I keep hearing the same noise from online digital course creators and experts...
"I want recurring revenue.."
"I need a membership program so I can serve my audience more often..."
"I wish I could stabilise my income better..."
And let me tell you before you read on, membership programs are NOT the answer!
If you have a big audience and you want to capitalise on it properly, here is what to do.
Firstly, let me cast my mind back to when I used to run a low-ticket membership and subscription program many years ago for online guitar teaching (this is where I started out my online empire).
I had created the BEST f&%king guitar teaching content you could find online for $29/pm. I felt so proud of myself for bottling 30 years of playing an instrument into an online resource for NEW or on going guitarists who wanted a library of amazing step-by-step how to videos!
But it wasn't the case!
I can honestly say it kept me broke.
You’re constantly dealing with churn 😭
People jump on board and then want to leave in 1-6 months.
I think I read somewhere that the average stick rate in a membership is 3 months 😟
It makes sense on paper.
Having someone pay you $29 forever is great.
Only that it never happens in real life (and I learnt the hard way).
Unless you sell a software or application, or you are Netflix or Prime... Truth is people truly depend on for their life and business with recurring income, but don't realise that most people will try out your membership and then decide to cancel pretty soon.
1) Sell your membership as a yearly pass instead of monthly subscription... 🙃
And not going for the monthly options burning the churn!
Treat your membership like a 1-year long course (my friend Rachel Miller does this and it works amazingly well for her business).
People pay to get access to a whole year of membership and they can pay in full upfront, just like any online course & coaching program. And when the yearly subscription is up, they can renew or choose not to for what ever reason.
And to make it more attractive for your customer, you can charge several hundred dollars for an offer like this too, and anything up $997 is actually average these days for online training.
Remember, this is no different than selling a course... Instead of monthly churn trying to keep customers happy to stay for longer than 3 months, you can concentrate on keeping your members happy by providing better community style content.
Back to my friend Rachel Miller, she updates the content to her course once a year. She adds new content and trends for her niche, plus extra new bonuses. Existing students can re-enrol to the new version of the course (I think she offers a 60% discount), and NEW customers enrol at full price for a year's subscription. She even drips the content too, just like you would for a membership site.
And the clever strategy for running a yearly subscription is you get to stack your launch revenues from previous launches across the whole year (more on this below)!
(a launch is a webinar, video series or a challenge etc...)
So by doing a yearly 'course' subscription, you’ll make MORE money than if you sell the membership monthly.
(Because of the churn, remember…)
2) One thing to keep in mind is that an online membership is no different to an online course that comes with community and on going extra support. The content you decide to teach in a membership would be the same you'll be teaching in a course. And to sell a membership is done exactly how you would sell a course too.
And this is how we bring in recurring revenue: You run big launch for your course (2 - 4 times per year), and for your customers who can't afford the yearly payment up front, you offer a payment plan that is more affordable!
This is HOW you get recurring revenue that you want for your business and payment plans work a lot better than memberships.
A payment plan isn’t a subscription that can be canceled anytime but rather a commitment to a fixed number of payments.
Imagine if you did a launch for an online program priced at $997 and you offer a payment plan for 10 x $97.
If you sign up between 50 - 100 NEW customers, then you have instantly injected $5,000 - $10,000 monthly from a payment plan (assuming all your customers took the payment plan over one time yearly payment).
The other BIG benefit is that $97/ pm programs will perfectly feed customers into your high end products & coaching programs. Whereas with memberships it is a lot harder to convert your students to a higher program.
Now of course some people drop off or default?
But the stick rate is way higher and there’s way less churn.
Businesses always forget about existing customers, and instead keep focus on bringing in new customers. WHY I ASK?
If they knew the big benefits with this model where you keep your customers for 10 months with recurring revenue, and this gives you an even easier method in filling your high ticket programs with your existing paying audience, you would focus on your customers more, right?
The other BIG factor with a payment plan vs a monthly subscription plan is your average payment duration will likely be 7-8 months instead of just 3 months.
So you make a lot more money.
And what happens when 7-10 months of payments stop, you ask?
>> You will need to run another launch before that happens.
Here is a brief example of what your monthly recurring revenue could look like:
January you bring in recurring income of $5,000/ pm
July you re-launch and do better by adding an extra $10k/ pm on top of the original $5k you are already earning. This making your monthly income a total of $15,000 /pm until October.
November you run another successful launch and bring in new revenue record of $15k on top of the $10k you've earned from July's launch... and so on and so on!
And this method is far more profitable vs membership programs.
And to sell your membership programs you will most likely run a webinar or a challenge.. Or run an event to your audience inside your communities and groups.
There is NO difference in HOW you would sell your online program vs a membership.
There is NO difference in the content and training you would be offering either.
The ONLY difference is one is easier to earn monthly income, and the other (deemed as the golden monthly revenue pot of money), is actually incredibly hard to stack!
You could make this work if you have a smaller priced program at $200, and with your customers only paying you $20/ pm for 10 months, it makes it very affordable. But low pricing becomes harder to scale, and it takes a lot longer for you feel your time is being best spent with an audience who are paying $20/ pm. However more regular launches or running an evergreen launch would suit this method at a low price.
💡 My tip: Try aim for $500 at the very least for your yearly subscription because on average your customers should be able to afford $50/ pm. But you MUST charge what you feel is the perceived value of your training. If you have a program that is worth $10,000, and your customers can easily afford $1,000/ pm for 10 months then what is stopping you from charging that. DO NOT undercut yourself.
Good luck, and have fun creating your monthly stacked income from product launching & yearly subscription method.
Are YOU trying to figure out what blindspots you might have about your existing market or what might be the biggest challenges your audience and perfect people are facing?
Or perhaps you are trying to figure out what might be missing in your existing product, or why people might not be buying your existing product.
>> This is where my Digital Agency can help you overcome these frustrations and provide you with all of the above and MORE!
Jump on a call with me this week for a free consultation call and lets see if we can help you in any sort of way :)