With this e-book, we’re going to show you how you can start up your monthly membership site. However, monthly membership sites are just one of the many membership site models out there. So why am I choosing to focus on monthly membership sites specifically?
Simply put, monthly membership sites have got more to offer. To prove my point, I’m going to take you through the other popular types of membership sites that there are out there. I’m not going to focus on the topics or niches that you can build your website around as we’ll discuss those in the next chapter.
For now, we’ll scrutinize and analyze the types of membership sites based on their respective pricing models.And while free membership sites are great for lead generation and ‘vanity publishing’, paid websites are what you really want to look towards if sustainable passive income is your main goal.
We’ll be going over the differences between 4 specific types of paid membership sites – One-Time Payment Membership Sites, Monthly Membership Sites, Fixed Term Membership Sites and Quarterly/Annual Membership Sites.
Without further ado, let’s get into it.
One-Time Payment Membership Sites
Firstly, let’s talk about One-Time Payment membership sites. Memberships of this kind are also sometimes known as lifetime memberships. Prospects pay a one-time only fee and then have life-long access to the said membership site and all its content.
Often times, one-time payment memberships are offered for news subscriptions, forums or clubs and societies. In terms of online businesses, these sites sometimes offer resources such as safelists and traffic exchanges.
The lifetime membership can be priced and sold in the range of hundreds of dollars and it offers high ‘burst’ profits. Due to its expensive pricing, it does not see as many sign ups as monthly or fixed term membership sites.
One of the major flaws of this payment model is that you will have to consistently produce content and service for your subscribers, rain or shine, with hardly any forthcoming profit. When you offer one-time payment memberships, you are stuck with doing extra work for free – you will need to provide customer service indefinitely to your subscribers and you won’t be able to collect any extra payment from them.
You will basically have to continue servicing these clients as long as your site is up and that can mean a lot of extra time and effort. So yes, your subscribers paid the one-time fee of $497, which is a lot to rake in for just one sign up, but is it worth it having to constantly cater to these customers while getting nothing in return from them after their initial payment?
You will receive no recurring payment and you cannot count on them spending money on your other offers– therefore, your profit per month can be highly erratic and, therefore, unreliable.
Another downfall of this type of membership site is that it is much harder to sell away because it has no recurring value. Unlike Monthly membership sites which offer a profitable exit strategy, one-time payment membership sites have no such strategy in place because a one-time payment membership site doesn’t offer muchin terms of continued revenue.
Even if there are people who would be interested in purchasing your site, they would probably only do so to get a hold of your database of users, but as there is no direct profit to made from your site, it’s highly unlikely that you will be able to make much from the sale.
Without a profitable exit strategy, it means this baby is going to be yours to molly coddle FOREVER. Being tied to a site like that, which loses its profitability after members pay their initial and only sign-up fee, is not the best way to grow your business online. In my opinion, it’s a waste of your valuable time and effort. This is why, I would definitely not recommend this type of membership site.
Quarterly / Annual Membership Sites
The next type of membership site is the Quarterly or Annual Memberships site. This type of membership site offers subscription every 3 months or on a yearly basis meaning that your prospects have to renew and pay for their subscription every quarter or year, depending on which model you choose.
Simply put, this type of membership site will have you raking in money every three or twelve months, instead of every month. That, in itself, isn’t as reliable as being paid every month for your efforts.
One of the main downfalls of quarterly or annual membership sites is the fact that the subscription requires your prospects to pay a bulk of money in advance. And annual subscriptions can rest anywhere between $150 – $400, depending on your content.
This can, naturally, have your prospects a little hesitant to opt-in. Your membership site might be demanding too high of a commitment from them. They will have concerns; signing up with that amount of money, they’re bound to question if it’s worth it. Compare this with monthly membership sites, where a month’s membership for Software as a Service (or Saas) usually costs somewhere between $20- $80.
Now, there’s a huge difference between parting with $80 and parting with $400. Even if they technically get more for the latter option, it’s just a lot harder to commit $400 to a membership site.
They will also have higher expectations for the content they receive. This puts added pressure on your shoulders to over-deliver, in the interest of keeping them happy and retaining their membership.
Customers will always want more bang for their buck and if you are having them pay you large sum of money every 3 or 12 months, they will expect even more from you.
Also, similar to the one-time payment model, these types of websites are harder to sell off. While this model does offer recurring profit, the recurring profit isn’t as often as monthly membership sites and therefore, isn’t seen as being as profitable.
Fixed Term Membership Sites
Now, let’s move on to fixed term membership sites. Fixed Term Memberships are based on a limited time frame that ranges anywhere from 3 to even 36 months. Basically, it’s a membership that comes with an end or expiry date.
The way this type of membership works, payment can be done either on a monthly basis or a one-time upfront payment, especially if the fixed term is lesser than 24 months. The main difference between this form of membership site and all the rest is that fixed term memberships sites allow you to determine exactly how much time you are committing to this membership site.
Often times, fixed term membership sites are for content-based memberships such as online courses and webinars, which can cover one subtopic every week or month.
These sites tend to have a higher retention rate, especially because the topics in these fixed term membership sites tend to be very detailed and/or skill-based.
Also, because most fixed term memberships follow a pre-determined syllabus, it means that you can prepare all the content way in advance. This means that you won’t need to worry about rushing content throughout the fixed term.
The fixed syllabus also allows you to keep members engaged and interested in continuing their membership. Ending each course with a sneak previewof what’s to come in the following week allows you to tease and pique your subscribers’ interest. This can help create intrigue and ensure that they stay engaged for the following weeks, months or years!
However, all good things come to an end with fixed term membership sites – and this goes for your profit and revenue as well!
The bane of this model is that when the fixed term is up, you won’t receive continued income from your prospects. This meansyou would have to just hope that these prospects take to your other membership sites and online endeavors. And that’s only IF they stick with your course that long!
It feels like a bit of a shame to create a fixed term site that caps the profit you can get per prospect – this is where a monthly membership site or otherwise known as a monthly forever site wins out.
Monthly Membership Sites
And last, but definitely not least, we have monthly membership sites, our champion model. This type of membership site is also known as a monthly forever membership site. This model offers you the steadiest stream of passive income compared to all the previous examples.
For monthly membership sites, members will be billed a fixed amount every beginning or end of the month, thus allowing them access to exclusive content. Their membership will be renewed on this monthly basis.
Billing will continue until such a time that the member chooses to cancel his subscription, which he can do at anytime. There is no specified end date to the membership, hence the nickname ‘monthly forever’.
One thing that you will need to take note of is that you will have dropouts from your membership site and, to maintain the momentum of passive income that you receive, you will need to find new members to replenish these dropped members. This means that you will need to periodically flex your marketing muscle to find new members.
Why It’s Better
Where lifetime memberships fees tend to cost an arm and a leg, monthly memberships are affordable and therefore more appealing to the general masses. Lifetime memberships are often cheaper in the long run but the chunk of money that needs to be paid upfront is often a barrier and monthly membership sites offer a solution to that.
Usually, monthly forever membership sites charge a small monthly fee – think between $5 to $30for content based memberships and slightly more for software based services. Because the monthly fee is so low, it’s easy to have a member retention rate of more than 3 months.
This helps to build both stability and predictability when it comes to your website’s profits. As you track the number of paying members your site retains every month, you can have a very clear idea of the amount of money that will be added to your account at the beginning of the month.
The choice to have recurring billing and subscription allows you to keep people coming back for more and is a more popular choice for businesses, compared to one-time membership fees. Recurring billing has the potential to drive more revenue than one-time billing as there are no gaps between cycles. So as soon as one cycle (or in this case, one month) is up, the next cycle of payment begins immediately because of the wonders of automatic billing.
While this model can work for content based memberships, it’s also a very popular choice for SaaS. If you’re running SaaS or(Software as a Service), you’ll find that monthly membership subscriptions will work best. If you have a great SaaS to offer, you can have very long retention rates as your software becomes invaluable to your members. And SaaS memberships can be sold at a much higher price.
Truly, monthly memberships are the best option for the businessman who wants to have real steady passive income. On top of being easy to manage and easily automated, monthly membership sites give you a lot of freedom without the risk.
Of course, your membership site can also offer a few different payment plans. So be very careful when you fix your prices and tiers – we will also discuss this further later on in this book.
