Before we dive in, just a heads up that the 2020 Heart-Centred Business Conference will now be VIRTUAL!! Tickets from just AUD$195 Get The Details Here.
Today we’re going to be talking about the four big considerations you need to think about before creating and launching a membership.
So if you’ve been thinking about putting a membership out there, this is going to be a really juicy episode for you.
What is a membership?
It is where you have people in a group program and they need to make a recurring payment in order to stay in the program.
For example, you might have a course where people make a payment and then they’re in the course until it’s finished, and then they’re done, or they’re in the course evergreen so they can stay in the course for as long as it exists.
A membership requires that people pay a membership fee in order to stay inside that program.
So in my business, the Heart-Centred Business Academy is a membership. It has a monthly fee people can pay by the year or pay by the month. But when they stop paying and their membership expires, they then leave that membership.
Creating a membership can be a really sexy way to get into leverage and add more leverage in your business. It’s a way where you can be paid on a recurring payment, and you don’t have to re-market to the existing members in order for them to decide they want to stay in.
Now, that isn’t always 100% true, because you do want to ensure that you are encouraging people to stay in the membership as much as possible. But you don’t have to go out and sell membership spots every month to be making money every month from your business, because if there’s a value proposition for people to stay and keep paying membership, they will.
So it can be a really juicy model, and it can sound very appealing to create and launch a membership program. But as with any business strategy and model, you know that I like you to go in with your eyes open, knowing exactly what you’re getting yourself in for.
I think memberships are sexy, I have one. I’m not saying don’t create a membership.
But I do want to give you four things to consider before you just jump straight in, so that you can keep your eyes open and know that you’re making the right decision for your business, for you, and for your clients.
1. It’s the right fit.
First and foremost, make sure that it is the right business fit for you. And don’t assume that because it has recurring income that it’s going to fix all recurring income problems that you have in your business.
It’s not the only solution to good baseline income in your business. I have a number of clients who thought the only way they would be able to fix their recurring income issues and their cash flow issue issues in their business was to create a membership, when instead what we’ve done is put their existing course or program on evergreen and created evergreen sales funnels.
For example, with the Heart-Centred Business Academy, the current rate is $196 a month. But the current price of the TakeOff program is $2,000, or thereabouts. So if I want to create $2,000 in recurring monthly income in my business, I can sell one spot of the TakeOff program every month, or I can sell 10 spaces in the Heart-Centred Business Academy and have those 10 members stay in.
And that’s where the sexy part is for a lot of people. They think, “Well, once I get someone in, they’re definitely going to keep paying me and so therefore that’s going to be way better for the long term baseline income of my business.”
But I tell you, it is easier for me to sell one spot on TakeOff than it is to sell 10 spots in the Heart-Centred Business Academy. And also, for me in particular, selling 10 spots in the Academy takes a lot more work because there are certain things that people need to have ticked off before they’re really ready for the Heart Centred Business Academy.
Additionally, the workload that’s required to keep people in the Academy at $196 a month means that when they join, it doesn’t necessarily mean that they’re going to be with me for a long time.
So for some people, the cash flow solution that they’re looking for is to put their course on evergreen and create funnels for it.
For other people, the cash flow solution that they’re looking for is actually to get a couple of VIP clients on monthly payment plans that are going for the next 10 to 12 months.
The delivery model, and the work that’s involved, and the marketing that’s involved in them getting a couple more VIP clients is way less than the workload, marketing, and delivery required for holding space for 50 people in a membership at $50, $100, or even $200 a month.
So just make sure that when you are looking at bringing a membership into your business model, you are making it for the right reasons and you’re not making assumptions about it being the best or only way to fix the issues that you’re currently facing.
2. You’re ready for it.
Number two is to make sure that you’re ready for it and that your business is ready for it as well.
What I will say about readiness for selling a membership is, first and foremost: Do you actually have a solid audience that you can launch to?
Secondly, do you have clarity around your value proposition? Are you good at messaging to the outcomes that you deliver already?
And thirdly, can you cope with the loss in cash flow? Now this third thing is actually my point for today as well. So I’ll be talking about that one in a bit more detail.
3. You’re clear on the membership type and value proposition.
Number three is being clear on what type of membership that you are selling, and also the value proposition of that particular model.
There are two main types of membership. (There are actually three but the third one is a really bad one and I’ll tell you about what that one is so that you can avoid it!)
The two main types of membership that I recommend to people are: Plug and play memberships and Process driven memberships.
Plug and Play Memberships
The Heart-Centred Business Academy is a plug and play membership. It has modules in it that people can grab and implement when they feel ready for that thing or they’re looking for that particular piece of advice.
Because it is a business strategy membership, there are modules on how to create great welcoming onboarding sequences for your business, how to grow your list, strategies on running webinars about how to scale up the rates of those webinars, how to run a five day challenge, and how to launch an online course or program. People grab the modules that they need when they are ready to use them.
So it’s a plug and play, not a sequenced process that you need to go through. And even though we’ve got different stages of business, it’s plug and play.
If you’re already creating automated funnels, you can jump into the Heart-Centred Business Academy and there are modules on creating funnels, so you don’t have to go through the Academy modules in any particular order.
A plug and play style membership fits where what you’re teaching is something where people can grab and choose bits that they need. Other examples might be if you’re doing meal planning, people can grab certain meal plans for certain seasons, or certain meal plans based on the types of foods that they like, or dietary requirements, or what they’ve got in their cupboards at that point in time, whatever it might be.
If it’s really valuable for people, they’ll pay to continually have access to this plug and play library, and then that could be a good model for you.
Now with my membership, it also includes live access to one on one conversations with me through our group coaching calls, because often people don’t know which module they need to plug and play at that point in time.
That’s a huge value proposition of the Heart-Centred Business Academy. It’s not just the information that they have access to, but it’s actually the transformation it will facilitate in their business because we’re talking about where they’re at in their business, what the right strategy move is for them, and then there’s modules that they can go and watch to implement that particular strategy.
They also then get to come back and have conversations with me about what they’ve made decisions about and whether they’ve got questions on things and where they’ve got stuck on things.
So the value proposition isn’t just the modules, it’s actually making sure they’re accessing the right information at the right time for their particular needs.
Process Driven Membership
The other style of membership is a process driven membership, in which people come in to learn a specific process of yours, but the value proposition of staying in the membership is continuously improving and refining that implementation.
So let’s say you have a six step manifesting process where people can manifest an income goal. Why would people continue to pay to be part of that membership? Well, it’s not just to learn the six steps and then they leave and get on with their lives.
It’s because when you’re implementing those six steps, you usually have self sabotage, barriers, questions, all sorts of things that come up for you. So you’re paying to stay and practice that process.
It also works really well for things like productivity or where people are learning to embed habits or skills that they may not necessarily have learned before. But it’s not just the learning that they’re there for – they are there to continuously practice in a supported environment.
Information Driven Membership
Now, the third type of membership, which I do not recommend, is an information driven membership, one where you jump in and you’re drip-fed different pieces of information as you go, and there’s no direction for a plug and play, nor support for a process driven membership.
Memberships that are driven only by information generally are the ones that have high dropout rates and low conversion rates. This is because information is available to us freely, and the value proposition of joining your membership is not the information you get access to – it’s the transformation that it facilitates.
Yes, that curated information may assist with the transformation process, but if it’s only information driven, then chances are you will fall into the industry averages, which are three month dropout rates and less than 1% conversion.
So that model of membership is low profitability, it requires a high level of marketing because you’ve got a lot of churn, and in a lot of cases it doesn’t have the ongoing loyalty that other styles of memberships will deliver.
It also isn’t necessarily the right fit for your ideal clients, and it’s not particularly valuable to them, because information is freely available everywhere.
What they want is to achieve some kind of change, some kind of outcome. And if you’re not facilitating that change in your membership, are you really serving your customers and clients effectively? So you need to be clear on what type of membership it is that you are facilitating.
4. Are you ready for launching?
Launching a membership can sometimes result in a significant drop in your income in the short term.
When you’re launching a course or program or membership for an extended period of time, you’re focused on promoting your lead magnet, which is free. And in most launches, you have two periods of lead magnet promotion.
So there are two extended periods of time where you’re focused on promoting free things. Then you have your cart open and cart close, your early bird, your full price, whatever it is that you’re doing, but if you’re selling a membership, and most people are buying by the month, then the return and the influx of income that you would normally get when you’re launching a course, for example, may not be there because it’s actually growing your ongoing income.
If you’re launching a membership program for a month, and you normally charge $2,000 for your VIP services and $1,000 for a course, and you’re charging $100 a month for your membership, and you get 400 people signed up to your webinar with a good conversion rate – let’s say a 5% conversion rate, which means five people for every hundred – so that’s 20 people who join your membership, and you make $2,000 for the month.
Now, think about your likelihood of having that high conversion rate on your first launch, of having that many people sign up to a webinar on your first launch. Are you really going to make enough money to get through that launch process?
That’s not even taking into consideration the ad-spend. Whereas if you were able to launch your course, and you got 20 people converting at 5% – 400 people – that’s $20,000, if they’re paying you $1,000 for your course.
So you can see that the short term cash results from launching a membership can sometimes be a dip. There are strategies to overcome this and dampen the impact on your cash flow when you’re launching a membership.
Something that I do recommend to my clients is – when you first launch your membership, have your first lead magnet sell people into buying a year upfront only. Do it at a lovely no brainer price, but in a way that’s going to give you the cash flow that you need in the short term from your early bird.
And then in your second lead magnet, open up paying by the month. That way, you’re going to have the best of both worlds – you’re going to have an income injection, and you’re going to have that ongoing income coming in through the people who are paying by the month as well.
So yes, there are some ways that you can get around it, but you just want to go in with your eyes open.
Ok? Aunty Tash wants to make sure that you aren’t going to completely derail your business and get into the huge mindset wobbles and downward spirals because you didn’t think about these things going in, and you were sold this idea of an information product.
It’s not about your knowledge. It’s about facilitating transformations.
If you are ready to jump into launching a membership, I have a juicy free resource for you as well.
It’s almost two hours long, but it’s a free training and it is very valuable. It’s called Create And Launch Your Online Course.
Now, I know it says “online course.” But most of the lessons in this particular training also apply for memberships, so long as you bring together the information I just gave you in this podcast episode with that free training.
Where I talk about courses in the training, you just slot in memberships, you have a think about those particular considerations that I’ve posed to you today.
You have everything that you need to know, and exactly what you need to do, to not only create but also launch your online course or membership.
Until next time, I cannot WAIT to see you SHINE.
Hi, I’m Tash. And I am so excited that you’re here. As you may have noticed I’m a total business and marketing strategy geek and I absolutely love helping women to create online businesses and courses that are perfectly aligned with THEIR zone of genius, AND that have a super-specific and strong value proposition for their ideal clients. Connect with on social media (links below) and come join the #ladyposse on Facebook.