Membership sites are a recurring revenue miracle. Set it up, and watch as it starts raking in piles of money…
While you’re lounging on a warm beach halfway across the globe.
Sound too good to be true?
Maybe it is, because most membership sites are not an overnight success.
But recurring membership businesses can be very profitable, whether you’re offering software, personal coaching, or online courses.
If you stick with it, your membership will eventually become a wildly profitable recurring revenue machine for your business.
But there’s a lot that happens behind the scenes to prep for – and sustain – that level of success.
Let’s take a journey through the 7 distinct profitable membership site stages… so you’ll have a business that’s built to last.
Table of Contents
- Stage 1: The “Gotta Have It” Factor
- Stage 2: The Perfect Model
- Stage 3: A Real Membership Community
- Stage 4: Steady Growth
- Stage 5: Tech systems, automation, and functionality
- Stage 6: Members Who Stick Around
- Stage 7: The Explosion of Growth
- Is Your Membership Site Built To Scale Profitably?
Stage 1: The “Gotta Have It” Factor
The necessary first stage of growth – weeding through the profitable membership site ideas – will determine the extent of success achievable by your membership.
Just because your newest brainchild looks and smells like a membership site…doesn’t mean it’s going to attract the right people.
Popular membership sites and online courses (like Marie Forleo’s B-School, to name one of many successful examples of membership sites) stand a head and shoulders above their direct competition.
They fit their niche like a glove.
If you master this first stage, it means you’ve nailed the basic questions:
- Who’s in my target market? What are they looking for?
- How is your membership site perfectly suited to solve their problems?
- Is your membership program priced too high (or low) for their income or spending level?
But it also means that you’ve gone so much deeper, and have discovered the true heart and soul of what your clients are actually looking for.
Stage 2: The Perfect Model
The best membership site ideas require an equally stellar mode of presentation.
Have you figured out yours, yet?
Some membership owners throw together a couple amazing video courses inside a membership site and watch the fireworks happen.
Others do the exact same thing… to crickets.
If you can create the right balance for your delivery, the right model for your membership needs, you’re good to go.
Stage 3: A Real Membership Community
Here we have it – the third stage, where a community develops… or it doesn’t.
The first two stages are about finding, creating, and presenting the perfect offer. This stage is a huge hurdle, because it goes beyond selling your content (all challenges in themselves).
This third stage requires your membership program to establish a strong sense of community, or bust.
There’s an often-cited bit of research published in the journal Computers in Human Behaviour that reported:
Translation: your membership community can increase the amount of satisfaction someone feels when being a part of your program.
Membership websites that make money master this strategy, achieving natural growth and referrals from clients who are excited about getting their friends involved.
It also helps to develop some habits around how you engage with your community at this time.
What steps are you taking to build and foster a sense of community inside your membership site? What can you do to increase this sense of belonging?
Stage 4: Steady Growth
Membership sites are a long-term plan. Although newer entrepreneurs likely have tunnel-vision for the initial launch itself, there’s a sobering reality:
If you’re not growing, you’re not profitable.
The initial launch will likely exhaust your email list. Whether you’ve got an evergreen membership or are only o[ening your doors twice a year, somehow you have to get new names.
Since you’re in the membership site biz, one of the highest performing strategies out there is The Login Optin™ Strategy. It uses a more substantial free course as the “lead magnet,” and a membership site as the trap.
This course might be a video or audio series, written content, or a mixture of all three…which is the route Nathalie takes in her free course, the 30 Day List Building Challenge.
With a course, you can pack a ton of amazing bits of knowledge into your new opt-in. You can also create an environment where your subscribers have to keep returning to take advantage of their gift… and increase the sense of intrigue they have about buying into the paid side of things.
List building is an evergreen project and doesn’t end when you launch.
Stage 5: Tech systems, automation, and functionality
A membership site that made it through the first four stages might look something like this:
Except the “real-life” version all too often includes:
^^ That’s not made up. In the past month alone I’ve spoken personally with two wildly successful membership owners who hit this wall early on in their membership program.
While cheap (or free) tech solutions might seem like a great option, they won’t allow a membership site to make it through Stage 5.
It’s not their fault: they’re not made to scale. Just to get you started.
Tech Systems & Functionality
Upgrading a membership management plugin – or switching hosting providers – might be a hassle. But opting for one of the higher quality membership site platforms might be the only way you can move beyond this stage.
Choose a tool that’s built to help you scale with unlimited courses, clean coding, and deep integration with your CRM so you can automate everything. While it’s not a perfect fit for everyone, AccessAlly’s feature list is the perfect place to start your comparison.
Look for plugins, also, that will enable you to include the functionality you need to run your membership program.
Membership sites that require a lot of manual hand-holding are unable to scale.
But the good news is that upgrading your tech systems – from membership management plugins to email marketing systems – will allow you to take advantage of the dream most membership site owners have:
Take time to examine your current marketing automation tools to see if they will allow you to automate each part of your business.
If you haven’t hit this point yet, but have a membership program that’s projected to grow at a healthy rate, take the time to identify whether your current software setup will allow this growth to continue. It’s easier to upgrade a site of 400 members than it is to upgrade one with 4,000 members.
Stage 6: Members Who Stick Around
Some sites are on the low end with a customer lifetime of only 1-3 months.
This is a huge hurdle, and one all successful membership sites have to face and address at some point in order to become fully, solidly profitable.
Start analyzing your customer stats on a reporting dashboard to identify the key metrics that can help double or triple your current retention numbers.
Likely you’ll find that a mix of strategies are needed.
One strategy embraced by Carrie Green’s membership program, the Female Entrepreneur Association, is a scheduled monthly training course release. Members look forward excitedly to the new material, and engage in various activities to apply the information before the next month when a new training lesson is released.
Community and Relationship Building
Continue to improve and deepen the relationships established in Stage 3. As your membership matures, you’ll find that more experienced subscribers will naturally take on a leadership role, helping the newer subscribers to achieve their own great results through your program.
Content Optimization Through Gamification
Monitor and track user progress throughout your online courses and membership site. These stats will pinpoint key areas that can be tweaked to increase the lifespan of your subscribers.
Read our in-depth coverage of LMS gamification examples you can implement to reduce member cancellations.
Set a Membership Limit
Yaro Starak, who runs the popular Blog Mastermind program, decided to think outside the box and set a 6-month cap on his membership subscription, after realizing that his subscribers were canceling after 3 months, feeling as if there was “no end in sight”. This move doubled his customer retention rate… and doubled his membership income as a result.
Stage 7: The Explosion of Growth
The last stage to achieve in the evolution of your membership site business is the explosion of profits.
It’s what happens when you’ve navigated your site through the first six stages… then optimize it all so that it can literally sell itself.
Smart business owners reach this point by using tactics like smart personalization and interactive dashboards (not to mention the strategized funnels that can address various scenarios for your clients).
When you hit this level, you’re set. Because you’ve totally won over your membership subscribers and they can’t wait to see what else they can buy from you.
Plan an organic, automated pathway that leads your subscribers through each paid product you offer to keep them excited about your company. Learn more about implementing this here: The Online Course Upsell Strategy That Works Every Time
Is Your Membership Site Built To Scale Profitably?
Once again: success with your membership site doesn’t (usually) happen overnight.
If you want to experience a sustained, high level of profit with your own membership program, you may find yourself weaving in and out of these 7 stages.
Equip your team with the right training – and your membership site with the right software. Familiarize yourself with new ways to improve and uplevel your program so that it can continue to perform at a high scale.
And finally – let your automations do their work so you can step outside and enjoy life for a while. Life’s too short to spend it all on a laptop.