5 reasons NOT to start a Membership (… and what to do instead)
I’ve been talking about memberships a lot just recently, what with my video My Membership Story a couple of weeks all about my transition from a 6-figure high-end mentoring programme to a low monthly investment membership instead. And then more recently my conversation with my own membership mentor Stu McLaren where we got to talking “All Things Memberships.”
Now I’m obviously biased about memberships. It’s the business model I’ve chosen to be at the centre of my own business and that feels light and easy for me to run compared to the model I followed for the previous 4 years.
I’m also biased about Stu McLaren, since he’s the guy who has taught me most of what I know about running a thriving membership community (this is also why I’m an affiliate for his Tribe Course this year).
However all this talk about memberships has prompted a few questions from people about whether it would be right for them, so I thought I’d look at memberships from the other perspective – because a membership is not right for everyone. And even if it is right for you, now might not be the right time.
So to balance my enthusiasm here are 5 good reasons NOT to start a membership – along with some suggestions for what to do instead.
1. Hardly anyone knows you exist
If hardly anyone knows you and your business exists then it’s going to be difficult for you to launch a thriving membership. To launch any sort of group programme you do need people who love what you do, and have chosen to stick around and learn more from you, and are interested in saying “Yes please!” when you invite them to join your membership. So if you don’t have people on your email list, in your free Facebook Group or following you on social media you will struggle to get decent numbers to join at the beginning.
For example if you’ve got a mailing list of 100 and 25 people in your Facebook group you are simply not going to have 500 members the first time you launch – the numbers just don’t add up. And it’s this misalignment of expectations that causes a lot of people to launch a membership, then close it again in frustration a few months later.
What to do instead
If you know you ultimately want to launch a membership, then it’s well worth you focusing your attention on building an audience or following first. Ideally alongside working 121 with clients to build up your reputation, experience and confidence and give you an income while you do it.
Be careful not let yourself get overwhelmed by the idea of growing a community interested in what you do – or frustrated if you think things are not happening quickly enough! Start by choosing just one platform and learn to do it well, methodically and consistently. Whether that’s Facebook, Instagram, giving live talks or collaborating with other business owners. Small actions taken consistently will yield you the best results in the long term.
However you might decide you just want to get started, even with a small following, and plenty of my clients have done this. What matters is not how big you start, but that you do it with your eyes open knowing that if you have a small audience you will be starting with a small membership – but if you are happy to start small, learn as you go, and collect testimonials that will help you inspire many more people to join in future, then go for it! At least you are on your way!
2. It doesn’t excite you
This one should be pretty obvious, but if you are not excited by the idea of a membership then you shouldn’t do it.
We are not all cut from the same cloth. My first business model was an online programme selling into a high-end mentoring programme as the next step in the journey. Now it’s the same online programme but instead of the mentoring programme the next step is a membership.
The membership model excited me because of the possibility of reaching and helping so many more people and because of the community I’m creating, which warms my cockles. It’s so wonderful to spend my working days surrounded by and adding value to all the generous, warm-hearted souls who hang out inside the Business from the Heart Community.
The affordability aspect also feels really good to me. A low monthly fee means that even the earliest stage business owners can get the help they need when they might not feel ready or trust themselves enough to make a much bigger investment. It’s also great for more established business owners who might have lost confidence and are nervous about making a big investment.
What to do instead
If a membership doesn’t excite you that’s not a problem at all, it just might not be right for you! Instead take time to research and learn about the different business models so you can find the one that’s perfect for you. I’ve worked with many clients who love nothing more than working 121 with clients and that’s all they ever want to do so and they’ve designed their business that way. It’s totally do-able as long as you structure it and get your pricing right to make sure it’s viable. Alternatively, you might thrive with a high-end transformational, mastermind or retreat based programme where you work with just a small number of people each year but at a higher price point.
3. You want passive income
One of the really great things about a membership is the recurring revenue.
When you sell 121 or an online programme once you’ve sold it or launched, you need to start thinking about selling the next thing. Even if you launch once or twice a year and it’s pretty predictable, it can still be stressful because if something goes wrong you have a lot riding on it. It’s very “all the eggs in one basket”. So this is the advantage of recurring revenue – money coming into your bank account every single month.
But don’t make the mistake of confusing recurring revenue with passive income. Because there is nothing passive about a membership.
You see, there is only one reason that recurring revenue comes in each month – it’s because your members have decided they want to stay on for another month. And another month. And that only happens if you are there serving them, taking care of them, making sure they are engaging with what you offer and are getting what they need.
A membership is definitely not a “set it and forget” it business model.
What to do instead
First be wary of people selling you big promises of money on auto-pilot. There are almost no business models that are truly passive. But if you want to make maximum money in the online world without having to do a lot of delivery then consider affiliate marketing (marketing other people’s courses or programmes). You do the marketing but the sales and then the delivery of the programme is done by the person running the course.
You could also sell an online course via an automated “evergreen” sales process and include no live support. If you pay someone else to run Facebook ads for you that’s probably about as hands off as you can get in the online world! However be aware you can only automate something that already works, so I recommend you make sure your webinar, video series or sales process is giving you consistent results before you try to automate. Also, if you are anything like me you may not feel fulfilled by a business that doesn’t involve direct contact with and feeling you are actually serving and making a difference to your clients.
4. You don’t want to serve your customers all year round
I love the community aspect of my membership. When I ran an online programme, it would break my heart a little when it came to an end and people had to leave – I had a yearning to stay connected to people and keep supporting them over the long term. So I love the fact a membership doesn’t come to an end – it’s one of the things that makes it perfect for me. There is also something that feels very grounding for me about having a programme that runs all the time, and revenue coming in all the time. My old business model was a lot more stressful!
However a membership does mean you are running your programme all the year round – unlike with an online course that you can run just once or twice a year. And depending on your personality and other commitments this might not appeal to you.
What to do instead.
If you don’t want to work with your customers all year round then your options include 121 programmes where you don’t do any client work at certain times of the year (yes, you can totally do this – this is your business so you get to set your boundaries).
Or an online programme that you just run once or twice a year. But if that’s your plan make sure you are reaching enough people with your marketing so that your launches will comfortably bring in the revenue you need for the rest of the year.
However just because your membership runs all year round doesn’t mean YOU have to work all the time – the way my membership is structured I can easily take off 2 weeks at a time and if I wanted to take longer I would invite a guest mentor to cover some of my live sessions – my members would probably love that if I chose the right person! I also pause the live elements over the Christmas break so we can all have a period of downtime – so you can make it work for you too.
5. You need money urgently
Unless you’ve already got a big audience and you are going to launch with a healthy revenue right out of the gate, a membership probably isn’t going to bring in the big bucks quickly – it’s more of a long term game and your membership will grow gradually over time.
There are 2 reasons not to start a membership if you need money urgently:
First, your membership could become a distraction to growing your business. If you get started with low numbers then the need to serve those members could take up valuable time when you could be marketing your business or bringing in larger chunks of revenue from other activities.
Second it can take time to grow your revenue. The exciting thing about a membership is that if you get it right it is incredibly scalable and you can be bringing in a lot of revenue. Imagine just 200 members paying £49 per month – that’s over £9,800 every month! But depending on the size of your audience or following you might start out with less than £1,000 per month. So before you launch take time to get clear on what you would need it to bring in to feel exciting for you, and also figure out what you think is realistic to begin with. Then ask yourself if that feels like a really useful extra income stream that you’ll enjoy delivering on, or an extra burden of delivery that won’t feel worth the trouble.
What to do instead
If a client needs money urgently I always recommend that they start out with 121 work to give them a flow of revenue. If you are coming from a standing start with no following it is much easier to attract and sell to just 2 people at £1,000 each, rather than find 40 people at £49 each to reach the same revenue. I also believe it’s easier and less stressful growing your membership when you’ve already got a solid income stream in place.
On the other hand a membership can be a great source of 121 clients. It’s the people who already love what you do and are getting massive value at a lower price point that are more likely to step up to make a higher investment to work with you more closely. For example last time I opened for places for private clients 80% of the applications (and 100% from those who enrolled) came from people inside my membership – and they were already 95% decided before we even spoke!
So there is also an argument for starting a small membership, in the conscious knowledge that you are starting small but using it strategically as a way of nurturing people ready for your next level – and a lot of people choose to do it that way. Then in time as the membership grows you might choose to give up the 121 work completely to focus on it full time.
If having read all this you still feel drawn to a membership model then then here some next steps for you:
Sign up for this free workshop series (starting 21st April)
My membership mentor Stu McLaren is starting a free online workshop series from Thursday 21st April where he’ll map out the exact blueprint for transforming your existing knowledge and passion into recurring revenue.
In the 3 part workshop he will:
- Walk you through how to quickly evaluate whether your market would be a good fit for a membership – after all there’s no point heading off and doing all that work if it’s not going to work for you.
- Share a lot of examples of different membership sites in all kinds of different markets, so you can get a feel for what could be possible for yours – I know your brain will be popping with ideas!
P.S. The workshop is free. However, it is only available for a short time. So if you’ve ever thought about creating a membership site, click here to register.
P.P.S. I am an affiliate for the Tribe Course because it has such a positive impact on my business. This means that if you watch Stu’s workshop series via a link in this article, and later join the Tribe course I may receive a payment.