You’ve decided to start a membership site, which is a smart move, but where do you look for membership site ideas? And not just any ideas, proven, profitable ideas that fit your expertise?
The problem is, there are a ton of articles on the net churning out the same old suggestions for membership sites, but even if you find one model that looks promising for your situation, where do you go from there?
You’re intelligent. You know there’s no such thing as a free lunch in business. What you get, you work hard for. And membership sites are no different. Sure, you can earn income – serious income – and you can automate a lot of the processes involved in building and running a membership site.
But there’s still a lot of hard work, and risk, involved. And editing your idea to make your membership site full of transformational content may be the hardest part.
So, we’re going to walk you through how to maximize the impact of what you’re doing by showing you:
- Where to find proven, profitable, membership site ideas.
- How to choose which membership site idea to run with.
- How to validate those ideas before launching.
- How to launch without spending a fortune in time or money.
- How to reduce some of that hard work with automation.
We’ll also be including examples of membership sites and covering the challenges that could derail your dreams and how to overcome them, something most articles don’t.
But let’s start at the beginning…
Table of Contents
- What is a Membership Site?
- And what models exist for paywalls.
- Why Should I Create a Membership Site?
- How do I Charge for Content?
- How do I Build a Membership Site?
- What are the Challenges of Building and Running a Membership Site?
- Getting Your First 100 Members.
- Ways to reduce Churn Rate
- Where can I Find Profitable Membership Site Ideas?
- How do I Decide Which Membership Site to Build?
- 7 Proven Ways to Decide Which Membership Site to Build.
- How do I Validate my Membership Site Idea Before I Launch?
- 5 Ways to Validate Your Membership Site Idea Before You Launch
- Examples of Membership Sites in Proven Niches.
- 10 Proven Niches in which to Build a Profitable Membership Site.
- Building Your Own Profitable Membership Site.
- What should a membership site include?
- How do I Start a Paid Membership Website?
- What is the Best Membership Site Software?
- Are Membership Sites Profitable?
What is a Membership Site?
A membership site is any area of your website where visitors need an account to gain access. Think of it like Amazon’s ‘Look Inside’ feature on their Kindle site. You can read a certain percentage of the ebook for free, but then you need to pay to read the rest. Amazon are masters at membership sites. Just think of Prime or Kindle Unlimited.
The content you have to pay for is often called ‘gated content’ and is normally behind a paywall.
Types of paywall:
- Hard. A visitor has to pay to sign up to access any content.
- Soft. A visitor can access certain content for free, but then has to sign up to access the rest.
- Metered. This can vary but usually a visitor can access a certain amount of content per time period – say read up to 5 articles in one week, or download up to 3 images. After they have reached this figure, they have to sign up to read more content or download more images.
The vast majority of membership sites are either ‘soft’ or ‘metered.’ Amazon’s Kindle site is an example of a ‘soft’ paywall. ‘Hard’ paywalls reduce sign up numbers dramatically. Most of us are used to being able to sample something for free before committing ourselves. ‘Hard’ paywalls are best reserved for niche sites where your visitor perceives the gated information as highly valuable and difficult, if not impossible, to obtain elsewhere.
We’ve had some success with getting customers to purchase a membership site with a hard paywall on membership sites, as well, but you run into other problems along the way like churn (which we discuss on down) and customer service volume.
TIP: There are many different types of membership sites. The important point to remember is, it’s irrelevant if you believe your gated content is valuable. What counts is that your visitor believes so. Make sure you read down to the section on how to validate your membership site idea.
Why Should I Create a Membership Site?
- Recurring income. One of the hardest – and most expensive – things in business is getting that first sale and a visitor becoming a customer. Regular, repeat sales (subscriptions) are Manna from heaven and can form the revenue base from which you build the rest of your business.
- Leverage. Membership sites give you leverage to re-use content again and again. If you have a thousand – or ten thousand – members, they all use the same content, which you only create once. It’s the one-to-many content dream fulfilled!
- Cross-selling. By default, membership sites give you one of the most valuable commodities in business – a customer list. Now you can sell other content, product or services that your members would be interested in on your site or by email.
- Loyalty. Membership tends to make customers more loyal. You can encourage this by giving your membership site a community feel. We’ve tried a lot of forum options, by the way, so if you need some help figuring out how to make a functioning community, contact us.
- Credibility. Paid content is perceived as more valuable – and credible – than free. By charging for your content, you – and your brand – are also seen as more credible. This is a strong argument for making even your trial cost something — even if it’s just a dollar. People consume content that they pay for. They let free trials expire.
- Automation. Recurring income is great, but when that income is automated, that takes it up a notch. With third-party solutions or plugins (discussed later), you can automate much of the sales process.
- Beta-testing. Your members are perfect for validating new product ideas. For instance, when we started to think of what a cornerstone course for one of our clients might look like, we started by surveying the members of his membership site. That validated product has generated nearly a million dollars on its own.
How do I Charge for Content?
We’ve covered the different types of paywall – and will go into how to set these up in How do I Build a Membership Site, but first, let’s dive into the different types of subscription you can offer.
- Free or paid. This article is primarily focussed on paid membership sites. Free sites are fine, but of the list above in Why Should I Create a Membership Site?, you miss out on recurring income and credibility with the free model. Unless your business model is to create a free membership site and then make all your income selling related products/services, go for paid membership. Use a ‘soft’ paywall so your visitor can try a sample of your offering before committing.
- Recurring. You can charge a monthly – or yearly – subscription. Most people are happy to pay a small amount each month. Yearly subscriptions need to offer a decent discount over monthly to make them attractive. We generally stick with the get two months free discount — so the monthly membership may cost $49, and the annual would cost $490 — a 17% discount (or two months free).
- Lifetime. You can charge a one-off subscription, giving the member access to the content, service, or product in perpetuity. As the subscription has to be higher than a monthly – or yearly – option, this is a harder sell. Some people, however, (myself included), appreciate the savings to be made over the lifetime of the membership.
TIP: Before opting for the lifetime option, think carefully about:
- The price point. It is easy to price the one-off subscription too low and then find the cost of maintaining your lifetime members is crippling you. You can, as mentioned, offset this by cross-selling them new subscriptions for other membership sites you create, or new services/products. Our suggestion: wait until you know Customer Lifetime Value to offer a lifetime membership.
- Redundancy. Software and content go out of date, products become obsolete, services become archaic. Your lifetime members won’t be impressed if the content or service they paid for is useless to them in a year’s time. Remember to build in the cost of re-writing, updating or upgrading content and services/products.
- Loss of recurring income. One of the great benefits of membership sites is that of regular, repeat income, usually monthly. With the one-off lifetime model, you lose this valuable asset. So make sure you make it worth it for you!
- Tiered. You can have several different subscriptions, allowing the member more perks. We are all used to this with gym membership, for instance:
- The Silver Subscription allows you to use the gym on weekdays only.
- The Gold Subscription allows you to use the gym on weekends and weekdays.
- The Titanium Subscription gives you all the benefits of the Gold Subscription, plus access to any fitness classes held in the gym.
Think of value adds that will make a different tier worthwhile to your customer. What benefit can you distinctly offer them that would make a higher monthly membership worthwhile?
- Drip feed or all-in. If, say, your membership site is based around a course, then a new member receiving all the course lessons in one go can lead to overwhelm. Instead, their subscription gives them access to one module each day, or week. Alternatively they can only access the next module once they have finished the preceding one.
TIP: With the drip-feed subscription model, you can sign up members to your course even if you’ve only written the first module, or first couple of modules. So long as you stay on top of it, you can then write each module before it becomes due (not recommended for anyone who works badly under pressure). Also, you can adjust each module in response to feedback.
How do I Build a Membership Site?
- Third party solutions. You can host your membership site on a seperate website built for the purpose by a third party. For instance, if you sign up with Udemy, you can write and upload your online course and let them take care of the membership aspect.
- It saves a lot of work on your part in terms of course administration and frees up your time for marketing.
- Using a platform that already attracts thousands of visitors helps make your course instantly visible.
- It may even allow you to take advantage of the third party’s, often huge, mailing lists.
- You can piggyback off the third party’s credibility. (assuming they have some. If they don’t, why are you hosting your course there?)
- You don’t have as much control over how your course is presented. Think look and feel.
- You may not have much control over the price, or discounts given.
- You are linking your brand and reputation with a third party. Make sure the partnership will positively enhance both.
- This approach isn’t suitable for all types of membership sites.
- They take some of your money on a continuing basis (often charging a percentage of course sales or an ongoing monthly fee)
- Custom Built. You can have your membership platform designed and built for you from the ground up. You can even have your content uploaded to the site.
- You have complete control over every aspect of your membership site.
- You can have custom solutions created, rather than using cookie-cutter software.
- Custom made membership site platforms can be prohibitively expensive.
- Custom membership website designs may be much harder to maintain or alter. You could end up having to employ the same company that designed and built your site to manage it.
Alternatively you could go with a company like Kajabi that offers a lot of flexibility while providing a custom solution based on templates that simplify the whole process.
- Plugins. There are many membership site plugins, especially if you are using WordPress. Some are all-in-one packages, while with others you’ll need to install several to create a complete membership site.
All-in-plugins seem attractive, but can be complicated to set up and clunky-to-nightmarish to operate. More specific plugins tend to do one or two jobs well, and you can combine several to create a more flexible, easier to operate, end result. The downside is that if they are from different companies, there could be compatibility issues.
One answer is to go with a company that produces a plugin specifically integrated with one or more other software products to bring you a complete solution. Thrive Apprentice, for instance, is a great plugin to build and host online courses. It integrates with SendOwl which handles details like payment gateways, to bring you a complete membership site solution.
- Partnership. You can find a partner who builds the membership site so that you can focus on providing amazing content, without worrying about the backend of running it. This is what we do at Leverage Creative Group.
What are the Challenges of Building and Running a Membership Site?
Still confused about building a profitable membership site? Well, I promised I’d tackle some of the difficulties that other articles skirt around.
- Getting your first members. Ever tried standing in the street shaking an empty collection tin? People tend to be pack animals. Until they see someone else doing something, they won’t either. Which is why charities learned a long time ago to put a few cents in the collection tin before going into the street.
This is called ‘social proof’ and it works the same for your membership site. Until other people have subscribed, no one will subscribe, as it has no ‘social proof’. Here are some ways to kickstart that proof.
Getting Your First 100 Members.
- Offer free membership for the first 100 sign ups. Not the best plan if subsequent prospective members know this as it dilutes social proof. People may also perceive the membership as not valuable or be annoyed that they missed out on the free deal.
- Get your current list to come on as beta testers. This gives you the same benefit as the free membership plan, but also frames the memberships as a select group for a particular purchase.
- Offer free membership for a set time. You could offer the first month free.
- Offer discounted membership. Offer 50% off the first year’s membership.
TIP: Most offers work best when there is scarcity or a deadline involved. So offer 50% off, but only for the first 100 sign ups or if they sign up by a certain date.
- Producing content. Most people underestimate how much content you need to run a successful membership site. Members may all use the same content, but you’ll still need to create, or source, new content continuously to keep your site fresh.
Going back to Amazon, think of their superb membership model for Kindle Unlimited. You pay Amazon monthly to be a member and other people (authors) write and publish a continuous stream of new content for them to devour. Amazon then pays the authors a percentage from the subscriptions.
Even if your membership site is based around a single course, that course will probably need updating or completely rewriting much sooner than you think. Most courses only have a certain life in which they sell, like books, and then you’ll need to create another one.
Also, you have to consider what content you want as the “first impression” for your site. Can you get some interviews with experts who will elevate your reputation? Maybe share your best keynote? Be sure to think through this carefully.
- Churn rate. ‘Churn rate’ is the percentage of your members who don’t renew their subscription. Even an astute entrepreneur like Ramit Sethi had problems with churn rate (more on lessons to be learned from Ramit’s Brain Trust later). Most membership sites are like a funnel: you pour members in the top and they flow out the bottom. Hopefully, more slowly than you pour them in! Churn rates vary enormously. For instance Netflix’s churn rate is around 2-3%, while YoutubeTV is around 35% and some membership sites even higher. If you can achieve 5-10%, then you’re doing great.
Ways to reduce Churn Rate
- Set up an automated series of welcome emails for new members telling them how to get the most out of their membership and who to contact if they need help.
- Send out regular quizzes or questionnaires asking for members’ feedback on how you’re doing.
- Send out regular ‘wishlist’ emails. Members can ask for a particular feature not yet available and other members can vote on them. This way you always have a list of new features your members want and the number of members who want each feature so you can prioritize which feature to work on next.
- Make sure you provide the content or service your members want, when they want it. You can easily see what content or service is most used. Also what percentage of your members have already devoured all content of interest to them. Create fresh content regularly.
- Make sure you are only signing up members who want what is on offer. Mis-marketing or over-hyping your membership site to get more people to sign up can increase your churn rate drastically and end up costing you money.
- Take a page out of Amazon’s book. Offer members an option instead of cancelling. For instance, offer them 50% off or bonus content if they don’t cancel.
TIP: Don’t worry too much about your membership site’s churn level. It’s an inevitable part of running a membership site. Just make sure it stays within a manageable level. If it doesn’t, try the ideas above.
- Technical. Unless you’re a techie, and have a lot of time spare – which is unlikely if you are running a successful membership site – the technical side can prove overwhelming.
Apart from maintaining, updating, expanding and fixing your membership site as it grows, there is the likelihood that it will strain your software and hosting platform. You may have to switch to more sophisticated software and a dedicated server.
The only viable options are to use a third party – see How do I Build a Membership Site? – or to employ someone (like us) to cover the technical side, leaving you to concentrate on the members. However, if your membership site becomes that large and successful, then there are worse problems to have.
Where can I Find Profitable Membership Site Ideas?
Most people fall into two camps when it comes to membership sites. They either don’t spend enough time researching and validating their idea, or they spend so long doing both, that they never get around to actually creating one.
To save yourself falling into either camp, give yourself a set amount of time to research and validate your ideas, and then a deadline to have your membership site up and running.
6 Places to Find the Best Membership Site Ideas.
- Look at your successful competitors. What membership sites are they running? To find this out either:
- Go directly to each of your competitors and look for a membership feature.
- Search on your niche, for instance marketing + ‘membership’, ‘subscription’, ‘join’, ‘members only’, etc.
Finding out if your competitor’s membership site is running successfully is easier if you become a member. Look around and check out:
- How many members do they have?
- How busy are the forums? How many people are in them and how recently?
- How many people attend the live events?
- How are they monetizing the membership aside from subscriptions?
What you’re trying to do is gauge not only how many members there are, but how active they are. Active members are the ones who are likely to renew and be interested in other services or products you may have.
TIP: This is often hard from the outside because some membership site owners employ fake profiles to boost member numbers. Once you’re a member yourself, it’s easier to spot whether membership numbers and activity have been artificially inflated. If the site boasts 10,000 members and the forums are empty, then either they’re lying or there are very few active members and the churn rate is probably sky high.
- Brainstorm your audience’s biggest ‘pain’ or ‘gain’. To help you do this, use this Empathy Map Template.
- Ask your audience directly. There are several ways you can do this successfully including:
- Telephone. Go old school, it’s often still the best way.
- Skype. The advantage of skype is that you can tailor it to your customer’s preference for audio, video or telephone, therefore putting them at their ease.
- Zoom. Similar to Skype.
- Email. Your audience is already used to receiving emails from you, so asking them by email is an effective method.
- Online Survey. There are several services that let you survey your audience, free or paid:
- Google form. This is a free way to conduct a simple survey. You can place the link to the form in an email.
- Third-party survey sites. Sites like SurveyMonkey make creating surveys a cinch.
TIP: Whichever method you use to survey your audience remember:
- Keep it simple.
- Keep it short.
- Don’t ask vague questions that will still leave you guessing as to the customer’s answer.
- Talk to people in your niche. If you haven’t got an audience yet, talk to people in your field and find out what their audience’s biggest problems are and then create a membership site around them.
If you do your research properly, you should end up with at least a couple of ideas for your membership site, maybe more. You now need to reduce this down to the idea that is most likely to work for you.
7 Proven Ways to Decide Which Membership Site to Build.
- Are there other similar successful membership sites already running in your niche? Competition is a sign that there is a healthy market for your idea.
- Does your idea compliment your existing products? If your core business is creating software for manipulating digital photographs, then creating a digital photography membership site makes sense.
- Does it fit your brand? Richard Branson once said he had no hesitation in going into the airline business as it fit his brand’s image, but wouldn’t touch the funeral industry. Would your membership idea enhance and play true to your brand’s values?
- Can you get a ‘minimum viable product’ off the ground quickly and inexpensively? (See below). Beware membership site ideas that will consume vast amounts of time and money just to get them up and running.
- Can you build it without drawing too many resources from the rest of your business? This may not seem an important concern, but even Ramit Sethi fell prey to this mistake. His membership site, Ramit’s Brain Trust, cost $49 a month and generated millions of dollars in income. However, he was forced to close it down because not only was the churn rate so high, but it was simply taking up resources that he needed to grow his business elsewhere. Make sure your membership site’s growth won’t be at the expense of another, possibly more valuable, part of your business.
- Which idea could generate the highest revenue? For each idea estimate the market size for your membership site, and then the percentage of that market who will subscribe to your site.
Say there are 100,000 professional photographers and you reckon on getting 1% to join your membership site. That’s 1,000 members. Now work out the value of each customer. (For the sake of simplicity, you’ll make all your money from subscriptions). So, if like Ramit, you charge $49 a month, each member will be worth $49 x 12 = $588 a year.
Multiply this by your membership figure – 1,000 in this case – and you have a back-of-the-envelope estimate for the yearly revenue of your membership site. Assuming costs are the same for all the membership sites on your shortlist of ideas, do the same calculation for each and choose the one that brings in the greatest revenue.
TIP: Most people overestimate the market percentage they’ll capture and underestimate the costs involved in running a large, successful membership site. We always say, as a joke, “If only everyone buys…” Don’t fall into this trap!
- Don’t overlook the obvious no-brainer. Sometimes you don’t need to go through all the steps listed in this article. Sometimes the answer is clear. If you do create or sell digital photography software, it’s the obvious no-brainer to start a membership site for those people who use the software. Adobe has done just that.
TIP: Even if your membership site idea is a no-brainer, it’s still wise to validate it, which is what I’ll discuss next.
How do I Validate my Membership Site Idea Before I Launch?
Many people try and validate their membership site idea by launching. This is a mistake. You want to do this before you launch. If there are no takers, then you can move on to validating the next idea on your list. This is much faster and cheaper.
5 Ways to Validate Your Membership Site Idea Before You Launch
- Run Google adwords tests. Remember in Where Can I Find Profitable Membership Site Ideas? I said try different Google searches? Well, it makes sense if you’re searching there for membership site ideas, that your potential members are also searching Google for membership sites they can sign up to.
- Use Facebook polls. Facebook has such a huge user base, it’s certain many of your potential members will be on it. And like quizzes, people love taking polls.
- Ask your audience. In 6 Places to Find the Best Membership Site Ideas we suggested you ask your audience for membership site ideas. After all, it makes sense to run a membership site that will appeal to your present audience, unless you want to create an entirely separate income stream. If you didn’t do so before, go ask them now. If you did, go back and tell them you’re actually going to launch a membership site. Are they still interested? Will they be joining?
- Pre-sell it. Take it a step further and set up a membership subscription page and sell membership before you’ve built the site. This is the best form of validation as people actually hand over money, which is the only real way to know if there is a paying audience for your idea.
TIP: You can pre-sell without mentioning the product doesn’t exist yet, many businesses do. However, this can be a dangerous route to take if you then fail to deliver the product. It’s better to give a date in the near future that the membership site will open and offer a discount for joining now. The housing trade does it all the time. They’ll build a housing development and pre-sell the houses with a discount if you are willing to buy before the house or the infrastructure around it is finished. By being upfront, if there isn’t enough interest in the idea then you can refund people’s money and still keep your credibility.
- Launch a minimum viable product. Traditional launches are enormous money and time sucks. The business landscape is changing so rapidly nowadays, that it is too risky to commit all your resources into a massive launch. Even if you have validated your membership site idea by pre-selling it, you may have overestimated the size of your market, or underestimated the competition. Either way, launching a lean version of your membership site first is a wise move.
Examples of Membership Sites in Proven Niches.
There are almost endless possibilities when it comes to membership sites. From video streaming to tea towel and underpant subscription sites, whatever you can think of, there’s probably a membership site for it. However, to build membership websites that make money you need to concentrate on proven niches. Below, I’ve listed the top ten niches or categories in which there are both proven and profitable membership sites running.
10 Proven Niches in which to Build a Profitable Membership Site.
- Hobbies. People spend hundreds or thousands of dollars on their hobbies each year.Some much, much more. Hobby enthusiasts love to get together and talk about their passion, swap tips and buy and sell. This is the perfect environment for a thriving membership site. Gardening is one of the most popular hobbies for both sexes. Check out Fine Gardening for inspiration.
- Information. Bill Gates may have said in 1996 ‘Content is King’, but today information is king. People are willing to pay for information they perceive as valuable, especially if it makes them more money or helps advance their career. Or preferably both.
The information doesn’t need to be unavailable elsewhere, or even hard to find. If you can curate information into one place and save people time searching the internet for it, they’ll happily pay. They’ll also pay for information they can sell on in one form or another. Reuters Connect is a great example of an information membership site.
- Training or Coaching. The beauty of a training or coaching membership site is that it can be business, or non-business. It can also be based on a single course (or multiple courses). A great example of a membership business idea based around training is Youpreneur.
- Networking. Hobbyists aren’t the only people who want to get together. Professionals wanting to further their careers need to network and networking membership sites are big business. And once you’ve built a site, it’s the perfect place to cross-sell courses to further help those professionals advance their careers. Check out Xing for a fine example of a networking membership site.
- Stock. By stock, I mean photographs and videos licensed for certain, usually commercial, uses. With the explosion of the internet, these sites have become big business. One of the biggest and best-known is Adobe Stock.
- Content. Content membership sites offer blogs, videos, audios, etc. all in one place. Members can access this content to help solve problems, professional or private, or to learn new skills. Some sites have content covering different fields, while others specialize in just one area. Copyblogger is an example of a site that provides specialist content to help you become a better content marketer.
- Single goal. These membership sites concentrate on helping their members reach a single goal, such as losing weight, or improving their memory. Weight Watchers is one of the best known.
TIP: It’s important not to choose a goal that can be reached quickly. Or maintained easily. On the surface a membership site based around helping its members lose weight seems to fall into this category. However, the truth is, members may lose weight quickly, but soon find if they quit, the weight comes back on. Weight loss may seem like a short-term single-goal, but for many people it is actually a lifelong quest.
- Product training. These are similar to training membership sites, except they usually concentrate on a single product. Some products have become the default for that industry. Photoshop for instance. Kelbyone is a membership site based almost exclusively on offering training in Photoshop.
- Service. Another big category of membership sites are those based on providing a service. Codeable, for instance, matches freelancers who specialize largely in WordPress with companies and agencies looking to hire them.
- Micro-niche. To build a profitable membership site in a micro-niche you need to offset your smaller market size with higher per member spend. You can, however, capture more of the market to make up for its smaller size as there is usually less competition. Blacksocks is a, yep, that’s right, sock membership site that has done just that. For the first nine years they sold only black socks through subscription. They now have members in more than 100 countries.
Build Your Own Profitable Membership Site
Are you ready to take action and build your own membership site?
It won’t be easy. And you won’t succeed overnight.
But now you know how to start a membership site, so get after it!
And if you need any help along the way, we are here to help.