Building a Sustainable Recurring Revenue Model

Tutorial Part 1 [video_player type=”youtube” youtube_force_hd=”hd720″ width=”640″ height=”360″ align=”center” margin_top=”10″ margin_bottom=”20″ border_size=”4″ border_color=”#DDDDDD”]aHR0cHM6Ly93d3cueW91dHViZS5jb20vd2F0Y2g/dj0tbmhxYUhvWXAzRQ==[/video_player] Tutorial Part 2 [video_player type=”youtube” youtube_force_hd=”hd720″ width=”640″ height=”360″ align=”center” margin_top=”10″ margin_bottom=”20″ border_size=”4″ border_color=”#DDDDDD”]aHR0cHM6Ly93d3cueW91dHViZS5jb20vd2F0Y2g/dj1JN0sxNl9pY0ZqVQ==[/video_player] In this week’s tutorial, we discuss how to develop a sustainable, subscription-based business model for membership sites in any niche or industry. My approach is based on membership models that I value, those that have reliable returns and scale well. If you have a membership site in the informational marketing space, following such a model is about as good as it gets, though there are many a pitfall to avoid in the process. By the end of this video blog, you’ll have key tenants for building a successful model, as well as insight into the most common errors that I see made on membership sites.

Paid Content

To start, what validates paid content? If you’re selling educational material in the age of YouTube, then you better have a valid reason. At the end of the day, content by itself has a limited worth due to the fact that so much is available for free online. If you want people to pay for content or membership-based programs, then I believe the following models are the best modes to consider
  • Niche specificity
    • You may have enough expertise or hone in on a particular need that goes farther than most other providers can delve. For example, I have a colleague who knows an information marketer in the aromatherapy industry who knows the ins and outs of specific benefits for a particular market, and makes 6 figures a year doing so. Having a “niche-enough” approach may be enough to validate a degree of membership.
  • Curriculum/Consumption
    • Although the world of Google and Youtube can provide information quickly, customers don’t always know how to use this information – which is where you come in. You may not have something very specific, but if you have a tried-and-true curriculum – one that’s digestible and encourages behavior change –  then you may have something worth selling.
  • Community/Coaching
    • If you’re able to offer community or coaching, you may be able to attract enough members who are looking for personalized content and targeted Q and A sessions. Many membership sites may also offer the opportunity for members to learn from a larger online community.

Types of Content

  • Video, audio, written
    • Video has the highest perceived worth, though audio and written have their place. Unless you’re selling financial information or some kind of medical journals, written articles by them selves have a low perceived value in context.
  • Personality vs. Company
    • Are you basing your membership site on personality or speaking from the voice of a company? Often, a solo founder will base the programs, content, and membership area around their knowledge, in which the business really becomes about access to a particular guru. On the upside, this is a relatively low-hanging fruit; however, such an approach does not build a  real scalable or salable asset. Tony Robbins (for whom I have immense respect) may be close to a billion in net worth, but he can’t sell his business to too many other people with great success. If you plan on having the option, I tend to lean in the non-personality  specific.
  • Member interaction
    • Member forums are difficult to build for free, let alone when you have a paid site. It may be worth considering if you have a high engagement group and enough to get the ball rolling at start, but I would never venture into the domain of a membership site that is dependent on member engagement.
  • Buffet vs. modular releases
    • Do you want people to sign up and have instant access to the totality of a library, or do you plan to open up particular sections of content over a specific period of time? I tend to do the latter, because I like to build a succinct curriculum that gets rolled out across new customers, offering a particular kind of experience. This also implies that once I’ve filmed 14 months of material (or paid others to film), that no additional content need be made. Keep in mind my preference is just one extreme on a spectrum of possibilities.
  • “Fresh” material
    • If you (the owner) has to manually update content all the time, you’ll quickly realize that this is difficult to do, especially when a site is new and young and most of that time should be spent on marketing. For example, if you commit to members a live webinar at 6 o’clock every Wednesday, you’ll find that unpredictable events will arise for both your members and yourself, making the model difficult to sustain. Be wary of what you commit to for fresh content regimens. Think through who is going to handle content delivery and how it will be done. Are you potentially selling a real business with real value or a small hamster wheel that you need to spin yourself?
  • Coaching/Consulting
    • In general, the same idea as that above for fresh material applies. A membership site dependent on coaching/consulting doesn’t can quickly pinhole you into a corner if not well thought out.
  • Sold “Flat” vs. with Premium
    • A flat sale is something sold in and of itself at a particular price – “$27 this month, $27 next month”, etc. A premium is something offered for free on the front end of a membership – say, a football-shaped phone for a three-month subscription of Sports Illustrated. Many information marketing spaces will have a difficult time selling flat continuity, and premiums may be a good bet for those selling e-learning, curricula, and similar content.

Common Errors to Avoid

  • Built without customer ideas
    • If you’re constructing a membership site, you need to know what will serve your audience best – don’t build something that people don’t actually want. Yes, it requires some digging and ground work, but finding out what your audience wants – through polls, cold calls, etc. – will pay off in the long run.
  • Personality dependent
    • Again, constructing membership sites around a specific personality poses a challenge for handing over the reins later on. If you have no interest in selling, then there’s nothing wrong with this approach. If you think you might, go with a company voice.
  • Unjustified “live”
    • If you do not have a huge audience, or your audience does not depend on mutual engagement, but you’ve committed to doing live offerings that don’t really add value to the customer, but instead add a sizable workload to you, then you may find yourself burning out prematurely. Think carefully about your live commitments from the beginning.
Now that you’re armed with a few ideas around the dos and don’ts of building a membership-based recurring revenue model, I hope you’ll carry forward with new insights and inspiration. Leave a comment on the CLVboost blog or YouTube channel with your questions, comments, and successes – we love hearing from our subscribers! -Daniel Faggella CLVboost Founder    ]]>

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