Who Else Wants To Make Up To $6,587 Per Month With A Simple Membership Site?
After Yaro Starak interviewed me, then the Shane Melaugh video interview, many people emailed wanting more detail on how I created such a successful membership site in a hobby niche (over $300k in less than 2yrs).
Some questions were about niche selection, others about the technical side, the member retention strategies, promotion of the sales page and many other great questions.
Rather than answer them individually, this post will answer them all (hopefully)… If not, please submit your question in the comments below this post. I will gladly answer any question you have.
First up, let's look at the pros and cons of a membership site…
Pros of a Membership Site
- Monthly recurring income – make the sale once and, provided the customer is happy, they pay you month after month. There is nothing better than starting the day looking at 20, 30 or 50 emails from Clickbank (or Paypal) advising you of new subscription renewals. It sets the tone for the day in an incredibly positive way. It inspires you to do more, to make the product better… Procrastination becomes a thing of the past.
- Predictable and stable income – once you have some history, you know exactly what your conversions are, how long members stay and can very accurately predict your income in the future. This provides for a very stable business.
- High average customer value – when I started in the model train niche, I sold a $27 ebook so my average customer value was $27. After bolting on the membership component it jumped from an average customer value of $27 to $110.00. This not only made it much more attractive to affiliates (I was paying 70% commission), but it also increased the value of the website to potential buyers.
- Building a very sellable asset – a well constructed membership site, in the right niche, with a great conversion funnel becomes a valuable asset that can be sold fairly easily. Potential buyers are taking over a cash machine, where the future income is very predictable. This is very attractive to buyers. Membership sites typically sell for a minimum of 2.5 times the average yearly profits. You may never want to sell, but it is nice to know that you have an asset that can be sold for a nice big payday in the future.
- You don't need to know your subject – when you own a membership site, you have options. You can be the expert and provide the content, you can take the role of reporter where you interview people, you can be the publisher and hire experts to provide the content, or be a mixture of all (or some) of the roles.
I knew very little about model trains, I hadn't owned a model train since I was 11 or 12, but YouTube is a goldmine of free information. Model railroaders with 30 years experience happily provided their videos and expertise when asked.You will be amazed how easy it is to get best selling authors, professionals and people with decades of street-smart experience to give you all the information you need (and most of the time for free).
- Work in one niche – a common mistake of internet marketers is to operate 2 or 3 sites in different niches. The excuse is that they will test different niches, and when one does better than the others, they'll focus on that one. The problem is that the start up period is incredibly important. This is when the foundations are built.If you are spreading yourself across 2 or 3 niches, it will take you many months of wasted time to decide on one niche to focus on, and then abandon the others. That makes no sense to me. Do your research correctly in the beginning, choose one niche, then commit and FOCUS. You will then give yourself the highest possible chance of success.
- Only need 1 month of content to start – This is the best part, because it reduces the time needed to take your product to market. You only need 1 month's worth of content and then you can start promoting the site. When your first members are in month 1 of your membership site, you are creating month 2. You only need to be 1 month's worth of content ahead of the oldest member.
Cons of a Membership Site
- Memberships sites don't work for all niches – more on this later in the niche selection portion of this post.
That's a huge amount of pros with only 1 con. Hopefully I have convinced you that owning and operating a membership site is the IDEAL business for you.
But, I did say that a membership site won't work in all niches, so which niche will it work in?
Choosing your membership site niche is the most important part of the process.
You should take your time with choosing a niche. List all the options, do your research and then rank the list from best to worst. You want to be confident that the time and resources you will be investing into your membership site is well and truly worth it.
Owning a membership site means you do not have to be an expert in the niche. The best membership model is where you are the publisher and engage experts to provide the content. This content could be provided in an interview format, podcast, video, or article.
A good niche for a membership site is one where you can sell memberships all year round (evergreen market, not seasonal), the market already pays ongoing fees for things like a magazine subscription, the market likes to belong to groups and they buy stuff online.
Let's look at all of those in more detail:
- Evergreen niche – this is so you can make sales all year round, rather than in one season. There are some exceptions like the model train niche which is a seasonal niche in the US and Canada, but evergreen in Australia and New Zealand. In the US it tends to be a winter hobby because people spend a lot more time inside.
- They buy magazines – if there is a magazine based on the niche, this is a very good indicator that an online membership website will work.Magazines are expensive to produce and they make money from the advertisers and copies sold. Advertisers won't advertise in a magazine that is not selling. So, if there is a magazine in circulation, there are people paying the magazine subscription. And if they are subscribed to a magazine, there is every chance they will subscribe to your membership site (if it's any good). People interested in a niche, usually want all the information they can get their hands on.And don't be overly concerned about price… Model Railroad magazines are around $7/mo and my membership site access at the time was $27/mo.
A great place to look up magazines is at magazines.com, amazon.com and magsdirect.com. Take note of the categories in the left sidebar to give you some great membership site ideas. I always subscribe to the ones in my niche, so I can keep up with what's new, and for great ideas on future content.
- They belong to groups – online forums, Facebook groups, Yahoo groups are an indicator that people are congregating and wanting to belong. Your membership site can contain a forum which will be exclusive and provide a great attraction. To find forums in your niche Google “your niche” + forum.
- Buy stuff online – this is important. You want members to pay you online, so you want to be in a niche where the people are already buying stuff (related to the niche) online.
Using all the criteria above, you should list up to 10 membership site ideas. Then rank them from the best to the worst. A good way to rank them is to think about your membership site 12 to 18 months in the future. Will you still be motivated to create the content, interview experts, answer questions and participate?
Once you have the niche selected for your membership site, the next step is to plan the content of your membership site…
When I owned the model train membership site I was subscribed to every model railroading magazine available. This gave me a very good idea of what my competition was doing and it gave me a huge amount of ideas for future content.
Membership sites can be set up differently. One way is to drip feed monthly content starting at month 1 (typically used for training) and the other way is to provide information specific to that month (just like a magazine).
Your content needs a ‘stick factor' to keep them subscribed. You want content that keeps them coming back.
Here are a few ideas for your membership site content…
- Core training.
- Expert interviews and articles.
- Monthly newsletter (digital or physical).
- Training videos, audios and articles.
- Member tools like calculators, progress tools, etc.
- Ask the expert questions and answers.
- Recommended resources.
The best ideas for content come from asking your members. They will gladly tell you what they want.
I made this a part of my autoresponder sequence. Every 6 weeks an email would automatically go out to the members asking what they liked, what they didn't like, and what we could do to improve the site. Some of our best ideas came from this feedback… And the members LOVED the fact that we listened to them.
Now that you have an idea of what content you can provide your members, the next step is building your membership site…
How To Build A Membership Site?
The easiest way to build a membership site is to buy hosting with a domain and install WordPress using Fantastico in your cpanel. This is a 10 minute job.
Once you have WordPress installed, you want to install a WordPress plugin called Wishlist Member. Wishlist Member is the awesome plugin that magically turns your WordPress Blog into a full blown membership site.
It creates the login page, allows integration with most autoresponder services and payment services, allows drip fed content, multiple membership levels, sequential content delivery, and so much more. It's easy to install and the excellent tutorial videos make it simple to set up. Watch the video here for more detail on Wishlist Member.
Once you have your basic membership site configured, you will need to integrate an autoresponder and payment processor. My preferred tools for these are Aweber for the autoresponder and Clickbank for the payment processor.
Both are simple to use and provide great support for those infrequent times when things go wrong. This a summary of what you need to build your membership site:
What Does It Cost?
It amazes me how inexpensive it is to set up a fully functional membership site. Considering the amount of technology that is required for all the different integrations and automation, it really is incredibly cheap.
If you haven't set up a membership site before, you may not understand how complex it is, but software like Wishlist Member makes a complex task very simple.
Here is breakdown of the costs to set up and maintain your membership site.
- Domain – $10.69/yr
- Hosting – $11.96/mo (business plan)
- WordPress – $0.00
- Premium WordPress Theme – $70.00
- Wishlist Member – $97.00 (multi-site $297)
- Aweber – $1 for 30 days then $19/mo
- Clickbank fees – 7.5% plus $1 per sale
This totals $190.65 to initially set up your membership site and $30.96/mo plus $10.69/yr to maintain your membership site.
That is a lot of functionality for a small outlay.
Now, let's see how much money you can make from a membership site…
How Much Money Can You Make?
From my testing with different membership sites in different niches, I have seen different cycles with subscribers. But, if I averaged the numbers out over a 12 month period, the following average statistics seemed to apply…
- 33% of members will cancel the ongoing monthly payment within the first 30 days.
- 33% of members will stay subscribed for 3 months.
- 33% of members will stay subscribed forever.
Now, those stats are very general, but if you worked with those as your worst case scenario, you will have a good idea of future earnings.
Here is a great membership site revenue calculator by Scott Boulch, which will allow you to play with a few different numbers.
Let's run through an example…
If your membership site was $27.00/mo and you added 1 new member per day, you would make 30 x $27 = $810.00 in month 1.
In month 2 you add another 30 members ($810.00) but 10 members from month 1 cancel while 20 renew. You would have a total of 50 members x $27 = $1,350 in month 2.
In month 3 you add another 30 members ($810.00) but 10 members from month 2 cancel while 20 renew and 20 renew from month 1. You would have a total of 70 members x $27 = $1,890 in month 3.
In month 4 you add another 30 members ($810.00) but 10 members from month 3 cancel while 20 renew and 20 renew from month 2 and 10 from month 1 renew (10 from month 1 canceled because they had stayed the average 3 months). You would have a total of 80 members x $27 = $2,160 in month 4.
Now you can see how quickly you could earn $4,000, $6,000 and $10,000 per month with a simple membership site, making just 1 sale a day at $27. If you start making 3, 5 or 10 sales a day your income sky rockets… But, you are still putting the same amount of effort into the monthly content.
Please note that to simplify the calculations I have not allowed for commissions paid to affiliates or traffic (promotion) costs. The calculations assume that you would make all the sales yourself, using free traffic strategies. This calculator makes it easy to calculate your returns.
So, now you know how to choose a niche, how to set up your membership site, what content you could provide, what your costs are, and how much money you could potentially make.
Next, you need to know how to promote your membership site…
How Do You Promote?
As a membership site owner, if you are positioned as the publisher, you do not want to be focused on traffic. You plan the content, get the content from where ever you decide, and publish it. Traffic should be left to the people that specialize in traffic generation.
Your focus should be on having the best possible membership site in your niche. By doing this, your members will automatically spread the word and promote for you.
However, you need to do a little promotion in the beginning to get your first 100 members. This will also allow you to test and improve your conversion rates.
The quickest way to your first 100 members is to buy traffic from websites that already have your future customers as readers, or PPC (Adwords, Bing ads, Facebook ads, etc). If you want a great course that shows you how to buy traffic, watch this video.
If you don't want to pay for traffic, but have a lot of time and are prepared to work hard on traffic, then read this post.
Once you have your first 100 members, you will know what your conversion rate is, and can then approach affiliate marketers and joint venture partners. They then do all the traffic generation for you.
This is how I sold over 4,000 model train memberships. I listed the product in Clickbank, made my first 100 sales which improved my Clickbank gravity and average $/sale. This then made my product appear on the radar of some of the best Clickbank affiliates, and then they took over with 100% of the product promotion.
Affiliates became my one and only traffic source…
Now, it wasn't as easy as it sounds. There are ways I recruited affiliates (400+), and I also created a well equipped affiliate center, which made it easy for affiliates to promote my product. But, this is probably something I can provide more detail on, in a future post.
What's The Next Step?
You now know the basics of everything there is to know about building profitable, but simple, membership sites.
You can see the massive potential, the monthly recurring income and the creation of a very sellable asset.
This is the exact strategy I used to build a model train membership site which made over $300,000 in less than 2 years (includes the sale of the site).
I don't know your work ethic, I don't know anything about you, but I believe there is no better business model than creating a membership site, if you put the work in.
Chris Farrell has over 5,000 members paying him $37 per month according to this interview with James Schramko. That's $185,000 per month. Okay, he has affiliates selling his program, so let's say he gets half… That's still $92,500 per month!
I had over 4,000 members pass through my model train membership site, before I sold it for 6 figures.
And if you want more examples click here and scroll down to see the portfolio of membership sites using Wishlist Membership software.
You will be amazed at the different niches people build successful membership sites in.
Hopefully I've got you thinking and wanting your very own membership site.
If you have any questions, please ask away in the comments below. If you have any feedback or comments, please leave them below. If you have any family or friends that can benefit from this information, please share it with them.
Let Me Help You
If you've got excited about owning your own membership site, and like the idea of recurring income and a big pay day… I would like to help you.
I'll get on Skype with you (one-on-one) each week and help you through every part of the process.
I'll help you choose a niche, plan the content, engage experts and help you build your membership site.
I'll then help you get your first 100 members and recruit top affiliates.
AND… I'll even help you sell your membership site, once it has some history (I sold my model train membership site for 6 figures).
With me to hold you accountable, with my experience guiding you along the way, imagine what success you would have in 12 months time?
Your investment for one-on-one coaching would be $497/month.
But let's put that investment into perspective.
My results were $359,515.79 in 23 months, from a model train membership site.
Now, I don't know you. I don't know your work ethic and I don't know your level of perseverance. So, I can not guarantee you will get a similar result.
You could do worse, or you could do better.
But… Let's say you needed 3 months of coaching to establish a great membership site. Your investment over 3 months would be $1,491.
Plus, we need to add the $190.65 cost to build the site, plus $30.96/mo maintenance costs.
Your total investment over 24 months would be $2,424.69
And, let's say you did really badly and only made 25% of what I made with my model train membership site.
$359,515.79 x 25% = $89,878.94
That sounds like a great investment of your time and money to me. Like I said before, there are no guarantees though, because it depends on you actually doing the work.
The secret is in having someone that is experienced (and has achieved the results) to keep you motivated, and on the correct path, to achieve the recurring income you deserve.
Think about it, and compare it to the results you have achieved from internet marketing in the past.
I am here for you and would love to help you. If you are keen to go ahead, the coaching offer is below.
P.S. You may be wondering why I would coach you, when I could make a lot more money building membership sites for myself. And, the reason is that I absolutely love teaching how to implement this stuff… The best part is watching other people's lives change, as their entire month's bills are paid from the first week of subscription payments in that month… It's exhilarating, it makes me feel alive, and I work hard to make sure the client achieves their goals.
Now, I'll be the first to admit that because of the thrill, I tend to over-deliver in a massive way. And, because of this, I have to limit the amount of people I can coach on a one-to-one basis to 10. I just can't handle any more. The buy links below will become inactive when I am at full capacity. So, if you are thinking about taking me up on the offer, please don't delay… This is going to be fun and profitable for you.