Will $5 a month membership sites work?

This. You need to ALWAYS be delivering VALUE to the people on your list and in your membership if you hope to keep them subscribed and as paying members.

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.

Depends what service or content you offer.

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.

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

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

Except for this bit:

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.

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.

He's not selling Happy Meals.

You should charge them $5,000 a month then.

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.

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

A J

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.