How to sell online memberships: all you need to know
Since 2010, the Creator Economy has been powered by a wave of software and internet platforms making it easy to buy and sell products and services online.
Digital information products, including ebooks and PDFs, have represented a first pillar of this new economy, and online courses have represented a second.
Over the past decade, many creators have become accustomed to thinking about products and courses as the most effective way to earn money online (and to enjoy the freedom to work, learn, and live how they want). Until recently, online memberships hadn’t yet emerged as a solid third pillar of the Creator Economy.
Today, internet platforms have built first-class technology solutions to enable people and businesses to create, manage, and develop online memberships. These solutions are now deeply integrated within digital ecosystems and easily implemented across applications and platforms.
Now creators and businesses are catching up to the reality that offering online memberships is often the fastest and easiest on-ramp to the Creator Economy.
Delivering value to customers on a regular basis is attractive to customers and creators alike; and it can be less intimidating than building a product or course from scratch. Memberships create recurring, predictable, and passive income with the potential to compound over time.
Many smart and savvy creators understand one effective way to successfully sell digital products online is to start by selling information-rich newsletters and services in the form of a weekly, monthly, quarterly, or annual subscription-based membership. Doing so, they repeatedly deliver value to their customers.
This creates a tight feedback loop with them, allowing them to refine their offerings and pivot to what works best. This approach is simple and elegant for the customer, and powerful for the creator.
In this introduction to online memberships, you will learn:
- What is a membership site?
- Selling service-based memberships
- Online membership ideas that sell
- Choosing the best platform to sell online memberships
- Platforms for hosting a membership community
- Top tips for membership selling success
- Cons of selling online memberships
What is an Online Membership?
It’s a business model where subscribers or members pay a one-time or recurring fee for a product or service.
Think of it like your local gym membership, but online.
The membership cost could be a one-time payment for lifetime access or a recurring subscription with a fixed monthly or annual rate.
Many successful membership creators offer multiple membership tiers, with exclusive content available to anybody who registers and others only available to paying members.
Selling Service-based Memberships
Now that you know what an online membership is, let’s consider the rationale for selling your services via a membership. Doing so offers three significant benefits:
1. You Can Scale Faster
Because your service gets sold online, scaling is much easier than scaling with physical goods.
Scaling up and growing as a business simply means that more people are subscribing to your services.
The important thing here is to prove to your customers that they're paying for something valuable even if it's just a base subscription offer.
And one of the best parts is that the work remains the same no matter if you have one subscriber or one thousand subscribers.
2. It Provides a Predictable Monthly Income
A subscription or membership model will lead to greater financial clarity.
Well now that you know how many people will be paying you how much each month, it’s much easier to predict your business income.
This allows you to focus on attracting new customers and not worry about cash flow issues.
And if you offer an annual membership option then many times you can collect a large amount of money upfront.
3. Understand Your Customers Better
Evaluating data is one of the most important skills to develop as a business owner, and learning how to do so does not require an academic degree.
Understanding your customers is key to keeping them happy and attracting new ones.
Even data such as “In which month was service #1 bought the most?” or “What option in my tiered offering is the most popular?” can provide valuable insights into your customers’ behavior.
You might use this information to improve your entire offering by redesigning your pricing structure to include an extra tier that keeps more customers satisfied, or you could use it to determine when you should release new material.
Learn how to use this data, and you can make smarter decisions to help grow your business. Understanding your attrition rate, for example, can reveal areas where you are not providing enough value while knowing your client demographics can aid in the optimization of your acquisition approach.
The outcome of the data should be a better customer experience and increased revenue for you.
Online Membership Ideas that Sell
1. Digital publications
There's a good chance you're an expert in something.
Because of this you can create a membership that sits in your pocket of the internet.
And the most successful online membership sellers are those that can harness their knowledge in their field of expertise in educational content.
Digital publications are one way to share your expertise with the rest of the world. Instead of trying to sell a publication one at a time, you can use a membership model to provide access to your readers as soon as you publish it on an ongoing basis.
If you can tap into the thirst for knowledge in a field that you have significant experience in, then selling digital publications through memberships might be the right thing for you.
In an in-depth profile last year, we described how Dru Riley created Trends.VC, a successful newsletter subscription for founders discovering new markets and ideas.
Some creators choose to offer memberships in the form of a course. PhysioSchool.ca presents “PT Application Booster,” a course designed to help aspiring Physical Therapists through the pre-interview phase of their physio school applications.
2. Consultancy services
Consultancy services as a membership is a chance for you to give members-only access to people who want to learn from you.
For example, a UI designer could start a consultancy service where she teaches aspiring designers skills and tactics to level up their UI design career as quickly as possible. By packaging her services in a membership format, she can ensure that her members will gain immense value and continue their monthly payments.
Twice a month, for example, Robert Gruler, Esq., convenes a small group of lawyers and legal practitioners, and Robert shares the latest strategies working to improve his firm’s performance.
Providing services through a membership can be surprisingly simple. Harsh Strongman, the creator of Life Math Money (LMM), sells a monthly, semi-annual, and annual membership to gain access to the LMM crypto portfolio. Members can see which coins he owns, why he bought them, and his investment philosophy. They also receive updates every time he changes the portfolio.
3. Access to a community or forum
Many creators foster valuable and focused communities on Facebook, Circle, Discord, Slack, and other platforms. While it’s not easy to build and maintain a community, the rewards are manifold.
Fitting your membership into a community model will result in loyal customers who will expect and happily pay for quality. Your customers will also pay to connect with other members. They’ll create lasting relationships inside your community and their lifetime value will increase.
Selling access to communities and forums is an intense commitment, but it’s become popular and effective:
- West Coast Dealz teaches retail and online arbitrage and connects hundreds of resellers together while providing access to a portfolio of constantly updated products;
- Gumroad’s Head of Product, Daniel Vassallo, is open and transparent in his private Circle group “Profit and Loss” about how he makes a living on the internet;
- Armando Juan Pantoja leads “Chess Not Checkers,” an investment strategy community interacting on Discord; and
- Giff Constable brings together product leaders for small, private, weekly conversations to discuss difficult business decisions and improve decision-making over time.
Choosing the Best Platform to Sell Online Memberships
Now that you have the ideas of what online memberships are, let's discuss how to choose the best memberships platform to sell them.
There's no need to employ a development team to build you a custom platform to sell your membership services (unless that's in your roadmap) because there are plenty of ready-made platforms available.
When searching for the perfect overall platform, look for one that allows for:
- discount codes which can be helpful when onboarding your first few customers
- automated billing, which allows members to pay at predetermined intervals (monthly, yearly, etc.)
- analytics data to help you better understand your customers.
Gumroad has a checkout and payment system built-in as well as the option for fixed-length subscriptions (e.g. a 3-month course).
Here’s how to launch a Gumroad membership today.
Plus, take a look at all the features on Gumroad for yourself to get a better idea of what would be useful for your use case.
Watch a quick overview of how easy it is to get started with Gumroad Memberships:
In addition to the examples above, take inspiration from Jesse Enkamp, a "Karate Nerd" athlete, Amazon best-selling book, entrepreneur, traveler, educator, and founder of Seishin International.
Enkamp utilizes Gumroad to sell a number of products, including a popular membership product for his Karate Nerds club, which is a private online video subscription.
In exchange for regular revenue, his club provides recurring value. Every week, he provides fresh films to his fellow karate nerds. Enkamp has hit six figures in sales multiple times with Gumroad.
Platforms to Host your Memberships
There are so many platforms you can use to host your membership.
If it’s not a newsletter membership, it’s often a community membership.
Here are 5 popular platforms to consider:
Top Tips for Membership Selling Success
Now that you know what membership sites are and why to sell them, here are a few tips on how these ideas can turn into revenue.
Tiered Pricing Structure
Many successful membership communities offer multiple tiers and terms, including monthly, quarterly, annual, and lifetime access plans. A tiered pricing structure can be suitable for members of varying financial commitment levels.
This also offers the opportunity for cheaper price-point members to upgrade down the road once they are convinced they can get more value by leveling their membership tier up a notch.
You can also offer limited access to your content (an idea here could be to split your content into “Core” and “Advanced” sections) while the higher price could include everything in your membership offer plus extras.
Doing competitor research to check their services and pricing can help you level up the game.
More importantly, if it’s valuable, people will pay for it.
Offer an Annual Membership
Annual memberships are a great way to drive a substantial income upfront.
This is perfect for creators who want to reinvest revenue back into their products.
One way to sell the annual membership is to either:
- Offer a limited amount of annual memberships. This creates urgency.
- Offer exclusive content for annual membership members.
Many customers rather pay upfront then add another monthly bill.
This option solves that problem.
Focus on Upselling
Once members are signed up, you have the opportunity to upsell. The focus here should not be on how you can make more money, but rather on how you can provide more value to your existing members.
There will always be members who want more. It’s your responsibility to find ways to satisfy their desire by offering additional features to your subscription at an extra cost.
By doing this, you are raising your recurring monthly income without needing to onboard additional customers.
Customers are willing to pay for more as long as you can address their concerns and you give valuable content.
Use ‘Freemium’ to Your Advantage
Like a good three-course meal where the starter has you curious and excited for more, you can structure your membership sign-up process to first involve a free offering of your services.
While it's crucial to not give away your best content for free, there is an opportunity to give potential members a “taste test” of what's to come as a member.
Customers will view this as an act of good faith and, if your content is good, they’ll be sold even without further marketing from your side.
Value explains itself.
Focus on Conversion Optimization
Being able to sell a membership to someone is about convincing them of the value they will get from being a part of the community or having access to your content.
Consumers won’t know about the value on the inside, and that’s why it’s your job to convince them.
For that reason, you must focus on optimizing the conversion process so that you’re not unnecessarily losing potential customers due to any preventable reasons.
This is why creating a high-converting Gumroad sales page is essential.
Here are a few tactics to use to increase your conversion rate:
- Show customers a sample of the course or membership. The idea here is to give customers a little insight into exactly the kind of quality they can expect from you.
- Provide a clear way for customers to cancel their subscriptions or memberships. It can even be a good marketing strategy to say they can "cancel anytime" or "no lock-in period."
- Offer a discounted rate or a free trial to show customers that they’re getting extra value by acting immediately. Some people don’t buy simply because they’re afraid to commit so adding something extra to give them that little extra push can be beneficial.
- Offer an extra signing-up incentive such as bonus content or an extra month for their membership. You can also give a referral bonus or promo code.
Make the Value of Subscribing Clear
It’s easy to talk about what your membership is about, but the key focus should be on the outcome of what members will get.
What problem will it solve?
How will it help them?
How will it change their lives?
Focus on highlighting value, particularly the benefit of becoming a member, and everything else will follow.
Customers subscribe to things that improve areas of their lives.
Cons of Selling Online Memberships
There are a few drawbacks to creating a membership website that you should be aware such as the following:
Relevance. To guarantee that your members receive relevant content, you must stay current on news, trends, and changes in your niche.
Regular updates. Depending on the services you provide, you may need to update your content frequently. If the membership package includes a monthly webinar, for example, you must organize and deliver a monthly webinar. It's always preferable to plan ahead of time, brainstorm, and research.
Technical expertise. While some memberships can be managed through email, the majority of top membership sites are managed online, which necessitates technical knowledge. It's not just your subject matter expertise, but the tools and services to run your membership sites.
In the business of recurring monthly income, retaining customers is king.
The membership model has several benefits that will leave you less stressed and with more money in your pocket at the end of the day.
If done correctly, this arrangement will also benefit your members, creating a nice reciprocal network effect where pleased members naturally increase the community by recruiting new members.
Focus on creating quality content that aligns with your skillset. Use a trusted membership-selling platform like Gumroad and start growing your membership community today!
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