Is an online membership right for your business? Probably not.
When considering adding a new offer to your business, the decision of what container to use (course, low priced offer, membership etc.) can be a large decision. Memberships can seem like a very attractive offer for your business but they are not the right decision for most people, especially people who are still newer to business.
Memberships Seem Like A Great Idea
Memberships are attractive for a lot of reasons, not least of which is the recurring revenue. It seems like a win-win, you get a recurring payment and your client pays a smaller price per month than a full course. Additionally, you can promote one membership versus splitting your focus between promoting multiple offers. Especially if you have a lot of content you want to share and teach, memberships seem great, but is it the right choice for your business.
In actuality, memberships are hard
Retention is hard. The average churn rate for a membership is between 5-7% of members. This means that every month, 5-7% of your users are going to be cancelling, meaning you need to refill those slots to keep consistent revenue. Even if you are providing great value and content, your members will change businesses, have a change in their finances or any one of a hundred reasons that may have nothing to do with you and therefore means that there is nothing you can do to convince them to stay.
Additionally, you need to keep providing the value and creating the content on a monthly basis. A course is different in this way, because even if you are pre-selling a course (selling it and then creating the content or running it live), with a course you are still operating on a finite number of lessons, modules or weeks. When you plan a course, you plan for it to have a certain number of lessons. Once you have created those, it’s finished. Now, you’ll want to tweak based on feedback and perhaps add new things as value adds, but these are very different from a membership which requires a lot of new content indefinitely.
You have to create content to a specific level on a very consistent basis with a membership. When customers are paying each month for a membership, they expect to have new content added every month. We all have the best of intentions when it comes to content creation, but very few of us can keep that consistency up at all times. Especially for busy professionals who are working with clients, making sure that the same level and quality of content is created each month can provide a lot of pressure. If you don’t maintain that level of consistency and fail to deliver what you promise, that churn rate is likely going to go up and people may even request refunds. Also remember that you will still need to be marketing your membership to be bringing new customers in and backfilling those cancelled slots. This adds more to that content creation wheel.
The main reason I advise against memberships
The continual content creation at such a high level is one of the main reasons that I never recommend a membership as your first offer. It is going to take some time to build up your membership base, especially if you are starting with a small list. If you get 5 people to sign up, is the money that they will be paying on a monthly basis feel like enough to create that consistent content? Even if you have three people sign up for the course we talked above, you are likely having more money coming in and you have already created the content promised and can focus on tweaking the selling engine (and maybe tweaking the content) versus having to churn out more and more content every month.
Additionally, sometimes courses can be an easier sell for a client. They know what is included for one price, even if they choose a payment plan, it can be nice to know exactly what content you are getting for one price. Memberships can seem endless in that regard. Additionally, many courses include unlimited access to the course content (though access to the course creator may go away). This is something that doesn’t come necessarily with memberships.
When might a membership make sense?
One obvious reason a membership might make sense is something like stock photos. Also, if you are in an industry where things are always changing (perhaps social media), a membership might be a good idea because you are going to need to be making constant updates to your courses and materials, so it may make sense to offer ongoing access and give yourself some recurring revenue to offset the time it will take to update. It also might make sense if you love content creation and have a large audience willing to pay. If you can make your membership the core offer in your business (both in terms of time and money) then it might make sense. However, you have to love creating content to be willing to put the time in and you need to have a large enough audience who are going to be interested in buying the membership to make the money side work.
Overall, remember that your idea of what to teach and what to share is the most important part and it can most likely work in a lot of different forms. Just because a membership doesn’t fit doesn’t mean that you have to abandon helping people, what other forms can the content take?
If you’ve had your heart set on a membership, but aren’t sure if it is the right fit for you or are having second thoughts, contact me to learn more about my Concept to Plan intensive. I’ll help you take your ideas and form them into a cohesive plan moving forward that not only delights your clients but also serves you by coming to life in a form that is doable for you.
My mission is to help business owners grow their digital presence - so they can not only achieve their business goals, but surpass them. Above all, I’m guided by my passion for helping others to take their ideas from concept to reality. As a business owner myself, I take incredible pride in the work I do, and am grateful for the opportunity to help other business owners bring their dreams to life.