What Anybody Creating a Membership Site Needs To Know

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The membership site online business model is often praised as the holy grail of internet income. With a large group of paying subscribers, you not only have a steady stream of income and a great audience to market to, you also have a community of like-minded members to share your knowledge with.

Operating a membership site definitely has great benefits, and of course has its own unique set of challenges as well.

Before starting with any business model, it’s good to have a clear understanding of the pros and cons. Most gurus selling courses will only highlight the positives. Here are some things you need to know so you can make a clear decision on whether to go this route …

Benefits of a Membership Site

Reliable Income – A membership-based subscription business model provides you with recurring income that is more stable than relying on one-off product purchases. You know that each month, you have a general range of guaranteed income coming in, whether you acquire new customers that month or not.

High Profit Margins – As your content is most likely going to be delivered online, it has very high profit  margins. Members pay you to create new content and provide value to their membership, with very little overhead costs.

Increasingly Valuable Asset – As you add content over time, your member’s area becomes more and more valuable. This makes the sign-up offer irresistible, and you can raise your prices as time goes on. 

Fulfilling – Membership sites offer products and services that serve and help others. Because of this community aspect, it’s a very fulfilling business to have, as you interact with members and get to see their progress and success stories … all because of you.

Customer Loyalty – Customers are continuously logging in to your business and being reminded of the value you provide. Your brand is top of mind to your members, and they will eagerly anticipate new content and information from you. Seriously, who can resist the opportunity to be such a celebrity in their niche?

Increased Customer Insight – The social side of the member’s area allows you to interact with and get to know your customers much better. With webinars, Q&A sessions, surveys and other forms of interaction, you receive much more feedback and valuable insight about their needs over operating a simple website. This knowledge means you always have ideas for new products to create and areas to improve on.

Freedom – You’ll be location independent, and have the flexibility of creating content ahead of schedule. You can devote the extra free time to whatever you choose.

The Challenges of a Membership Site

Of course, it’s not all rainbows and sunny days. Like any business, it does take effort to create and maintain a level of success, though the benefits greatly outweigh any negatives.

Constant Content Creation – Unlike a standalone digital course where you create the content once, a membership site requires constant new content for members. This requires you to either enjoy creating quality content yourself, hosting new webinars and hangouts, etc, or having the resources to outsource it all … of course, the trade-off is recurring income.

Retention Rate / Continuity Rate – This basically means, how long the average member remains subscribed. It’s not all about getting “x” members and then you’re set for life. You will lose members each month. Success comes from a balance of continuously adding new members, as well as keeping existing members subscribed and satisfied with the value you provide them.

Membership Software Costs and Maintenance – Although running a membership site is a high profit, low cost business compared to most other options, there are still upfront and ongoing costs. You’ll need a very fast, reliable hosting provider. You also need to be prepared to stay on top of the technical aspects of maintaining the platform you run your membership site on. The maintenance, updates and other technical aspects can all be outsourced, but it is something to keep in mind.

Niches That Work Well With This Business Model

Niche selection for a membership site is similar to producing any digital information product, but there are a few important differences. Here are some indicators of a good niche:


Needs Ongoing Training

The primary difference in niche selection when it comes to a subscription-based business model is that rather than involving a problem someone wants to desperately fix immediately (which do make for very hot-selling front-end products), you look for a niche or topic where a person wants or needs ongoing support, month after month.

Accustomed to Spending Money on It

There are two aspects to this: One, are they willing to spend money on your product; and Two, how much are they accustomed to spend on it.

The higher you can charge per month for membership, the fewer members you need to achieve your income goals.

Here are a few examples of things that people are accustomed to spending a lot of money on:

  • Hobbies – Golf, racing, extreme sports, rock climbing, collectibles, learning a musical instrument, learning to act, gaming and so on. The more expensive the hobby, the more likely you can charge a premium price for membership … but of course the more specialized the information is.
  • Business Development – It’s easy to justify a high-membership price when the information you provide helps a member make more money than they’re spending or grow their business assets.
  • Investing – Again, anything that involves growing assets is something people will always need. Once their initial financial goals are reached, they’re likely to still stick around for your cutting edge strategies to maintain or grow that income. 
  • Career Development – This could be either parents looking to help their children prepare for and get into a good college, or adults looking for career training or advice for career enhancement.
  • Health – Depending what it is, people will spend a lot to preserve their health, youth and vitality. Similarly, they will also join a subscription to reverse a life-altering illness and stay on track with a new healthy lifestyle.
  • Relationships and Love – Whether it’s finding that special someone, keeping them, or repairing that relationship if things go downhill, a lot of money is spent on dating, marriage and family success.

It’s Not Seasonal

You’ll want to also check that the topic will sell all year long, and not just during certain times of the year. In some cases this will be obvious.

If you’re not sure, you can search the topic on Google Trends to see if there are significant drops in interest during certain months.

People are Receptive to a Membership Model

It’ll be easier for you to succeed if you can find competitors with a membership style model in this industry. It doesn’t necessarily have to be an online members site. It could be in the form of magazines, associations, clubs or other similar products/services that have ongoing fees.

If you find that there are competing membership websites in your target niche as well, this means that people are willing to pay to be part of one.

Many Content Options

You’ll need to consistently produce new content for members, so it’s crucial there are plenty of topics to cover. It’s best to start by mapping out a year’s worth of ideas for content upfront. This doesn’t have to be the final list or even what you end up creating. The point is to determine how easy it is to come up with enough content ideas for a year or more.

You’re an Expert/Specialist (Or Can Hire One)

You don’t necessarily have to be an expert on the topic to run a successful membership site. However, you will need a way to have the content created by someone who is. Either have the funds to hire someone, or you can partner with someone who is an expert and split the profits.

You Enjoy the Topic

You don’t necessarily have to be super passionate about the topic. However, if you don’t have at least some interest in it, or at least a passion for helping people who need the information, it may be difficult to maintain over time as your interest wanes. 

Membership Site Software

Once you decide to create a membership site, the next factor is to decide what software you will use to manage your community. While there are dozens of different types of software, a lot of it comes down to the type of membership site you wish to create.

For instance, will it mainly be written content? Video tutorials? Webinars? Full online courses? Drip-fed information, or presented all at once?

Also look at the management of subscribers, such as different levels (and often price points), monthly, yearly and lifetime subscriptions, and payment gateways.

While researching what to use, you can also think of other features, such as member rewards, badges, milestones and other incentives to help keep your members engaged and motivated to learn and participate.

WordPress-powered Membership Software

WordPress is one of the most popular and flexible options for hosting membership sites. Best-selling membership plugins include:

MemberPress: One of the most popular WordPress plugins for membership sites, MemberPress boasts an “all in one” solution and easy integration into any WordPress website. Prices start at $149/year.

LearnDash: Specializes in memberships geared towards training and courses. You can build drip-fed courses inside the software, and include quizzes, set prerequisites, and assign grades, certificates and badges. Starts at $159/year.

Restrict Content Pro: Creates an “exclusive content” area on your WordPress site for members only. Includes membership levels, payment gateways and member management. Starts to $99/year.

Memberful: Designed to be easy to set up, and features a separate control panel to manage members. Starts with a free version.

Hosted Membership Software

Besides WordPress, there are several platforms you can build your membership site on. This means the company you sign up with specializes in memberships, which often results in a fully-featured, powerful system with hosting and content storage included. The drawback is that your business relies completely on their software. Companies include:

Teachable: Create a course, upload it, choose a design and options on how to present it, and you’re ready to go. Teachable is designed as an online school, and they take care of all subscriptions and billing. Plans start at $29/month.

Kajabi: An online platform where you build your website and membership community in one place, and customize your pages, courses, digital products and subscriptions. Plans start at $119/month.

Membergate: Create your own subscription website with an all-in-one course creation and management system, with progress tracking and completion certifications.

Building a membership site business is not as complicated as it may seem on the surface. It primarily comes down to choosing a profitable niche that fits the business model, brainstorming and creating content, setting up a member’s area with your chosen software platform, and creating the marketing pieces to publish or present on webinars and tutorials.

Then you run traffic to the offer and start making money (sign up below to learn how to do this). Everything after that, such as executing tactics to keep members subscribed longer, is simply fine-tuning to get yourself better results in the long term.

Along the way, don’t be surprised by the incredible feeling of personal fulfillment! After all, a membership site is simply a community of interested people, all of whom are looking up to you to better themselves. While making a living with your chosen online business model, you are also truly serving and helping others attain their goals as well.

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