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Fixed Term or Forever Profits?

You’ve decided to set-up a continuity income. You have decided this, haven’t you (or I guess you could keep trying to make a living by selling one product at a time)?

The next big question is what kind of membership should you create?

Should it be a print newsletter/CD/DVD of the month, a traditional membership site, or a fixed term membership?

Each of them have advantages and disadvantages to think about.

Click here for more information on setting up your first passive membership income…

Method #1: Monthly Physical Item.

For example a physical product delivered each month has the advantage of higher perceived value and the feeling people get of having it in their hands. I’ve had many people tell me how much they look forward to getting my print newsletter in the mail. They open it up, read through it completely, then set it on their desk for later reference…or to go through it multiple times.

Another advantage is that this is often actually easier to manage than a membership site. You’re creating something offline and then mailing it out. Both www.Click2mail.com and www.Kunaki.com could be used to automate different items. Just upload your item and your list. They mail for you.

The primary disadvantage is these items INCLUDE YOU. People aren’t paying to have content created by others. They’re buying not only the information but the experience with you. In mine, I recognize it and that’s why I chose the name (Monthly Mentor Club) as it really is the same information I want for my coaching clients – and does become a reference for them.

You have to make sure you LOVE the topic and are constantly researching it. This method’s biggest weakness is YOU have to produce content for it every month. You can’t slack off and miss a few months (unless you’ve produced ahead of time).

Method #2: Traditional Membership Site

The tools for membership sites are easy now. You can use WordPress as a content manager. Then install one of many membership scripts to handle your site’s password protection. Combine in a community feature such as a discussion board and you have everything technology wise you need to manage the site.

The big advantage here is you can use the community element (discussion boards) to make members feel a part of something bigger. It is painful for them to cancel because they lose the relationships they’ve developed through the site. That’s a key principle of retention in any site. People have to feel like they’re missing something or losing out when they cancel.

The disadvantage here is someone has to regularly monitor the site and the discussion board. You need moderators (moderating it all yourself takes too much time especially in the beginning). You also have the disadvantage of needing regular content, although it isn’t required for you to produce the content. You could potentially outsource all content development for this type of site, BUT members DO build relationships with the content producers. So your best case scenario is when you have long-term writers.

Method #3: Fixed Term Memberships

Instead of a “lifetime” membership, you’re simply putting together a site for 3, 6, 9, or 12 months. It’s an “online class” type of atmosphere instead of a forever membership site. The first method followed for this are email lessons delivered through an autoresponder. When someone buys, they’re added to the autoresponder. When they cancel, they’re manually removed from the autoresponder. Each autoresponder message points them to a specific lesson in the series on your site.

A 2nd method for handling this is through membership scripts such as Amember which allow you to schedule content delivery. So if someone has been a member for 1 month they have access to specific info. Someone who has been a member for 3 months has access to more content.

The big advantage of this method are that you only have to produce content (or pay for content) for a limited time class. If you have 12 months, then you may produce a total of 52 lessons (one per week). You’re not committing yourself to produce something in the market forever. So you never feel tied down to one subject or market.

In addition, you’ll often find it EASIER to sell this type of membership. People aren’t making a commitment of $50 a month forever. They’re just committing to a specific class period. In addition, you’ll find it easier to keep them inside the membership longer. For a normal membership site, they cancel…and then they come back at a later period to continue where they left off. With a fixed term site, you set it that if they cancel…they have to START ALL OVER. That’s a strong incentive not to cancel built in.

What Should You Do?

If I was starting over and producing my first continuity program ever, I would go with the fixed term membership.

You may decide you don’t like creating content for the subject continually. In addition, if it doesn’t work out as well as you thought it would, it’s not as big of a commitment that you’ve made for the site.

The biggest objection most people have to doing “only a fixed term site” is they want to continue earning money forever from the site.

What most “gurus” won’t tell you is the average retention of membership sites is only 3 to 4 months. YES, you do have members who stay for years (my print newsletter has many subscribers from the very first month). But those same members who stay for years could have been sold into something else at the end of the fixed term. They paid 12 months for your fixed term site. As you’re coming to the end, sell an “advanced” version or some other type of product. If you don’t want to produce it look around for another quality site to offer to your members as your term is running out.

Less long-term commitment. Easier to sell (since it is a fixed term). Easier to manage. Eventually passive income (once all the content is produced).

That’s why I’m suggesting that type of site first. Then expand into other types of sites if you like later on (or maybe you’ll just start producing dozens of these types of sites for multiple passive income streams).

For more information on membership sites, and making money with them, check this out…

Written by Terry · Filed Under All 

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Comments

5 Responses to “Fixed Term or Forever Profits?”

  1. Kevin Dawson on January 20th, 2009 12:45 am

    Terry,
    I really like option #3. Especially in this economy, with people tightening their spending, I truly believe a fixed-term IF it’s short enough seems less intimidating than an open-ended commitment.

    I incorporate that to a small degree in my email copywriting service. I offer a two-month trial – and if it goes good, we continue month-to-month afterward. But at the end of those first two months, it does not continue unless the client specifically wants to do so. The default option would be to discontinue.

    I’ve also found provisions in payment providers and gateways for fixed-term “subscriptions,” too. This automates it, so I don’t have to chase clients for payments – a HUGE hassle.

    Thanks for this post. I don’t often conceptualize my services as a “continuity” program. But once I do, it opens many new strategies to me.

  2. Terry on January 20th, 2009 7:43 am

    Hi Kevin:

    Thanks so much for your input. I was thinking about adding in the idea of services as well so I’m glad you did so. For example, I don’t really do any one session consulting anymore (at times I will take an all day one). My coaching is a continuity program. You’ve done the same with your email copywriting service it sounds.

    Other services could have a similar subscription service (designers, affiliate managers, article writers, etc.). By getting people committed to a subscription they get rid of those ups and downs of income.

    Terry

  3. Article Spinning on January 20th, 2009 10:40 am

    One thing I noticed with membership sites is that it does take a TON of time to keep updating what you promise. And when I say a TON of time, I mean that. Like you advised, one has to be very passionate about a particular subject or service to get into the membership model. Many feel it’s just better (and less stressful) to write an ebook/course that sells one-off, rather than a membership service. Anyway, thanks for sharing, Terry. It’s a wonderful article, as usual, :)

  4. Sarah Cook on January 20th, 2009 2:33 pm

    For content, consider hiring a stay-at-home mom. You can probably pay them, say $20-30 to write create content each week or month for you. It gives them spare change, and frees you up.

  5. Jack Keifer on January 20th, 2009 8:13 pm

    Enjoyed the post Terry… Wonderful & inspiring! I agree, the fixed term would be the most appealing model to me as well. Another advantage to this model is that it could easily apply to audio CDs or videos of some sort as well.

    One could then expand on the fixed continuity concept by using the individual components of their membership content as separate products in themselves. These could then be used to upsell one’s clients to the fixed-term membership site.

    As a result, you have multiple product sites producing cash flow & funneling traffic back to the membership site at the same time. Now I’m going to get busy and put your inspiration to work! :)

    -Jack

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