We've all seen them, membership sites, secret sites, vaults. Call them whatever you want, the basic philosophy behind them is the same. You pay a set fee and are given access to a password protected site containing specific information for members only.
I'm sure some of you have even considered starting such a site yourself, and perhaps even a few of you have. Well, if you are, make sure you read this before making a mistake that could cost you thousands.
Almost every membership site I've seen or personally joined through the years makes the same mistake, and it has nothing to do with the content offered. No. It has to do with the way they bill the people who join their sites.
How many times have you been to these sites and seen ad copy touting lifetime access for $99, $69, or $59? I'm guessing you've seen enough of them to know what I'm referring to.
While at first glance there doesn't appear to be anything wrong with this pricing model, let's look a little deeper and see where the HUGE mistake comes into play.
Let's say that for the sake of this discussion you had 100 paying customers, and you charged $97 for lifetime access to your secret member only site that is filled with tons of great information.
You've spent 6 months building the site and you know it's worth it. Let's say over the course 3 months you sign up 100 paid members. At $97 per membership you have earned yourself a nice little sum of $9700. Sounds pretty good doesn't it. I'm pretty certain that an extra $9700 in your pockets this year would come in quite handy.
But let's look at the flaw in this pricing model. First of all, the real money to be made is in the form of monthly recurring payments. You're probably saying no one will pay $97 a month for membership to your site, and maybe you're correct, but think about this. How many people would pay $19.95 for a membership into your site? The answer is probably far in excess of the 100 paid members you would get charging $97 as a onetime fee.
The key is that you charge the members $19.95 PER MONTH for membership into your site. I can tell you with absolute certainty that it is a lot easier to get someone to pay $19.95 per month for a year than it is to get them to pay $97 once.
Using those same 100 subscribers, this works out to $23,940 per year. That's more than double what you can earn charging the much higher onetime fee of $97.
But you're probably saying that some people will cancel before the 12 months is up. Sure they will. But we are conditioned to think in terms of monthly payments. Car payments, mortgages, power bills, phone bills, etc.
Spending $19.95 per month has a very different impact on our thought process than does paying $97 once. $19.95 per month for a year seems less than $97 up front. It's not, but our minds tell us something different. It's just the way we have been conditioned to think for the most part. For every member you lose, you are likely to gain 2 new ones.
Of course having a monthly membership site that uses recurring billing does require that you constantly add new and fresh material for your members, but if you are serious about what you do, that should be the easy part.
Using a monthly recurring billing system with a low monthly fee is likely to generate many more subscribers than you would get using a fixed higher pricing model.
With recurring billing your income is somewhat guaranteed from month to month. Sure, there will be variables, but as a rule, your earnings will likely rise each month whereas with fixed billing if you sold 100 memberships and never made another sale, you would never earn more than the original $9700.
Using a recurring billing system, if you were able to keep a steady membership of at least 100 paying subscribers at $19.95 per month, you would be earning $23,940 every year.
Do you see the enormous difference in earnings potential? If you are even considering a paid site of any type, please consider using monthly recurring billing. Your paid memberships will grow faster and your long term income from the project can be many times that of a fixed billing system.