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How to Build a Profitable Membership Website

I’m not going to lie…

Selling membership is hard. But, if you execute properly, a membership website will absolutely change the economics of your business. More on how this works in just a second.

First, know that I’ve built successful membership communities in multiple niches from men’s clothing to survival and preparedness to finance and investing.  We have thousands of members in each of these communities and I’ve learned — through trial and error — how to build profitable membership sites.

Our membership site at Digital Marketer is called Digital Marketer Lab

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In the survival space we have The Lamplighter Society…

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I’m about to share with you what I know about building a profitable membership website the right way, the first time.

But let’s start with the “why”…

Why Membership Websites?

Every business has a break even, “keep the lights on” revenue number.

My first goal with any membership website is to achieve that break even number in recurring monthly membership fees.

Here’s why…

First, it’s a hell of a feeling entering each month knowing all costs are covered.  Everything else is profit.

Second, and more importantly, when recurring billings get us to break even — we can take more risks.   We can deviate from the norm — where the real breakthroughs occur.  When revenue is unpredictable from month to month – it keeps you from taking risks. And that ain’t good.

Why Membership is Hard to Sell

There are other “continuity” or recurring billing models besides membership websites.  And each has its own set of marketing challenges.

There are consumable services like…

  • Cable television
  • Cell phone service
  • Web server

Consumable products like…

  • Dollar Shave Club
  • Birchbox
  • Craft Coffee

And let’s not forget Software As A Service (SAAS) companies like…

  • Salesforce CRM
  • Adobe Creative Cloud
  • Basecamp

But I would argue that each of the models above are easier to market than a membership site for one big reason…

The value of a membership site is difficult to explain.  

And, as a rule, if it’s difficult to explain — it’s difficult to sell.  But I’m going to show you how to get around this issue in just a second.

First, allow me to prove my point.

  • A Verizon cell phone plan allows you to make calls, text and otherwise stay connected with the outside world. The offer is simple and clear… and thus easy to sell.
  • Dollar Shave Club will mail you high quality razors once per month so you don’t have to get them from the store. Clear.
  • Adobe Creative Cloud gets you access to the latest versions of all your favorite design software. Crystal clear.

But membership sites are different.

A membership site is a vague, amorphous “thing” often containing multiple components that are difficult to explain.

I’ll say it again in case you missed it: difficult to explain = hard to sell.

How to Sell Membership

But selling access to a membership website isn’t as hard as it might seem — if you do it right.

It’s far easier to sell membership to someone that has already bought something from you — even if that “something” is a low-dollar offer. In fact, as a rule, I don’t make a direct membership offer to cold traffic.

Instead, I make membership offers to BUYERS.

Let me show you what I mean…

The marketing funnel we use to sell membership is the standard, 5-step CVO funnel. (NOTE: To learn more about the CVO funnel click here to read this article by Ryan Deiss.)

Here’s a diagram of that funnel…

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In this 5-step funnel, the membership offer is made in the Core Offer slot or the Profit Maximizer slot.  In other words, it is NEVER the first offer.

Remember, the key to selling membership is to make offers to buyers, not cold leads. But all buyers are not created equal. If you make the right offer to a lead they become much more likely to buy membership.

Here’s the trick…

A Chunk of Value

Not only is it easier to sell membership to those that have already purchased from you — it’s also easier if they’ve purchased a particular kind of offer.

We call it a “Splinter Offer.”

Your membership site is made up of a number of components. For example, our membership site (Digital Marketer Lab) is made up of…

  • Webinar Trainings – We have two types of webinar trainings (Office Hours and What’s Working Now) that deliver educational content and directly answer customer questions.
  • Digital Marketer Engage – Our private Facebook Mastermind Group where you can give and get help from the Digital Marketer team and the community as a whole.
  • Execution Plans – A library of step by step checklists showing our customers exactly how to execute on a specific marketing tactic.

Here’s what the Execution Plan library looks like…

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As you can see, the Execution Plans are made up of SPECIFIC trainings that provide a SPECIFIC end result for a SPECIFIC segment of our market.

Bingo.

If we “splinter” one of these trainings out of our membership offer and put it on the front end of our funnel — we’re in business.

Here’s why…

Remember that the problem with selling membership is that the benefit is vague, amorphous and difficult to explain.

If somebody asked me, “What’s in Digital Marketer Lab?”

My answer would be, “Well… umm… a lot of stuff that will get you more leads and sales for your business.”

Not good.

But a splinter of Digital Marketer Lab has all the specificity and clarity of a Verizon cell phone plan or a Dollar Shave club subscription.

The benefit is specific. The offer is crystal clear.

The “splintered” offer speaks to a SPECIFIC desired end result.

Are you seeing it? Look at these two offers…

  • Facebook Social List Building – Create and scale highly successful Facebook ad campaigns that generate leads and sales.
  • How to Get Your First 1,000 Blog Subscribers and More – Optimize your blog for lead capture and grab your first 1000 subscribers.

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Both of the above are part of the greater membership site, Digital Marketer Lab.

And… both have been plucked out of the membership site and positioned on the front end of separate funnels. These offers are made at a ridiculously low price ($7 usually) and used to attract a SPECIFIC type of buyer with a SPECIFIC offer that leads to a SPECIFIC desired end result.

Specificity sells folks.

It’s important to note that this $7 front end offer is not intended to make us profitable. It is a Tripwire Offer and is only there to generate as many buyers as possible. (Again, for more on this, read this article from Ryan Deiss.)

Splinter Again

Sometimes we send cold traffic directly to the Tripwire offer — particularly if that low-dollar offer is a physical product as opposed to an information product.

But often, and to cold traffic especially, we will “splinter” a piece of the Tripwire offer and place it on the front end of the funnel as a Lead Magnet.

The Lead Magnet is a SPECIFIC chunk of value that solves a SPECIFIC problem for a SPECIFIC segment of the market. We offer the Lead Magnet in exchange for a prospect’s contact information. (Learn more about Lead Magnets here)

Let’s take the How to Get Your First 1,000 Blog Subscribers and More Execution Plan offer for example. To generate leads for this $7 offer (that eventually sells Digital Marketer Lab) – we splintered a chunk of value out of this Execution Plan and placed it on the front end as a Lead Magnet.

In this case, the Lead Magnet is called 212 Blog Post Ideas. It’s a very specific, clear offer that a prospect would desire if they want to grow their business using a blog.

The landing page for this Lead Magnet looks like this…

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Are you seeing the power of this?

So, here’s what the entire funnel looks like…

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But We’re Not Done…

We still haven’t addressed why these “front end” Lead Magnet and Tripwire offers increase our ability to sell membership.

Here’s the thing…

These buyers have already displayed interest in a “desired end result” and it’s much easier to now sell them membership — assuming the desired end result remains the same.

Here’s what I mean…

One SPECIFIC desired end result for bloggers is…

Get more blog subscribers to increase leads and sales.

And one SPECIFIC desired end result for Facebook advertisers is…

Master Facebook advertising to increase leads and sales.

Notice that in both cases these buyers wanted the same underlying end result — increase leads and sales. These two separate “splinter” offers provide two different and specific ways of achieving that end result.

It’s much easier to now make this sale…

“You bought the How to Get Your First 1,000 Blog Subscribers and More Execution Plan and you’re well on your way to generating more leads and sales from your blog.

BUT… this Execution Plan is actually only a portion of a larger set of Execution Plans that will get you more leads and sales.

Here’s everything you get if you join our membership site…”

The membership offer now works because it’s being made to buyers that have a displayed an interest in a desired end result.

They’ve purchased a “splinter” of the membership offer and it’s now much easier to explain this larger, amorphous “thing”.

Let’s look at each page in a funnel that we’ve been running for quite some time to acquire new members.

Here’s the Lead Magnet Squeeze Page…

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Prospects that opt in for the 212 Blog Post Ideas Lead Magnet are made the $7 Tripwire offer called “How to Get Your First 1,000 Subscribers and More”. The Tripwire is sold through a Video Sales Letter.

Here is one of the slides in that sales presentation…

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And those that buy the Tripwire offer are made the offer for Digital Marketer Lab membership.  This offer is also sold through a video sales letter (VSL) and here’s one of the slides in that presentation…

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This sequence allows us to make a clear membership offer to BUYERS.  And the sequence makes all the difference in the world.

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