Diversified and recurring revenue streams have never been more appealing as businesses work to future-proof, reach more people and use their IP to serve on a deeper level – shifting from free marketing content to guided learning and wraparound support.
Where memberships were once the preserve of wine-lovers and streaming services, recent years have seen businesses of all shapes and sizes realising, and capitalising on, the opportunity they’ve been missing.
We’re now seeing service-based businesses sharing their expertise in new ways and reaching whole new customer segments. Dietitians, marketers, naturopaths, coaches, interior designers, stylists and more, all finding an entry point into what is potentially an entirely different market. And it’s not just a reflex in a difficult climate, membership groups make sense. Delivered effectively, they can mean:
- A lower cost of business – The content you create and value you provide is totally scalable. It also offers greater scope for automation and processes, and is easier to outsource.
- Lower marketing costs – Once you have a customer on board, you don’t have to spend more money marketing to them again. You do, however, have to retain them (more on that later).
- Accumulating proprietary data – You’ll have access to a wealth of customer insights, allowing you to track and understand behaviour, needs and wants, and respond accordingly.
- Further diversification: With a happy body of members, there is huge opportunity to cross and up-sell across your service menu.
To enjoy the benefits though, you’ll have to do more than pull together your content back catalogue and call it a membership program. Done well they’re an intelligently targeted, high value offering for a specific client group. Executed poorly, they’re a lot of effort for little return (for both you and your customers).
At the core of every success story is a tailored solution to very specific problems, which typically includes quality information and/or resources as well as the sense of direct access to expertise or a like-minded community. And underpinning all that are these three critical success factors:
Understand the need
It sounds obvious, but it’s the hurdle at which so many businesses fall. You have to know who you’re selling to and why they need it. If you want people to pay money, you have to deliver real value.
Build an audience and start to understand what they want to get from you – speak to them, survey them and gather data. Then develop a service that meets those needs, in terms of content, delivery and price-point.
The worst place to start is by developing a program based on what you know and working backwards to your potential customer. At their best, memberships create a focused and compelling relationship between you and your ideal customer – that can’t be achieved unless customer-centricity is your guiding principle.
A great example, from one of my own clients, is a group focused on wholefoods and low-tox living – helping families create a diet and household environment that nurtures and supports their health. It not only steps them through how and where they can make changes, provides nutritional guidance and even recipes, it even gives them access to a community of like-minded people with whom to share and connect. It’s a one-stop shop for a highly specific interest or problem.
Have a process
When someone joins, they must be able to see a clear structure and pathway, stepping them through how their membership can help them achieve their core objective.
More content is not better. Instead, you have to find ways to curate your encyclopaedic knowledge and deploy it to maximum effect. You can choose any content format you like – worksheets and eBooks, audio, videos, webinars… whatever works for you (and of course your customers) – but it has to be thoughtfully and strategically delivered.
People don’t join memberships to download reams of information, they join them for the hand-holding, the accountability, the encouragement – a whole host of reasons. If they just wanted to immerse themselves in reading, they’d go to the library or stay on Google. By making the choice to join your group, they’ve reached out for expert help tailored to their specific challenges; give them a clear roadmap.
Focus on retention
If you’ve fallen prey to revolving door syndrome – watching members leave as quickly as you recruit them – then you’ve kind of missed the whole point of the membership model. While it’s certainly not a ‘set and forget’ scenario, you should be aiming for recurring revenue.
I always find the notion of memberships being ‘passive income’ incredibly disingenuous. Delivering real value takes time and it takes effort, and that can’t stop after sign-up; you must refresh your offering and find ways to continually engage with your members, regardless of where they are on their journey.
Start your retention strategy by developing a robust onboarding process – coach your members through how they can get the most out of their investment. After that, keep a keen eye on member experience, ensuring they’re given ample reason to stay. That might include regular content drops, live interaction, community connection, guest experts. Whatever you do, make sure your presence – and your value – are felt at every turn.
The most successful membership groups strike the right balance when it comes to value vs saturation. You want your members to be able to access the information and support they need and to have a clear understanding of the value you bring, without overwhelming or over-communicating. It’s a fine line, but it’s the difference between high lifetime value and high churn.
In short, whether you have a strong existing brand or are just starting out, the membership bandwagon might well be worth hopping on. Understand your customers’ challenges and pain points, then think about the knowledge that lies behind your product or service- how could that be curated to deliver a meaningful educational or supportive experience? Then go forth and solve their problems!