James Schramko is one of our own personal membership mentors. He helped us flesh out our own first online membership many moons ago, and is a true membership master himself in the subscription game. He is the founder of superfastbusiness.com, where he helps business owners make plenty more profit while working a whole lot less.
In this interview, we discuss the makings of a multi-million dollar membership, free trials, and how to make content areas your members will love.
What You’ll Learn:
The ascension model.
How to get people to pay you, retain members that you’ve already gotten.
How to set the culture.
Why you should use the membership model.
How to make recurring revenue.
You are worth it!
Why your membership is a supermarket.
How to work less and make more.
The ascension model.
James says the ascension model is the idea that someone comes across his website, get onto the email list, free training. Then, those people get to know you, listen to your podcast, buy your entry level program. From there they buy next one and so on.
He says this is just not reality. So, to explain this James uses this example:
Someone goes into a bar and order a whiskey. Generally, they are going to go with the bottom shelf or tap. Or, if they know a lot about whiskey, they are going to go for the top shelf that may cost a little more, but they are going to go straight to it. They don’t start on the cheap stuff.
If you start out at a high-ticket version first you can always work your way down.
Get people to pay you, retain members that you’ve already gotten.
It’s easier to keep customers than it is to get new customers. It doesn’t matter if it is $99/month or $1,000/month you have to build the next steps for everyone into your site. That’s where you drop them in. Don’t make your members go through unnecessary steps.
Typically the higher-tier client is the one that needs answers immediately. James actually has a place on his homepage that helps people find the product they need right now.
For the highest level he does make them speak to him before they can join. He does this because he does not want the wrong people in there. It’s not good for him, other members, and it’s definitely not good for them if they’re a bad fit.
The first thing that James made us do when he met him, was empty our inbox. Our inboxes were a mess at first! But, James told us that we would never be able to manage our membership if we don’t clear our inbox.
We took James’ inbox email course and we have been at zero in our inbox for the last several years.
If you can’t manage little things, you can’t manage big ones, like a membership.
Set the culture.
Our whole mission is to try to help families be able to quit their jobs and make an entire living online, to spend more time together.
When we first started, some members were growing so quickly that they could not keep up and their membership would overwhelm them. That is why now we set limits, we tell our members to start beta groups. Because, if you don’t start small and steady, you’re not going to be able to contain the culture.
Why the membership?
James says there are all kinds of different industry metrics where people say things like, “You’ll make $1 per email subscriber, per month.” If that were true, James would only make $7,000 per month. However, he says you can easily make 20x that amount.
James’ first success was selling software as an affiliate.He would help people who wanted to be able to build a website, back in 2006. There was no WordPress. He had to learn tools like DreamWeaver, be able to code. There were a couple tech software to help, but not many. However, he found some software that worked on a Windows PC, build your website on your computer, and then upload it to the web. Back then, he was making $49.25 per sale, but the product was actually $198 software.
Eventually, he worked himself all the way to $10,000 per month. Then, he started getting a demand for a “cheat sheet” he was giving away, as a bonus. So, he started selling it.
People that had bought the product found out and asked if they could buy the “cheat sheet.” James then stared sending them requests through PayPal and people kept buying them. People started sending him emails in droves about the “cheat sheet” after on person explained where they could buy it in an online forum.
He buys a domain, registers the product, puts it up for sale in an online marketing forum. The first day, he sold $1,000 worth.
He essentially built a small membership around it. James had began running a webinar in 2008.
At this time, James had also been to America for a conference. He had gotten several ideas about how to drive his traffic. But, the big picture was that he would reach out to the people he built websites for and offer them online marketing services.
How did they get access to the membership? By buying his “cheat sheet.” Which worked, but each month he would have to start from scratch. He got himself up to $10,000/month but could not get past that cap.
He only had a few hundred people, but soon realized they had needs that extended past the software, and were buying other things. Some of them were buying online marketing programs, and some those were recurring.
As a member of a couple of paid forums himself, James found that he would pay to be in them and no one was there to help. That was James’ first lightbulb. He was going to make sure he gave his members the education they needed. He wrote down what he liked and disliked in all the forums he was in.
He signed up 2 clients that he had built websites for, paying $5,500 each for his online marketing. Then, he quit his $300k/year job. Which, sounds like a lot but actually was just enough to his family by, in Sydney.
But, after quitting his job he began selling more affiliated-related services, getting between $30,000-$40,000 per month. He was driving facebook and Google ads. He actually drove so much traffic for one product that they went broke, which meant they forfeited their last payment of about $10,000 to $20,000. Now, this happened at Christmas time which put James in a crunch. He had to pay back his advertising expenses that he had built up the previous month. At the same time, his service sales broke even.
James knew then that he had to do something to make sure he never ended up in that situation again. So, in 2009, he started his membership with close to 80 members. He started them off with a 60-day trial that begin billing afterwards. It was all based on a affiliate-promotion program for a $2,000 information product. To do this, he started a community of members and went through the training with them, supporting the through it. He sold 78 courses at $1,000 per sale, in commission.
Basically, he made $78,000 for his first two months of membership. After the 60 days were up, most of the people stayed! That meant he had a core group of people that became the heartbeat of his membership.
From there, James began speaking at events and workshops, where he would give this 60-day trial to them too. Then, he added podcasting to the mix. Podcasts for James are a great conversion tool.
In James’ words, the idea of a membership is you want to be paid by a lot of people instead of one person.
It is totally possible to be like James and have 6-figure months, every single month. he has found that memberships are by far the most stable business model!
All it takes is one employer not handling finances properly for you to lose a job, when you rely on other people. Anywhere you want to pull statistics from, the majority of businesses fail.
In a normal job, you have a single point of failure, which is something we want to avoid at all costs!
You are worth it!
When people feel guilt around having a higher-price membership, what they are really saying is that they don’t feel like they are worth it. In turn, they often put a low ticket price on it.
Your membership is a supermarket.
If you have a type of membership with a fair bit of content, James’ supermarket metaphor works great!
Here’s how it works:
When you go to the supermarket you usually have things on your list.
You get your cart or basket and go through the aisles, looking for everything on your list.
You can get in and get out with only the items you need. That would solve all of the problems you have, the reasons you came in the first place.
There are a lot of other things that do not apply to you. You may not have a pet, but they have a pet section. You’re not going to pay attention to the pet section.
Within a supermarket every person has a different combination of items in their cart, to suit their needs.
If people see the entire supermarket they will get overwhelmed, they will end up with a bunch of stuff they don’t need, in the process not always getting what they need. But, you can end up getting more things at the supermarket because you find out about other things that could be useful.
Step-by-step will not always work. You have to help people find what’s right for them.
Work less, make more.
The more protective you about your personal life, the most successful you become.
“Not all activities are equal. You have 8 hours to sleep, 8 hours to work. You still have 8 hours, well what are we doing in those 8 hours? Are we dredging through emails and watching Netflix? Probably. So, you can direct some of that time into higher activities. You can actually buy other people’s time to do things that you shouldn’t do yourself,” James says.
Be aware of what you’re doing and start rating its importance. Basically, your income minus your costs, divided by the number of hours you work.
Raise your floor higher than everyone else’s ceiling!
If you would like to connect to James Schramko:
- Go to superfastbusiness.com. Information for his podcast and book are on there as well.
- Buy his book Work Less, Make More, on Amazon. It is also on Audible.