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Today we’re talking about a shift we’ve made in our online business and we think you should consider in yours, the recurring subscription model.
We’re going to cover how to create memberships around your digital products, so you can lower the time you spend yet increase your income.
When you really start doing the math comparing the launch model versus a membership model, launches are very unpredictable as human nature is not easy to determine and/or predict.
It’s a little more work upfront, but once you begin things do not take as long to maintain the membership site.
Membership Sites = Consistent Income
We consistently make money everyday for work we have already done while interacting and providing value to the members.
You will learn from your customers as you participate with them and what they are looking for. (we aren’t just sitting on a beach somewhere after the membership site goes live)
With Membership sites there isn’t the stress of depending on a lot of sales from a launch but planning what you can do to guarantee or test more sign ups.
With cash forecasting we’re now able to have an idea of the income we’ll be making in the future.
It is important to make sure you have all of your systems in place before starting the membership or recurring online business so that you don’t have to spend many hours a week working on it.
You will learn
- How to Provide Value to Your Members
- Major Benefits of a Membership Model
- Turn Rate is more predictable with a subscription based model
- Accessible anywhere online
- Get to know your customers better
- Build a relationship with your members
- Common Questions about running recurring business models
- How many products do you need to start the membership business?
Links and resources mentioned in today’s show
- The Flip Your Life Community
- Tropical Think Tank Chris Ducker The new business podcast
- James Schramko SuperFast Business.Com
- Jeff Walker
Enjoy the podcast; we hope it inspires you to explore what’s possible for your family!
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If you have comments or questions, please be sure to leave them below in the comment section of this post. See y’all next week!
Can’t listen right now? Read the transcript below!
JOCELYN: Hey y’all. On today’s podcast we’re going to tell you about why you should offer a membership or recurring subscription in your online business.
Welcome to the Flipped Lifestyle podcast where life always comes before work. We’re your hosts Shane and Jocelyn Sams. Join us, each week, as we teach you how to flip your lifestyle upside-down, by selling stuff online. Are you ready for something different? All right, let’s get started.
SHANE: What’s going on guys? Welcome back to the Flipped Lifestyle podcast; great to be back with you. We’ve had a great last couple weeks. We are hack-free as far as we know, cross fingers.
JOCELYN: Don’t speak too soon.
SHANE: Don’t speak too soon, but we’ve finally got our feet back address and we are feeling like everything is back under control, so we are really excited to be able to just focus on you guys and help you take your online business to the next level, deliver some great content and not have to worry about the giant dumpster fire that was the hacking incident, basically.
JOCELYN: Again, don’t say that too much. I’m scared.
SHANE: Fingers crossed, okay? Today we’re going to be shifting gears a little bit, not just in our podcast content, but we’re going to be shifting gears in our online business. A few months ago, Jocelyn and I made a huge, huge change. Our entire business model flipped, “flipped,” see what I did there? Flipped Lifestyle, flipped.
JOCELYN: That was great.
SHANE: You like that? But our entire business model shifted. We went to an event in the Philippines called Tropical Think Tank. It was hosted by Chris Ducker of The New Business Podcast and it was an amazing event where we got to talk to a lot of really, really smart people from all over the world, a lot of high-level internet marketers, and we actually met a guy named James Schramko who runs a website called superfastbusiness.com and he helped us break down what we were doing on our online business and he introduced us to the membership model or the recurring subscription model where you create forever customers. You go out and you find customers that want your stuff and they pay you a monthly membership, an annual membership, or something recurring, something that happens over and over again, and you agree to keep providing value, keep meeting their needs and keep helping them do whatever they’re using your information for.
JOCELYN: And I would just like to add that this was the beginning of, or at least part of, Australians taking over my entire life.
SHANE: Yes, very much.
JOCELYN: We met a lot of Australians at Tropical Think Tank and we’re friends with Josh and Jill Stanton, of course Josh is Australian, and my person that I hired to help me with my customer relations management software, she is from Australia, so I feel like I’m just surrounded by Australians at all times.
SHANE: We are surrounded by Australians.
JOCELYN: And James Schramko of course is also –
SHANE: Is Australian.
JOCELYN: An Australian.
SHANE: Yup, and we talked to Australian, like we have to, like they have to, they’re a certain time, it’s a weird time zone shift from the east coast to Australia, so like we’re always up at these weird times now trying to talk to all of our Australian mates over there. So if there’s anyone from down under that’s listening right now from Australia, you’re awesome, we love you. But let’s get back to memberships; James talked us into switching some of our sites to memberships. A lot of our teacher sites, some stuff that we had outside of Flipped Lifestyle, and we experienced some amazing success, now that, it was not an easy conversation to have because we actually used to be against membership sites. We didn’t understand them necessarily. We didn’t like them and we’ve actually talked about on this podcast, how we didn’t recommend people use the membership model or the recurring subscription model. We’ve always used the launch model, that’s how we started our online business was you build a digital product and you launch around that, but we have definitely had a change of heart because there are some amazing benefits of switching over to a membership model and we are going to talk about that now, and it’s actually going to be mostly what we teach about in the future is how to create memberships around your digital products and how to create forever customers. “How to lower the energy that you have to spend in your online business and increase the income that you generate at the exact same time” But before we do that, let’s talk a little bit about what our problems with memberships were, why we didn’t like them, or the reasons that we didn’t understand why we taught they were bad. So Jocelyn, why did you not like memberships? Jocelyn, as always, was the harder sell to switch to memberships.
JOCELYN: I know you can’t imagine that, right?
SHANE: You can’t imagine that, but I jumped on board after a little convincing, but Jocelyn as always had reservations about membership. So what did you have mainly that you didn’t like about membership sites?
JOCELYN: Well, you know, I think that membership have always sounded like, I always say it’s the Holy Grail of internet marketing, like that’s what everybody wants to do, it seems like, and I didn’t really understand why because to me it just seem like a lot of work, and you know it’s just like everything else online, there is nothing out there that is truly passive despite people talking about passive income a lot, there’s nothing out there that you can do that’s a 100% passive.
SHANE: So you’re saying it sounded like too good to be true that people would just keep paying you every month kind of deal?
JOCELYN: Yeah, and I just kept thinking to myself, “Well what are they paying for? What am I going to have to do in return? Like how much more work is this going to be for me?” And that has been one of my main concerns with a membership site so far.
SHANE: All right, so now that you’ve done, you know, we’ve actually converted three websites completely over to memberships now, like what have you learned about the process compared to what you thought before?
JOCELYN: I mean it hasn’t been as much extra work as I thought it would be, it’s actually a little bit easier than it was before when we were sending out emails and trying to get people to join, like, or not necessarily join but try to get them to –
SHANE: Like launch, launch new stuff.
JOCELYN: Purchase a product. Yes, actually a lot easier because I’m only promoting one product now as opposed to the – I think I had like over 30 products that I was promoting before.
SHANE: That’s a good point, and I think for me I was always worried about retention; like everyone – you read all these horror stories like people are only retaining like 50% of their members after three months, and I think also I kind of fell into the trap of all the gurus out there who are like, “I’m going to show you how to launch and I had a million-dollar launch” and they throw this big numbers out there and like we’ve even had huge launches before, like we’ve had six-figure launches, like over a span of very few days, and I think all that excitement and the adrenaline rush of it was kind of what got me toward the launch model and away from the membership ‘cause how can you make as much money on a 50-dollar membership when I’m selling a 400-dollar product, and it just didn’t make sense. Then when we started getting into it, I realized that most of the people who are having problems with retention, well their biggest problem was they were not providing value after those first couple months, so of course people are going to start, stop paying for membership. And a lot of the people we realized once we really got into studying how a lot of other people’s business models worked is the launch model is kind of smoke and mirrors. A lot of people out there say these big numbers but when you really start doing the math, it doesn’t add up, but the people with the recurring memberships who are providing value consistently over time, they are getting a lot more value out of their customers and their members than we were getting out of our customers in the launch model.
JOCELYN: One more reason that I was a little bit leery of the membership model is because I personally have been a part of memberships before and I didn’t really like them and I made the mistake of thinking that because I don’t like something, my customers don’t like something. And that’s not necessarily the truth, and also the parts – the memberships that I’ve been a part of are not doing it the right way, like I don’t feel like I’m getting consistent value from them and I think that’s another thing that scares me – had scared me away in the past from creating the membership model.
SHANE: And I think that goes back to a lot of other membership models, like it seems like anyone who tries to get this recurring subscription thing up, you know there’s this argument, like you said earlier Jocelyn about passive income, there is no passive income. I mean if you’re going to have a membership model then you’re going to have to serve and take care of people in your membership, and I think what happens is all these – the passive income people or you know, the people who want to start this recurring membership model, they just want to throw people in a Facebook group and give them some training videos and never talk to them again. So you do get burnt and you don’t get any value, and you don’t have any access to the people in your membership area, and that kind of you know had turned us off from this. And also too, I think that the more we got into the launch model, the more, and this is like the Jeff Walker style launch where, you know, you have this big product, really expensive, you get it out there, maybe you get a bunch of people to promote it for you, we kind of over time have realized that that is an extremely high-energy way to run your business. It is unsustainable in the long term and it’s totally unpredictable. You really don’t know if your next launch is going to be as good as your last launch and you’re kind of living from adrenaline rush to adrenaline rush. And when we learned more about memberships and recurring subscription services and things like that, we realize that it was a much lower energy, much more predictable way to do business. And also too, what a lot of the gurus won’t tell you about the launch model that we have learned over time as we’ve studied different ways to grow our business, make more money, and make more sales, is that you really don’t get to keep all of the money in that launch sequence. For one, you’re going to have to hire a lot of stuff out, it’s going to cost you more money than the experts would say to actually do a really good launch because you’re having to create sales pages and sales funnels, you’re having to buy services and you’re having to do all these things just to put all the machinery together that works in the back end. If you’ve got affiliates then pretty much you’re going to be giving away 40% of your money right away to all your affiliates as they’re out selling this product for you. So when someone says they have a million-dollar launch, they really didn’t. They might have grossed a million dollars but then 40% of that, 400,000 dollars of it, bam, is gone to all of their affiliates. So that’s going to happen off the top and then you’re generating so much hype and you’re doing all these things with your subject lines and your ads and this and that and the other, where you know, ad money and whole other part of that that you’re going to have to spend a ton of money to get, make your launch work, but you’re doing all these stuff to create this huge hype machine on this product, well there’s really no way that you can live up to the hype if you’re trying to do these massive launches where you get a lot of money fast and the scare surely makes everything disappear. So you’re probably going to lose another 20-30% in money-back guarantees. And then basically after you make taxes, you’re only going to get about 25% of your gross and you’ve spent a ton of time and energy to do that and here’s the bad thing, you’re going to have to turn around, do it again in a month or two months or three months, or whenever your next launch is because once that money dies up from a launch, it’s over. You’ve gotta go out and make more. So Jocelyn and I made a decision that we wanted to create a new kind of business for ourselves. We wanted to create a business that was lower-energy, that was more predictable, that was more sustainable, that was more ethical, and it allowed us to go out and actually serve the people that we wanted to serve. You know, our main goal is we want to help a thousand families flip their life like upside down with online business. We want to help people and we want to make sure that our business always pushes us towards serving the people that come to us for help. So we looked at the membership model and we said, “This is the different thing. This is what we want our business to look like” and we went all in and we changed everything over to it, and man it’s been a great decision.
JOCELYN: All right, so we are really enjoying our membership sites, our new model, because it is lower energy. It is a little bit more work upfront because you are going to have to change some things, and it’s going to be a little bit hard at the beginning, but past that it’s been great. We login to on the forums on all of our sites, we take a few minutes, we answer questions, we check on our members, you know, we have to do a few little maintenance things, but as far as it goes, we don’t really have to do that much extra work like we thought we were going to have to.
SHANE: And we actually want to do that too. Like I don’t understand why people say, “Well, you gotta maintain it every day” like that’s a bad thing, like we get to know these people, we know their families, we know their kids, we share can’t-miss moments with them in one of our specific forums, and we want to help them, so like we actually look forward to getting up every day and talking to our members. It’s not like it’s a chore to go out and be a part of our own community, and I think a lot of people out there make it sound like it’s a bad thing, like you just want to, you know, they just want to go sleep on the beach all day, but really that’s an awesome thing that we get to do every morning is go talk to our members.
JOCELYN: All right, memberships are also great because you don’t have to rely so much on other people. Certainly you could do joint ventures and affiliate sales if you wanted to, but we don’t do any of those things and our memberships grow at a regular rate. That’s another thing is that it is more predictable and it is more stable once you kind of understand all your numbers because you know basically how many people are going to sign up each month, how many people will cancel each month, and that’s called a turn rate, the rate at which people cancel each month. So once you can kind of know those numbers, then it really makes you have a more predictable income each month. Also you can run a membership site from pretty much anywhere on the internet, if you could log on to your website, then you can run a membership site. It is fairly simple as far as that goes.
SHANE: You know that’s not true with other forms of online business. If you’re, you’re having to do graphics or work on your website or something that you might need to, you know, do something else, you might have to be at your home computer, but yesterday, like Jocelyn and I drove up to Lexington, Kentucky and we had – we went shopping and did some things, we actually got recognized in public, which was pretty awesome.
JOCELYN: Yeah, it was actually pretty weird.
SHANE: It wasn’t weird, it wasn’t weird like “Hey, I wished that guy hadn’t done that” but it was like “Whoa, that actually happened.” Someone came up and said “Are you Shane and Jocelyn of Flipped Lifestyle?” and we were like “Okay, this is bizarre but yes we are.” Anyway, but we went up there and on the way there, Jocelyn drove and I checked the forums, we made sure we served our people, and then we got out and shopped and had some fun and I checked a couple more forum posts throughout the day on my phone and we were able to totally manage our online business in a completely location independent way.
JOCELYN: Yeah, that’s definitely a huge benefit. We love to get to know our customers better instead of always finding new people and you have a one-time transaction with them and you move on. This way we actually build a relationship with them. They come in to our community, we get to know them. It’s like Shane was talking about earlier, we know things about our members. Believe it or not, we know a lot of their websites, we talk about our members like when we’re just hanging out, we’ll be like, “Oh, this person has a website about this” or whatever we’re doing.
SHANE: Right.
JOCELYN: So you know, we talk about it all the time and we try to strategize ideas even when we’re not actually in the forums. It also takes less time to start memberships because you don’t have to create like a full product and put together a big launch package and find people to sell it for you and run lots of ads, things like that. I mean you still need to do some of those things, but it’s a lot simpler, you can start out, you can start getting people into your membership and you can ask them what they need help with next.
SHANE: And it’s also like coaching, like basically like you are the product in a way so you don’t have to go through – you know like Jocelyn and I are original products that we created, they took us over a year to get completed basically, to get it all done, but you don’t really have to do that. If you’ve got expertise and you want to leverage your time and instead of coaching one person one-on-one, you could coach 50 people in your membership area and you don’t really need any kind of training videos or products. You could literally start – we actually have had people start memberships with no digital products at all, they just started a forum and they’ve got 17, 18, 19, 20 members that are in Flip Your Life right now because they’ve put this together, they had the expertise, these people, they couldn’t meet with all of these people, it would take them 20-40 hours a week just to consult, but now they’ve got one place where they put all their people and they can ask questions, they can go in, they create a database of those answers and they didn’t even had to create a product to get the – to get it started.
JOCELYN: And having a membership site is also just a lot more fun, we get to interact with people every single day, and we like talking to you guys and we like talking to each other about what you’re doing.
SHANE: Yeah, passive income to us is not remove ourselves from humanity and live on a beach in Bali while money rolls in, like that’s not passive income for us means. Passive income just means we consistently make money every day for work that we’ve already done, but we also want to keep, you know, providing value, keep helping people, so it is a lot of fun. I love talking in our forums. I get on there almost every single morning just to see what people are up to, the people that are in there are absolutely incredible. You just learn so much more about your customers when you’re out amongst them and you’re talking with them, and you’re going through this journey with them. Sometimes I think that’s why online businesses fail is because people will create these products, throw them out there and they just forget about them and it eventually falls apart because they lose touch with their customer base. That is not going to happen when you’re actually participating in the membership model. It’s also a lot easier sell. This is one of the biggest benefits that we’ve found out that we’ve – you know we have hundreds of members over three different sites, paying memberships monthly to us and we have seen a lot of – we’ve learned so much about how this process works, but the biggest thing to me is getting people into your product line, you know. A lot of people try to sell small products as a trip wire into a bigger product and a lot of people will run a launch model where they’ll try to sell a thousand-dollar product to get that big hit and they only need a few people to do it, that’s all fine and good, but it’s still very hard to convince people to sample something. It’s very hard to convince people to throw down 500-1000 dollars, you know that’s a car or a mortgage payment in some places in the country, you know, that is very difficult to do to convince people to part with that much money, but membership is such an easy sell because it’s an invitation into a community, it’s an invitation for access to you, and it’s a much lower price point. You know, before when we would sell our Flip Your Life course in isolation, we were selling it for 500 dollars, it was pretty, well it was like 447 or something like that, but it was, it was filling up but it was still – people asking questions and people coming in and people are a little scared, people are a little wary because that is a lot of money for someone to part with. But when we tell someone that our membership is, you know, 60 dollars, 70 dollars, come on into our community, that is a more accessible amount of money. That is an easier pill to swallow. People are going to have to pay to access the information that they need because, you know, everyone’s time and everyone’s experience and everyone’s information is worth money, but it’s a lot easier to get someone to give you 75 dollars or 50 dollars or maybe your membership is only 20 dollars a month.
JOCELYN: Having a membership side is also a little bit less stressful as far as finances are concerned, like we can get into our CRM, that’s customer, what is that thing called?
SHANE: Relationship Management, or Customer Service Management, something that tells us what our customers are doing, that’s what I like to call it.
JOCELYN: Yeah, so, we can get in there, we can look at what’s called, I think it’s like a cash forecast report, and it will tell us based on when people are supposed to renew, like how much money we’re going to make each day, how much money we’re going to make each month in theory, and as long as you know your numbers like how many people on average will cancel, it’s a lot more reliable to know, you know, basically how much money is going to come in, in the next month, in the next three months, and you can just kind of see that, and it just puts you a little bit more at ease. You don’t have to worry about is it the busy season, am I advertising right now, am I sending out emails on a launch.
SHANE: “Did we make any sales last night? Oh my gosh, I hope so. Did we make any sales, do you think we’ll make sales tomorrow? I don’t know.” That’s what the launch model does.
JOCELYN: And you know, Shane always says that everybody’s not going to cancel in one day, and that’s true. I mean people will cancel, it’s just part of business but everyone’s not going to cancel at the same time.
SHANE: But with the launch model, you know, you have to sell a hundred to meet your numbers, you know whatever your number is you’re trying to make your money wise, but like in a membership model, pretty much we’re recurring right now at over 90% for all of our membership sites, so all we have to do is replace a few people each month, we just have to make a few sales, we don’t have to replace everybody every time we launch because all those people paid us once and then went away. So it is a lot less stressful. We had our business, we had our, Jocelyn’s scheduled us business meetings on Mondays from 8-10.
JOCELYN: That’s right, it’s hard core.
SHANE: Jocelyn is in charge of keeping everybody on track around here. But in our business meeting, we looked at our future, what’s it called? Future reports?
JOCELYN: I think it’s called a cash forecast.
SHANE: Cash forecast, right. So we looked at our churn, how many people were buying each day, how many people were quitting, the buyers are always greater than the quitters. Then we looked at it and said man we can totally predict like not only how much we’re going to make next quarter, like between now and New Year’s, but we can straight up predict like even like what days we need to go like shore up a little bit. Like there was one day where we made like, I don’t know, it was like almost 3000 dollars in like one day and that’s going to recur that way every let’s say 15th of the month or whatever for – but then there was another day where it was like oh not a lot of people have joined in the past on the 16th so that one only has like 300 or 400 dollars that’s going to come in that day. So we can actually like plan a webinar on that day of the month so our renewals would get better the next month and there’s just some really cool things that you can do when you predict or when you’re able to predict your income instead of just hope that somebody shows up and buys your stuff. So what we did, we opened a discussion up in our Flip Your Life community membership in our forums and we asked people about their questions, what did they want to know about a membership model. How is it different than the launch model or the general, you know, classic, standard passive income type, you know, model for online business, and we saw a lot of trends in the questions that were being asked about membership sites, so we’re going to run through a bunch of the common questions right now, talking about just the general overview about memberships and why you should do memberships and kind of the, you know, big picture stuff about running a recurring subscription models, and then next week in our podcast we’re going to tell you exactly what you need to do to set one up, how it works, all the components so you could start your own membership site. I think a lot of people listening to this are going to really have an eye-opening experience about memberships and make you think a little bit differently about online business because we believe this is the least barrier entry, easiest way to get started online now, and if you kind of combine it with some of our digital product philosophies, you can get a really sustainable, successful online business going pretty quickly.
JOCELYN: All right, the first question is “Is it hard to run a membership site as far as time and energy is concerned?” And my answer to that would be, it’s not as hard as you would think. What we usually do is we will batch days that we work on our responses to people in our membership forums. So that for Flip Your Life, some days Shane will answer the posts, some days I will answer the posts, some days both of us will answer the posts. It just depends on what we have going on that day.
SHANE: Some days we don’t answer posts because a lot of times what happens is I’ll get up in the morning and there might be 50 forum topics, well a lot of times a lot there, I mean there’s 300-something members in that forum right now. A lot of times other members will jump in and know the answers so we just have to go in and kind of confirm that or maybe point them in a little bit different direction, but everyone is helping each other so that takes some of the load off of you basically. When you’re all alone in the launch model, you’re just answering all the questions yourself because they’re all to you.
JOCELYN: And it’s like I said earlier, it does take a little bit more effort and energy up front because you do have to change things over if you’ve already started a different business model, but the good thing is if you could put systems in place, like as far as customer service goes, like for adding people, for cancelling people, if you put all of those procedures in place from the beginning, it’s really a downhill slide as far as workload and energy goes after that.
SHANE: And I would say that we probably work like focused on the membership area, probably combined about an hour maybe, an hour and a half a day, five days a week or something like that. So we’re probably putting in five to six hours a week to help our members, because the format of the membership forum is so fast, we can just go in there and roar through the questions that they have, get people unstuck and get them moving forward. It’s the same, it’s even less energy with our other sites because those are product based, people are online downloading lesson plans in our teacher websites, so there’s not a lot of questions. There’s, sometimes they’re sharing things, sometimes they’re asking for things, but we’re probably not working on the memberships more than maybe five to ten hours a week.
JOCELYN: No, I’d say closer to five really.
SHANE: Yeah. So it does not take more energy, it just takes a little bit more consistency and you do need to have systems in place, like Jocelyn said, okay. All right, another very common question, this is probably the most asked question in our forums right now over at Flip Your Life is, “How many products do you need to start a membership?” and I think this is a big hang up. People think that a membership site has to have everything that could ever be talked about, about a certain topic in it, but really the answer is very, very little. You really just need probably one product to start your membership site to get people join because people will join the membership for a product or a lead in but they’re going to stay for access and the community. People come in to Flip Your Life and there are people that have gone through our course material that we have in there, they’ve completely exhausted it, there’s nothing left, and they keep paying every month because they know that when they get stuck in their, you know, business, they can come ask me and Jocelyn, they can ask other people in the community. They’ve got masterminds that they formed in there and they stay for that thing they didn’t even really know they needed which is the community, the support network and the help. It’s the same thing in our membership sites for teachers. We have lesson plans and once they join, they’re going to come in for that stuff, they’re going to come in for those lesson plans, but then they’re in there because they can say, if there’s something not in our training forums or not in our lesson plan forums, they can say, “Hey community, I need this for this movie, I need a work sheet or a quiz to show this movie in my class or I need a test for this part of history that might not be in the content we’ve created.” So you really don’t need a lot and like we’ve said earlier some people in our forums have started memberships with nothing and they’ve already got, you know, 20-30 members.
JOCELYN: Yeah, I almost think that you’re at slightly of more of an advantage if you don’t have a lot of products because if you’ve already created this huge flagship product without a whole lot of audience help or participation then it might not even be solving the problems that they have.
SHANE: Good point.
JOCELYN: If you start out with pretty much a small product or part of a product, you can bring people in, get them to help you create the rest of it and make sure that you’re really solving those problems, and I think that that is just a fantastic way to build a business.
SHANE: And I actually – I’m not going to say names on here, but I might ask him later if I can tell who it is, we’ll put it in the show notes. A friend of ours that were in a mastermind group was asking me about membership sites and he said “Well, I’ve got this one client right now and he’s pretty much starting from the beginning of whatever product I would teach I think” and I said what you should do is – he created a forum and he is coaching this person through the process of what he advises him for like a month on the forum. They got – he’s put him in there and the only place he can ask questions is in the forum. Then he is creating modules to answer his questions, videos and things like that so that when he does open this up later he’s going to have all of this content already created. So that’s a person who started their membership with one person and no products and then once they build it up a little bit, they’re going to open it up to more people. So you can totally roll it out. So the moral of the story is you don’t any products, maybe one that serves as like the lead magnet to draw people in, but –
JOCELYN: At the very least, you’re going to have to have a lead magnet.
SHANE: Yeah, you’re going to have to have something that says, “Hey, I’ll teach you this” but then they will stay because of the community and because they have access to you, okay? All right, the next question that most people asked, this was asked two or three times when we opened up this thread on the first day is “How much new stuff do you need to add each month to keep members paying? How do you keep momentum going?”
JOCELYN: This is a tricky one because I think this is a sort of a grey area; I don’t think there’s a black or white answer to this.
SHANE: It’s niche dependent basically.
JOCELYN: Yeah, I think that you do need new content constantly coming out. However, it might not be content like what you’re thinking. You don’t necessarily have to create a new product each month to keep people in that membership, it’s mostly like Shane said about the community, but it’s also a good idea to give them some reason to keep coming back, and that’s what I do on my Elementary Librarian site. Each month I am working with someone who’s creating content for me, that person is creating a new pack of lesson plans. So it’s only like five or six lesson plans each month, but I send that out in my member newsletter to say, “Hey look, come on back and check out the forums if you haven’t been in in a while, here’s what’s new.”
SHANE: Yeah, and on the history site where I’m selling lesson plans to history teachers, I’m actually not creating new content on that at all. The history content is really evergreen so people are going to come back to get the stuff they need when they have to teach about, I don’t know, World War II, which is always going to be when it happened and not going to change. But how I draw new people in is I have an exchange forum where teachers can upload their own stuff and people can upload work sheets or lesson plans or anything they have that supports the lesson plans that are already created and then once a month I put together a newsletter that says here’s all the new resources that have been submitted to the site this month. So that’s new content. So your users are going to help you generate new content every day, we have 50-60 posts a day on Flip Your Life. So all that stuff keeps churning in; Jocelyn just gave you a great passive income strategy, you can hire someone to create something new for your forum. That’s a way to get content and also there’s a really easy way to just incorporate this in your strategy session or in your strategy for your website is just converse with your people and ask them what they want. A lot of people have requested that we show them how to setup a forum, so I created three quick videos, took me about an hour, and I put those in the forum, there’s now a new training course in Flip Your Life about how to set up forums. For Flip Your Life, the only thing that we really do content wise is we do create a new training each month that takes about an hour and a half, it’s an actual webinar that we do live, but then after 24 hours that comes down from the public page that we have setup for webinars and that becomes member content forever and that goes into the training forums. And we also do a live Q&A once a month where everybody in the forums can login and talk to us personally and we have a really good hour or two conversation and answer people’s direct questions right then on the air. That also goes into the training forums and becomes something new. So we probably put about two hours, three hours in the new content a month, something like that.
JOCELYN: Yeah.
SHANE: Something like that, so you don’t have to add a ton of stuff but you do have to trickle something out that’s going to keep people coming back but your members and the community is what’s going to really help you bulk that up so people are getting daily value.
JOCELYN: All right the next question is “What do you give away for free and what do you keep behind the membership wall?” Wow, this is quite an interesting question because this also varies a lot depending on what kind of niche you’re in and what your customers are looking for. For me, on Elementary Librarian, I keep a lot of things free. I do this because I have a big Pinterest following and a lot of these things are things that people have Pinned so I don’t want to put those behind the membership wall necessarily. So basically I kind of have about I’d say about 40% free content and the other 60% is paid content. It’s how I set it up on Elementary Librarian. I still want doors coming in to my site, in other words I want people to be able to find me through Google search and through Pinterest and some of the other ways that we talked about in the past but I also want members to feel like they’re getting something that’s special, that no one else can access.
SHANE: And a lot, like on the history site, a lot of the stuff that’s free leads to the stuff that is paid. Like I might release a PowerPoint presentation for class or a worksheet and if they click the worksheet and download it, they get taken to a link that says oh by the way in the member area, there’s an entire lesson plan that’ll take three days to teach with a test that goes along with the resource that you just got for free. So you’re kinda leaving a trail into your membership area and it’s like Jocelyn said, there’s something special in the member area that it’s not just about the stuff – this goes back to the stuff argument like what’s free and what’s not. People don’t pay for stuff, everything on your site can be free and just scattered about, but if you put it in an organized, systematic manner in a membership area and within that membership, area people have access to you, they’re going to join and stay in your membership. It’s not about the stuff, it’s not about well this much is free, this much is not, it’s not about holding out the little carrot and snatching it away from them and putting it behind a pay wall, that’s not the point here. The point here is to provide people with systems and access; that’s what a membership should be built around, and if you do that then people are going to love it, they’re going to stay with you and they’re going to keep paying every single month. The history site actually, I’d say 10% of that is free, wouldn’t you think because I have like a 150 posts that just tell what’s in the lesson plans but all of the lesson plans are in the back end and there’s some samples floating around to give people a feel for what might be in those lesson plans. So don’t get hang up on the stuff here, give people value, give people community, give people systems and organization and access, and they’re going to stick around with you and your membership area, okay? All right the next question is “Is the membership model right for every niche? How do you know if it’s right for your niche?” With everything online, anybody that tells you that it’s perfect for everybody, is wrong. I mean this is not the right thing for every single possible niche. If you have, if you’re teaching something that ends directly, for example if your sole goal in life is to teach people how to start a podcast and get their podcast on to iTunes and get them live, then that has a definitive beginning and end. If that is all you teach then you can’t have a membership model that’s necessarily built around that because it’s going to end, it’s going to dry up, it’s going to run out. Now if you continued on in your membership area and talked about how to market your podcast and things like that and you have the authority to actually back that up, then you might have a membership model. But it just depends what you’re selling and kind of if it has a beginning and an end, if it’s going to be right for you. I would say that most niches could probably look at some kind of subscription model and get creative there to try and create that recurring revenue, but no it’s not perfect for every single niche. You’re going to have to look at your business, look at your audience and see if it fits.
JOCELYN: All right, last question for the day is “How much do you charge?” Well that is another famous answer. It depends. I love that.
SHANE: It depends, it’s so easy to say it depends.
JOCELYN: And it really just depends on what you’re selling and who you’re selling it to. Be careful not to get into the trap of, “Well I sell to single moms, or I sell to stay-at-home moms or teachers –”
SHANE: Teachers or nurses.
JOCELYN: And they don’t have any money. Don’t fall into that trap because what you have to remember is, I mean if you’re charging people say 29 dollars a month for instance, you know, that’s less than the cost of going through the drive thru at McDonald’s, if you’re like my family, because I guess we eat a lot, I don’t know.
SHANE: We buy a lot of Happy Meals around here I’m telling you.
JOCELYN: So I’m not saying that’s a throw away amount but it is generally for most families in America, that’s a negligible amount, so try not to get caught up in that trap of thinking, “Well my audience doesn’t have any money so I have to charge them like five dollars a month.”
SHANE: Yeah, because you’re never going to make any money charging five dollars a month, and you’re also selling yourself short because it’s not about – part of it is what your audience can afford. I mean there’s a definite difference if you’re selling a membership to millionaires than if you’re selling a membership to people who are making, you know, the lower level of middle class income.
JOCELYN: But let’s say for us, we provide teachers with lesson plans every single day.
SHANE: That’s massive value, we save them tons of time, tons of energy, tons of effort. We give them life back after school with their families so they’re not slaving away at making these lesson plans during their off time when they should be with their families and they shouldn’t be worried about work, they’re having to do all these other stuff. So we base it on that value. Now we do look at affordability and we do want to make sure that everybody that wants to actually buy these lesson plans can afford them, but we’re not going to dumb it down to make it six dollars a month where anyone can buy because not many people will. Usually the people that are wanting this value are willing to pay for it. So you’re going to have to look at your niche. We have people in our membership that charge everywhere from 99 dollars a month, all the way down to, I think the lowest membership I’ve ever seen anyone post in there is like 19 dollars a month. It depends on what it is. Every site we have is different; the history site is different than the librarian site, because the librarians we found have more access to school funds so they’re willing to spend more because they’re spending someone else’s money. The teachers in the history department sites are actually spending their own money because they don’t have as much money. Coaches don’t have as much money as the others teachers so they might spend something different if I was selling a football product, and for Flipped Lifestyle what we do on our membership there is we actually have a little bit higher price point because we want to make sure that we’re – I don’t want to say leaving people out, like excluding people who aren’t serious. We don’t people to say “Oh this is 10 bucks, I’ll jump and then leave.” We want people to come in and participate and change their life and commit to something, and go forward with that. And we also don’t want to waste our members’ time because they’re going to go in there and leave a couple of posts and quit. So we actually try to price that up a little bit to make sure that we’re getting people that are serious.
JOCELYN: And the Flip Your Life community, it is a little bit more expensive because we do invest more of our time in it. We get to know you, we get to know your business and we really invest and we take that seriously. I mean we don’t just jump in there and answer questions and not even know who you are. We go to your site, we read your email, we read your ads.
SHANE: And our members do too, that’s another thing, we try to keep it – that one has to have a higher price point entry to keep people from jumping in and out because, you know, if you come in and make a post and 10 of our members take time out of their day to jump in and help you, well if you quit next month, that’s not fair to them, that’s not fair to us, and that’s not fair to you. So that one is a higher price point, and also to entrepreneurs and business owners understand more about investing in themselves and in their business so they’re willing to go out and do that. So the price is going to be varied from different niche to different niche. But you can definitely figure this out, what I tried to do when we started our pricing was I divided what our product was by 10 and I figured that’s what it will be about worth monthly. That was just a simple metric that I used, you know if I wanted to charge 290 bucks, I’d divide it by ten, charge 29 bucks a month. If we want to charge you know 500 bucks, maybe 50 bucks a month. So whatever people in your industry are charging for big ticket products, maybe divide that by 10 and that’s a good starting point, then you can play around with it with your audience.
JOCELYN: All right guys, I hope that that helps explain why we decided to change to a membership model for our businesses and coming up in the next few podcasts, we’re going to be talking about how you setup a membership; like the actual mechanics of doing that.
SHANE: And we’re also going to be bringing you an amazing case study of a couple that switched from the launch model to the membership model and are seeing huge dividends in their online business.
JOCELYN: But before we go we want to bring you one of our can’t-miss moments, this is something that we might have missed if we have not started our online business back in 2013.
SHANE: My can’t-miss moment this week is I actually woke up early to go to the gym one day and I actually took Isaac with me. We have planned to go swimming; Isaac loves to swim, we’ve talked about this on the podcast before but he is a fish and wants to be in the water all the time, and that’s why I said, “Hey how about we go and get some extra swim time in before school?” because he’s really practicing, he wants to join a team, and we’re about to let him do that so I wanted to give him some more laps in. So this week I got up at about 5:45 and took Isaac swimming, we hang out, we stopped at McDonald’s on the way home, got him some eggs and bacon, and got us some chocolate milk and then we came home, picked the girls up, and we went to school. But I know that that would’ve never been possible when I was working a job for somebody else because we had to get up so early and –
JOCELYN: We got up at that time.
SHANE: Yeah, we got up at that time, and I had to have a 30 minute commute just to get to work and then we had to drop everybody off on the way, and it was just a total mess and total chaos every single morning, so stressful. And I was just really thankful to be able to have total control over my time and say I’m getting out and spend a hour and a half with my boy before school. So that was definitely my can’t-miss moment this week.
JOCELYN: Mine was actually going to Isaac’s school earlier in the week. Our church does an activity, it’s called Love Loud, it’s for our community where we just try to do something, it’s actually – they call them ‘not so random acts of kindness’ and we actually fed the teachers at his school, but while we were there we decided to go down and eat lunch with Isaac and so that was a lot of fun just getting to go into his school and meet some of his little friends and he was just so happy to have us there. So that was definitely my can’t-miss moment for this week.
SHANE: All right guys, as we wrap up this show, as we always do, we leave you with a Bible verse. Today’s Bible verse is Hebrews 11:6 and Hebrew says, “God rewards those who diligently seek Him.” So don’t find your reward in your online business, not all about the money. Keep your mind focused on what’s really important and you will get those rewards too. So until next time, get out there and do everything you can to flip your life. We’ll see you then.
JOCELYN: Bye.
Patrick Roden says
S&J-
We are starting an aging in place classifieds; should we do a launch set yearly price or a monthly fee? Sounds like a monthly fee would be better after listening to this.
Thanks, Patrick
Hicunni says
Great information as always 🙂 What if you are just starting out and don’t have a huge following?
I’ve been wanting to start a membership site!
Shane Sams says
Hi Hicunni. EVERYONE starts out with small to no followings. Pat Flynn, John Lee Dumas, us, etc…everyone. You create content, you take it day by day, and you spend your time and money and hustle to build an audience. No shortcuts, no easy answer my friend. Just start and let it grow.
Hicunni Chandler says
Just reading your response. I already started organizing what we want our membership site to look like. After my comment, we made a decision to just go for it. Listening to your new podcast, right now! Thanks Shane!
Liane says
I have been wanting to do this for awhile but you guys were not keen on membership suers and I don’t have all the knowledge I need to get started. So glad you are getting into this area and can help me get moving with it,
Cheers Liane