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.
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).
- Which Membership Site Will You Start?
- Your New Membership Site in 2009
- Membership Sites and Valuable Content
- Rebilling Nightmare
- Continuity is King