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The Truth About the Membership Site Model

Membership sites or continuity programs (same thing) are very popular among Internet marketers. In certain circles it’s almost mandatory to have some type of continuity program to add as an upsell to whatever the latest product is, that you’re launching. And of course, there are also tons of product about how you can get incredibly rich by creating membership sites.

But among all the noise, what is actual fact, when it comes to the membership site model? To find out, I decided to create a survey.

Here are the results:

Survey Results Video


Note:

The questions in the survey concerned information-based membership sites. The same results do not apply to software/service based products with recurring fees (e.g. hosting, autoresponders etc.).

The Membership Model Lie

When you look at how-to-make-money-with-membership-sites type products, there’s always one big fat lie they perpetuate and that’s the idea of never-ending payments from each member. Inevitably, these products will have some bogus calculation on the sales-page, showing how much money you can be making if, say, 100 new members join the site every month. After a year, that’s 1200 paying members, right? And it just keeps getting better!

Except that it doesn’t, of course, because no one stays a member forever.

In fact, what you need to consider with any type of product, product line or membership is the customer lifetime value.

If you have a series of products for $50 each and your average customer buys 2 of them, then you’re looking at a customer lifetime value of $100.
If you have a membership site for $30/month and on average, each member stays for three months, you’re looking at a customer lifetime value of $90.

That’s the reality of a membership site. You’ll have a certain, average “stick rate” and with it a certain total average income from each new member. The income is simply spread out over a longer period of time.

Membership Pros

Having said that, there are also some advantages to the membership site model, if it’s done right, as mentioned in the video.

From a marketer’s perspective, I’d say an info- and community-based membership makes sense as an addition to a product range, because you can win over the smaller segment in a market that actually prefers this model over the one-time payment model. It’s probably best placed as a back-end offer, rather than an upfront offer. And most vitally, you need to really take care of the members, keep the site fresh and relevant and not join the ranks of sites that end up being a disappointment for it’s customers.

All the best,

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Shane
 

I'm Shane Melaugh and I'm the guy writing most of the posts on this blog. My goal is to provide you with useful, straight-forward insights on how to grow your business by creating compelling offers, driving traffic and increasing conversions.

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