lets say for instance you have 10 membership site averaging around 200 members each at $5, so that's $5,000 a month and you've got to juggle 10 sites in 10 different niches, provide decent content and answer questions in each of those areas. Take away any costs involved in payment processing, etc and the sheer work you will need to do to keep on top of all these sites and market them it seems a lot of work. I would rather concentrate on building one membership site with a higher subscription fee but maybe I'm missing something?

    Edited cos my sums were out!
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    • Profile picture of the author TonyNorton
      Hi,

      So basically you're talking about a "breakage" model as Ryan Deiss refers to it.

      The idea being you get people in and the price point is low enough that most people don't worry about cancelling because the monthly hit isn't high enough to worry about it.

      I've had a couple membership sites in the past (no I'm not going to tell what they were) in the breakage model and I'll tell you that you should test prices. If your experience is anywhere near mine you'll see that there's no significant difference in both customer acquisition or retention up to about 20ish a month.

      After around 20$ the breakage model doesn't really work too well, but below 20 there's no real difference between say 17$ and 5 or 10$.

      So, I ask... if there's no real difference in how many people will sign up and no difference in how long they stick then why not get the extra (in your case) 15 bucks a month?

      Think of it like this... at $5/mo you need 2000 paying customers a month to net 10k but at 20/mo you only need 500 customers to net the same 10k.

      I don't know about you but 500 customers a month is a lot easier than 2000, and even if getting 2000 people to stick isn't a problem why would you purposely take 25% of the income you could otherwise have?

      In the end you have to test to see how it works in your market... but I suspect that if you do test you'll probably find results similar to mine.

      And before someone asks... No they weren't in the IM niche.

      Hope that helps.
      Tony
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      • Profile picture of the author Alexa Smith
        Banned
        Hi Corey,

        Please don't take this as a criticism, ok? I intend it helpfully. Will's post above (#8) is the one you need to keep re-reading, here, until it makes complete sense to you, because at the moment you're asking the wrong question, which arises from looking at it from a mistaken perspective.

        Trying to define the issue in these terms, and start from the premise that "it will work well if it's only a low price because most people won't care enough about the money to bother to cancel it" isn't going to help you at all. You'd do much better looking at it in terms of what you can provide to people to make them happy to pay - $5 or more - every month and to recommend it to others because they feel it's such good value. The difference between that perspective and your own current one is highly likely to be the difference between overall success and overall failure.

        The question of whether or not a membership site will work for you doesn't depend on what its monthly subscription-charge is: it depends on the skills you have (especially communication skills), and on the value you provide.
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  • Profile picture of the author powerofschool
    If your site i really worth. And have good potential information ( useful to the users ) Then it will work.
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  • Profile picture of the author summerdayz
    Based on the idea of people not cancelling because it's cheap will not work. It still have to be based on the quality of work and value adding. Which I believe you have a plan for it. Work hard on that plan instead of banging on the cheapness. =)
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  • Profile picture of the author gcgipson
    Originally Posted by coreytucker View Post

    I have a business model of building $5 per month membership sites. I see a lot of potential in this. I think it could work in all sorts of niches. I plan to build email list in each niche and build a relationship with my list. Then I promote my $5 a month membership site via paypal. These people will not cancel because it's only $5 a month. Before you know it im making 10k a month Sound doable?
    $5 a month for what?
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  • Profile picture of the author Story
    But then $5 is a really low price, why not $10?

    But then, It will be totally dependent on the content you provide. If the content is no good, you will get cancellation even at $1.
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    • Profile picture of the author agmccall
      I do not have a membership site, nor do I plan on one

      But, if I were so inclined, I might try for the $29.00 lifetime membership instead of $5.00 per month.

      Although, if someone were to join at the $5.00 per month level then they might not notice the monthly charge and keep the membership by way of forgetting to cancel.

      al
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  • Profile picture of the author djneill
    I would test different price points 5, 10, 15, 20, very low ticket prices and as long as you provide quality content then people will stick around. It may take a while to get to your target goal but I think it's going to be very cool.
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  • Profile picture of the author Steve B
    Corey,

    A couple of suggestions for you.

    First, as others have said, adopting a business model based on a pricing strategy is not necessarily a good idea. Often you hear successful marketers talking about first finding a profitable niche and a hungry audience. That should drive your selection of topics for your membership site - not anything else. People will respond to your offer, largely based on the value they place on your offering, not the fact that it's only $5/month "so what the heck."

    Originally Posted by coreytucker View Post

    I plan to build email list in each niche and build a relationship with my list.
    As with any "empire" or network of sites, I think it's a bad idea to throw up multiple niche income streams in the beginning. Put up one site, develop it, work it, and make it successful. Once you've proven the model you will have the experience to duplicate what you've done in a second niche. Otherwise you stand the chance of doing a whole lot of work based upon a model that doesn't produce like you thought it would.

    Originally Posted by coreytucker View Post

    These people will not cancel because it's only $5 a month. Before you know it im making 10k a month
    I don't know who told you this, but it's just not true. Of course there is the possibility that a very few members may forget about their monthly payment, but are you really planning on this as a revenue generator? That's building your business on a foundation of sand.

    If it were really true, then no one would ever cancel their $1 trial offers and you'd better believe that most folks do opt out very quickly if they don't see value in the offer . . . even if it's free!

    Marketers often talk about the "churn" of continually having to replace members in their subscription sites in order to keep their income steady.

    Here's a hint: offer a semi-annual or annual discount to the monthly fee and make it substantial - a real bargain. If you offer great value and obvious over-delivery, that is one way of assuring at least some of your paying customers stay for six months or a year.

    The very best to you,

    Steve
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  • Profile picture of the author trader909
    Banned
    make it 50c..attract the unemployed. Give them free "motivational tips.
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  • Profile picture of the author troy23
    I think it can work well for you.
    Only thing is you may find it difficult to maintain all those sites, update content etc.
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  • Profile picture of the author Randall Magwood
    Come on.... you're practically competing with McDonalds with that low $5 price. Increase it to over $20 a month... then your math and logic might make sense.
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    • Profile picture of the author JohnMcCabe
      Originally Posted by coreytucker View Post

      I have a business model of building $5 per month membership sites. I see a lot of potential in this. I think it could work in all sorts of niches. I plan to build email list in each niche and build a relationship with my list. Then I promote my $5 a month membership site via paypal. These people will not cancel because it's only $5 a month. Before you know it im making 10k a month Sound doable?
      Except for this bit:

      These people will not cancel because it's only $5 a month.
      You want people that won't cancel because they don't want to miss what's coming next, not because they forget or cancelling isn't worth the effort.

      I know one guy that runs a newsletter that charges $1 per month for 4 weekly issues. People rag on him because he only makes about $0.20 per issue per subscriber. His take is that he only has to write/compile/edit each issue once, and with ~5k subscribers, each issue is worth ~$1,000. He makes more per hour than his doctor.

      Originally Posted by coreytucker View Post

      Thanks guys. I need an angle I guess. Something that is valuable and is not offered elsewhere in the niche.
      Valuable? Yes. Not offered anywhere else in the niche? Not necessarily.

      You just need a good enough value proposition to attract your audience, then provide enough value that they want what you offer.

      Look at late night network TV in the US. All of the shows offer pretty much the same thing - a mixture of comedy by the host and an assortment of guest chats dominated by entertainers plugging their current projects. Yet each show tends to attract a share of audience.
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    • Profile picture of the author An Al
      Originally Posted by Randall Magwood View Post

      Come on.... you're practically competing with McDonalds with that low $5 price. Increase it to over $20 a month... then your math and logic might make sense.
      He's not selling Happy Meals.
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  • Profile picture of the author Dan67
    Well Club Penguin makes millions a year with £4.95 a month membership.
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  • Profile picture of the author AlexGeorge
    The pricing average depends on the niche, but for most $5/month sounds pretty good. Of course, you need to have a lot of quality content ready made for users. Don't think that they won't cancel their membership because it is "only" $5/month, users definitely will if they feel the content they receive isn't valuable.
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  • Profile picture of the author Tim_Carter
    Take it from someone who has been doing memberships a long time. Charge higher prices. Price has no bearing on membership length. I have many customers paying me monthly since 2007. And I wouldn't even consider charging a low price like $5.
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    • Profile picture of the author An Al
      Originally Posted by Tim_Carter View Post

      Take it from someone who has been doing memberships a long time. Charge higher prices. Price has no bearing on membership length.
      You should charge them $5,000 a month then.
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    • Profile picture of the author Michael Harris
      Originally Posted by coreytucker View Post

      I have a business model of building $5 per month membership sites. I see a lot of potential in this. I think it could work in all sorts of niches. I plan to build email list in each niche and build a relationship with my list. Then I promote my $5 a month membership site via paypal. These people will not cancel because it's only $5 a month. Before you know it im making 10k a month Sound doable?
      Hey Corey,

      Great Post!

      I also see a lot of potential in this business model,
      and am working on a project now.

      I'm actually following the monthly email newsletter
      approach outlined in the WSO mentioned by SteveSki below.

      As well as having an "angle"

      I'm spending time "profiling" my "perfect" member,
      in order to know their problems,
      how they communicate,
      what they need and want ETC.

      By knowing this data your communication to your
      audience will be clearer and stronger.

      And that will make your content more valuable to them.

      Also you have a better chance of coming across
      as an "authority" in your chosen niche.

      This combined with the low $5/month fee theory
      should help you boost the retention rate of your members.

      Although after reading this thread and what Tim_Carter said,

      Once I am set up,

      I will be running tests to see what the optimum price my members will pay.

      All the best with it.

      Originally Posted by SteveSki View Post

      Of course it will work....

      The WSO someone mentioned is: http://www.warriorforum.com/warrior-...ever-seen.html

      Exactly a year ago I kinda put up a membership site but decided not to have a members area... the content is dripped out to members by my Aweber autoresponder (one new lesson each week) first month $29.95 then $10 per month.

      Haven't done any paid advertising, about the only thing I've done to actively promote it is a link in my Signature and it's now producing about $500 of monthly profit.

      Most people stick with it for 6 months (I only have 26 weekly lessons) so I really need to create more content and try testing some paid traffic sources.

      I purchased the above WSO a couple of months ago... It's a pretty good blueprint well worth the small investment but the OTO traffic/facebook upsell wasn't very good at all.

      Cheers,
      Steve
      Originally Posted by Tim_Carter View Post

      Take it from someone who has been doing memberships a long time. Charge higher prices. Price has no bearing on membership length. I have many customers paying me monthly since 2007. And I wouldn't even consider charging a low price like $5.
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  • Profile picture of the author RobinInTexas
    Start with only one niche, and overdeliver, overdeliver, overdeliver.

    When you get a large number of subscribers, spend some money so you can overdeliver even more and raise the price from say $5 to $15 for new members, holding the price for existing members.

    Once you do that offer your members an affiliate program where they get 50% (recurring) for all new signups.

    Rinse and repeat.

    As an example, I'm in a membership I've been in for years at $15 that is going now for $47 a month
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  • Profile picture of the author coreytucker
    Thanks for the replies guys Do you guys think I can use facebook ads and build a fanpage to promote my membership site in a niche?
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  • Profile picture of the author tyronne78
    Don't sell yourself short. That shouldn't be your thinking. A good starting point would be around the $50/month range.
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  • Profile picture of the author zxcvbnm
    Only if you have or can get the traffic, and have a strong desire for people to shell out the $$$
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  • Profile picture of the author onlineworks
    This really got me thinking. I have been operating and teaching Forex courses for a couple of years locally. I am in the process of remodelling my business as I wanted to increase revenue, etc. I always went for great quality with low numbers however it has been really time consuming. I have mainly taught people on a one to one basis in order to gain peoples trust.
    Most of my clients have come from word of mouth, however it hasn't been easy and it's a really slow process.
    I wouldn't charge $5.00 either however I really like the idea to be honest. Still offering the quality but with a larger audience.

    Thanks for this thread. It got my mind working again. My only worry would be the admin side of things with possibly hundreds of emails flying about.
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  • Profile picture of the author workoutstuff1
    In answer to your question this sounds doable, but as others have said on this thread, you still need to make sure you are providing something of value, even if you are only charging $5 / month for people to be a member of your site.
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    • Profile picture of the author ajwilliams
      Ok, you might consider thinking outside the box on this idea. Is the idea to make $5,000 a month offering to work for 1,000 people less the expenses of payment fees and any number of other fees? If so, you should be able to do it easily. And then, you are going to try to duplicate that in several niches? Better consider hiring some people to help.

      However, if the idea is to make a lot of money from offering something in a particular niche that you might have some expertise in, then there is a way to do that too. First, you do not want to limit yourself to 1,000 "members". Why? Because at $5.00 a pop, it's not a membership. It is really something else. What, you ask? I am going to tell you by giving you a perfect example of what you are talking about. BTW, this is not a new idea.

      Liz Tomey and Jeff Dedrick teamed up and offered a 12 month course on how to make money in the IM field. They offered it on this very forum "Warrior Forum". And, their offer was far and away worth many times the price. But, they were not in it for the $5.00 per month. How do I know this?

      Well, first they paid 100% commission to affiliates that sent them subscribers in droves. I shudder to think of how many they actually signed up. I would bet it went into the thousands. So, what was the end game?

      It was a well crafted funnel to suck in thousands of prospective IMers into their Mailing List. Yes, it was in fact a list builder. And, the fact that the course was for only 12 total payments ($60.00 total), it was easy to sell. Now, mind you, it did not matter whether the subscribers stayed with the course for the full 12 months because they were still on the mailing list.

      That list is worth an untold amount of money and is probably still growing in size and value because the 12 month course was set up as an evergreen product and essentially is fully automated. So, they will be making money from this course and the list that it generated for years to come.

      Disclaimer: The above is only my opinion based on what I determined with respect to what you have read. It is possible that I am totally wrong and they were in it for only the $5.00 per month. I will leave that to you to decide. I believe what I said and you can take it with a grain of salt if you think I am out of my mind.

      THINK OUT OF THE BOX

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  • Profile picture of the author paul nicholls
    i currently charge $17 per month but i do have over 150 videos and they get access to over 100 instantly when they join

    i have found that $17 per month works really well but you do obviously need some good content

    what i do is drip feed products and content each month so the longer people stay the more info they will have access to

    you need to make sure you give people a good reason to stay

    $5 per month could work well but you will need to generate a lot of monthly members for you to make any reasonable income

    Try it and see how it goes it's all you can do
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  • Profile picture of the author yukon
    Banned
    You might make more money with a yearly subscription.
    • On a monthly subscription some people will drop off, example after the 1st month. With a yearly subscription you delay the drop off subscribers ($$) for 11 months (at least).
    • With a monthly subscription you'll be paying a monthly transaction fee x 12 months, opposed to a one time yearly transaction fee.

    If you want $5 a month per subscriber, charge $59 a year.
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    • Profile picture of the author JohnMcCabe
      Quick question...

      Where did Corey say he was going to be in the IM market, and where did he mention anything about limiting to 1,000 members?

      With the right product in the right niche market, that $5/month could be multiplied by tens or hundreds of thousands for a consumer niche.
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  • Profile picture of the author seobro
    This has been my experience. At first they are updating and adding new content like crazy. OK so then they start to slack off and they will not return any emails or phone calls even. Finally, you start to get database errors. Like now you cannot even sign on.
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  • Profile picture of the author Ron Killian
    The other assumption is that the higher the price, the better the copy needs to be. So if your not a copy master, it "should" be easier to sell a lower price point membership.
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  • Profile picture of the author jessegilbert
    I would focus on 1 niche first...easy to get distracted thinking about 20 ideas...
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