Should You Focus on Reoccurring Revenue 1st?
Mar 24, 2021
Should you build a low ticket membership site (recurring revenue) right when you start up?
The short answer is. . . it depends.
Before we roll ahead, let’s cover a few different scenarios on when it might be the right decision for you to launch a membership site, and when it might be a little too early.
Ready?
1. How big is your Audience?
First, you have to ask yourself, do you have a large enough audience?
Remember, the audience is everything. If you put out a low ticket recurring revenue membership site ($20-$200 a month), it has to be worth your time and effort.
Because it's going to take time to build a membership site and it’s going to take time to market it every month.
If you don't have at least 5,000 and up on your email list, the volume isn’t there for you to monetize any offer under $500. So you’re better off going a different route.
2. Build the Audience or build a high ticket (signature) program
Many of our clients at The Visionary Planner wait to create a membership site because they don’t have a ton of people on their marketing list when starting out. And that’s okay.
Some of our clients have a decent amount of followers, but they haven’t really built up much authority with their followers yet for why they would actually want to join a membership program.
Instead, we encourage our clients to create a Signature Program ($500-$2000) and process, so people could understand the transformation they would get inside the membership program. Once they finish that Signature Program and that process, then the audience would want to get masterful in what they learn from their mentor.
Your audience wants to have an ongoing ability to learn and grow. And so they immediately are a great fit for the monthly membership program (FYI, we coach our students how to build their own membership site after they complete a bunch of more critical steps first).
So authority matters just as much as the size of your audience.
3. Map out your Dream Income Blueprint
To make sure you have a good business model, we suggest you also map out your Dream Income:
- How much do you need to get the ideal lifestyle you’re after?
- How much will you charge for the course, so you can hit that income goal?
- What’s the conversion rate of subscribers on your list to buyers? (HINT: Usually, 2 to 5% of your following or your warm audience is ever going to buy from you)
Mapping out your Dream Income will help you better understand what to price your products and services at so you can have the income and impact you deserve.
4. Have lead generation systems in place
Lastly, you have to build a business that keeps attracting more audience members, as people will drop off over time (usually a 20% a month attrition rate).
Your list size today (of active people who open and click your emails) is not what it will be a month from now.
Make sure you have lead generation systems that are always adding fresh leads, and that those fresh leads are always aware of your membership offer (we recommend you offer as a $1 trial, or upsell after they buy another offer from you because selling continuity is tricky! Why? Because people get nervous about forgetting to cancel or that it’ll be too hard to cancel. So build trust THEN sell membership!).
New leads are how you keep your business afloat, so have a plan in place to actively attract new customers.
Wrap Up
Deciding whether to build a membership site (recurring revenue model) or a high-ticket offer can be challenging.
If you’re struggling to build an audience, then this recurring revenue model (membership site) definitely has to be your secondary focus, as you should be focusing more on building authority in the market and helping your audience get the outcome or transformation they desire (a signature or high ticket offer).
High Ticket offers (signature offers) on the other hand, are really about learning how to do more with less. In creating that signature system and process, you’ll help differentiate yourself in the marketplace and then set up the creation of a membership site on the backside.
Your clients will know, like, and trust you from having achieved the transformation from that program and the membership site will help your audience continue to learn and grow as you continue to develop with them.
It's all about knowing how to think about your business and your business plan and when to make the right moves at the right time.
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