5 Reasons to Start a Membership
As I discussed last week in my blog about business models, these current coronavirus times are prompting a lot of people to reflect on and make changes to their business model. In particular we are seeing a lot more people pivot to find more ways to serve their clients online.
There are of course lots of ways you can work with and serve people online – 121 via zoom, online workshops, high-end group programmes, online courses, memberships and digital products.
Over the past 9 years I’ve tried my hand at all of these – and I had success with all of them in financial terms – but the one that has ended up to be the “just right” business model for me is the membership model.
I want to share with you 5 reasons why you also might decide to start a membership (and if you feel drawn to this in the way I did then I’ll also let you know how you can get started – by learning from the guy who taught me everything I now know about how to create, launch and grow a thriving membership. (You might also enjoy this article/video about my own transition from a 6-figure high-end mentoring programme to a low monthly investment membership: The Story of How I Started a Membership.
Here are 5 reasons why YOU might decide to start a membership:
1. Recurring Revenue
I think this is the most important one to talk about as I write today, mid coronavirus-shutdown. A time when a lot of small business owners have seen a direct impact on their revenue – in some cases revenue has stopped completely for a short period of time. And of course even in “normal times” lots of small business owners struggle with ups and downs in their revenue which can make it difficult to plan or think strategically. For example, I have a client who frequently does £8k months, yet not consistently enough for her to feel confident about hiring someone to support her, even though it would help free her up to bring on even more business.
A membership gives you recurring revenue because your members are paying you a monthly amount, month after month, so you have a fixed and relatively stable income that you can rely on each month. This enables you to take holidays, allocate time to focus on “passion” projects and hire team members knowing that you can afford to do it.
Of course, your membership revenue is recurring, not “fixed”. People do cancel their membership – that’s the very nature of a membership, it’s a month by month subscription. However even if you have a cancellation rate of 10% (industry average) you can still forecast what your revenue is likely to be each month. And you will also be regularly inviting new people to join to replace those who leave, so once you’ve built it up, maintaining a stable revenue over a 12 month period is pretty straightforward. And you can use sales strategies like launches to grow the revenue even further.
Interestingly, recurring revenue was NOT the piece that attracted me to start a membership, probably because I already had a healthy income stream with my previous business model and I was good at managing my money. But I don’t exaggerate when I say that the security of recurring revenue month on month has been absolutely life changing for me. Yes, life changing not just business changing.
And when the coronavirus hit I discovered that it was the greatest insurance policy I could have had. I’ve also been taken by surprise because I haven’t had a significant increase in cancellation requests, which is what I braced myself for at first. In fact, I believe that the members are valuing the membership even more right now at a time when they might be worried about money and making larger investments, knowing they can get business support, training, advice and mentoring, plus the support and love of the community to help them pivot and thrive during these times – for less than £50 per month.
For me this was one of the biggest reasons I decided to start a membership. Before the membership I had 2 main ways of working with me – an online programme for £995 (discounted during launches) and a 12 month mentoring programme for £5,000-£10,000. I would work with, and support beautiful heart-led business owners to get clients and get their businesses off the ground for 8 weeks and during that time would come to care about them and their success. Yet at the end of the 8 weeks unless they stepped up to the higher investment I had to stop working with them. This feeling of “people leaving” always pained me as I knew I had so much more I could offer them beyond the online programme.
For me the biggest driver and the greatest fulfilment (apart from seeing my members get results of course – that’s always the number one for me) is this ongoing community of wonderful business owners, many of whom call it their “business family”, none of whom ever have to leave because they “can’t afford it” (the £50 per month is more than covered by the extra results they get in their business, and the extra confidence they feel).
3. You get to help more people
Now, we are all cut from a slightly different cloth. I have many clients and business friends who thrive on working with very small groups of people at a much higher investment. But for me, when I ran a high-end mentoring programme, and when I work 1:2:1 with clients, much as I love the individual clients and seeing their success and progress, there is always a nagging sense for me that I’m just not reaching and impacting enough people.
If you are like me and recognize that you feel called to impact hundreds, or thousands or millions of lives then if you try and fight it and build a “high-ticket” model because someone has told you that’s the best way to make your business work, there will always be a part of you that feels unfulfilled and that you are not living your purpose. This was totally my experience and I’m so glad I followed my heart and made that switch (if you want you can read how I made that switch here).
If that’s you, the beauty of a low monthly investment membership model is that you get to help and serve hundreds, maybe even thousands of people all at the same time.
Now naturally there are things you are going to have to learn to enable you to do that, like how you translate work you’ve maybe only done 1:2:1 up to now to be able to impact hundreds of people at one time in the same way – but this is all part mastering how you create transformation through a membership, and it’s totally learnable – and if I learned it, then so can you.
4. It feels light and easy
Now before I get into this I want to highlight that this is one of those points where it could be argued that this is my “stuff” and I should really have done the “inner work” on it rather than choosing a business model that lets me off the hook. And to that I say “fair enough”. But here’s the thing – sometimes we have blocks or unhelpful beliefs that hold us back in a big way and we really have no choice but to do the work (like when I had blocks to creating video for my business and invested in doing the work and shifting my fears). But there are other times where, quite honestly, life’s too short to keep working on the next layer of the never-ending onion – and instead of fighting who we are we can find a business model that just feels good as it is – no inner work required!
To me a membership model just “feels light”. I get to serve a community of business owners who I dearly love and care about, and I get to use all my knowledge, advice and wisdom built up over 9 years of running my own business and growing into the person I am today to help them get results in their businesses.
Yet I do all of that that without the sense of “responsibility” that I used to feel when people paid me £5,000-£10,000. Especially if they could barely afford it and in many cases had borrowed money to do it. I often found I felt more committed to the success of my clients than I was to my own success – I would be doing the washing up after dinner, or in the shower thinking about “how can Rachel fill more places on her workshop?” instead of thinking about how I could grow my own business. Now you might think this is good for the clients – and of course it was, no surprise why so many of them got such great results! But in the end it wasn’t so good for me.
The lower cost nature of the membership means that I can “give fully” of myself but within boundaries that feel entirely appropriate to the level of investment people are making, and I find it so much easier to maintain those boundaries than I did at the higher price point.
My stuff? Yes! So I want to stress that this on it’s own is not a good reason to set up a membership! If you have issues with over-responsibility and lack of boundaries and you feel called to work with people in small groups or 1:2:1 at a much higher level of investment then my message to you is:
Follow your calling – and “do the inner work!”
If a higher-ticket model feels more exciting and true for you don’t allow your inner stuff get in the way and let you off the hook.
5. As a paid nurture funnel
Another reason the membership model works so well for some people is it because it acts as a beautiful “paid nurture funnel” into their higher level programmes.
Many membership owners strategically choose to have the membership be their sole revenue stream and they put all of their focus into running and growing that membership. However a membership can also work beautifully if your core offering is at a more high-end price point, as it helps make sales of that offering almost effortless. Here’s how it works:
– Your potential clients will find it much easier to “take a leap of faith” to join your membership at £30 or £97 per month than to jump straight into investing several thousands of pounds in your intimate group programme, or in working with you 1:2:1
– They are now “paying you to give you their attention”. This means they are more likely to filter out all of the other noise and distractions and free stuff and focus in on what you have to offer. Because they are paying you they value it more and give it more of their focus.
– Know, like and trust builds and they come to increasingly trust you and value what you offer. This is the exact same principle behind nurturing people via an email list or Facebook Group – the difference is that you are being paid to nurture people instead of doing it for free. How beautiful is that!
– This then becomes the group of people who are more likely to buy from you at the higher level. Intuitively you may feel that people who are paying you a small amount each month are less likely to step up to invest at a much higher level but in fact the opposite is true. For example, last time I opened up places to work with me privately 80% of applicants and 100% of the people who actually signed up came from inside my membership. Similarly I’ve recently started a new Mastermind level programme for women and so far 100% of the people who have joined are members of my membership – or have been members in the past.
I hope you’ve found this useful – obviously I’m a bit biased about memberships as this is the business model that (no exaggeration) has changed my world. So to balance my enthusiasm you might find it useful this article on 5 reasons NOT to start a membership – along with my suggestions for what to you can do instead.
Free Workshop Series (starting 21st April)
If you think a membership could be the perfect business model for you too, my own membership mentor Stu McLaren is starting a free online workshop series on from Thursday 21st April where he’ll map out the exact blueprint for transforming your existing knowledge and passion into recurring revenue including:
- Walking 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.
- Sharing 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!
Here’s the link to register for this workshop series
Get the Membership Guide and get started TODAY!
And if you don’t want to wait until 21st April to get started you can download and read a free guide to get you started thinking about your membership TODAY: Get the free Membership Guide here.
Enjoy getting to know Mr McLaren – he’s one very clever (and supremely nice) guy!
*Note: The links to Stu’s workshop and membership guide are affiliate links. If you sign up via my link and later buy his course I may receive a thank-you payment.
With Love & Gratitude,