Do you really want to run a membership program? #RealTalk

by Erin Kelly September 3, 2019

Join me and Jenni Waldrop in talking about the good, bad and things to consider when running a membership program. It’s not all recurring revenue sweetness and light…there can absolutely be a dark side to running a membership IF you don’t know about it going in.

You can learn more about Jenni over at Fuzzy & Birch, check out her membership waitlist here or her MemberVault marketplace.

And if you want to steal the Daily Hive Mind podcast system AND get signed up for weekly (or daily) episodes in your inbox, go to membervault.co/dailyhivemind!

The episode, if you’d prefer to read.

ERIN KELLY ASKS:

Yeah, one of the most enticing scalable offers I think is a membership because it has recurring revenue which means that you have money coming in every month. Whereas, you know, if someone buys a low cost offer or a course you know, if they do a payment plan, obviously like you have the money coming in during the length of the payment plan but at some point that’s going to end. Whereas in membership, the idea is that you get people in and it grows over, your revenue grows over time and you have this amazing recurring revenue stream that’s, you know, let’s you go and sit on a beach somewhere and, and you know, have an umbrella drink. That’s the idea. That’s certainly the thing that is sold on a lot of Facebook ads is like launch a membership, never have to worry again.

I, and yet I think it’s actually one of the hardest things to sell because not only do you have to have new people coming in, but you also have to keep the members that are in your membership engaged so that they don’t turn, which is, you know, canceling the membership. The other thing, and it certainly something, and I’m actually going to have a whole episode about this and how running a SAS tool like member vaults, which is software as a service, how running a SAS tool is, is actually a lot like a membership in the sense that, you know, it’s recurring revenue and it’s low dollar values typically. You know, we’re not talking about like multiple hundred dollar payments each month from each of your members. There are memberships that do that, but most of them are usually like under a hundred dollars. And so how, you have to have a lot of numbers for that to actually, you know, become a sustainable income amount depending on what you’re looking, looking to bring on each month.

But for anyone who’s wanting to make over $10,000 through a membership, you need to have a pretty large audience. And you need to have a really enticing offer to get people into your membership. You need to make sure that your membership is retaining members. And so it was a lot of work. So yes, it’s scalable. But you’re gonna find that your time is going into other efforts so that you’re still spending quite a bit of time just in a different way. And so a lot of people that come and they’re, they’re using member vault and they want to have a membership and they have, you know, less than a hundred people on their email. So I’m like, well, this is where one day one is really valuable because you don’t have to have that many clients to hit a pretty high revenue amount versus a membership where you have to get a lot of people in.

And do I really wanted to talk to Jenny Waldrip because in my mind, she, first of all, she’s been brought user and she is consistently like our most engaged account. Like her people are crazy, crazy engaged. Now she doesn’t host her membership inside of member vault. She actually hosts all for free content in there. But I wanted to talk to you Jenny, because I think that hey, I love your content. Like your, your content is hilarious. It’s so fun. Even though I really don’t have a lot of interest in having an Etsy store like it, it’s so compelling that every time I read one of your blog, Aye, I like maybe I should come up with something that I can sell it on Etsy cause it’s so your blog posts are so good. So I really wanted to talk about the evolution of your membership, why you think it works so well.

How you get new blood coming in and how you keep your churn low. Like, tell us a little bit more from the perspective of, so people that either are considering a membership and they, they want to know a little bit more about the behind the scenes of running a successful [inaudible], a membership product, and for people that have a membership but are wanting to tweak it so that it can be a little bit more successful in their business. So I will, I think that you are definitely one of the experts here. And obviously this is going to be from the point of view of your membership. It’s not like you teach people how to run memberships, but I think that you are very wise in all things online business. And so I’m curious you know, to know a little bit more about the behind the scenes of your membership, what you’ve learned things that you thought were good ideas, but turned out not so much to be and things that are, have been really successful for you. So yeah, take it away.

JENNI WALDROP ANSWERS:

Hi Erin, thanks so much for having me on the podcast and for that slew of compliments you just threw at me. Much appreciated.

So I’m going to dive into some things about my membership, kind of how it evolved, what were worked, cautionary tales, all that good stuff that you just talked about.

So basically what you need to know, if you want to start a membership, everybody wants to do it for money. Like let’s be honest, everybody’s like, I want regular monthly income, it’s going to be awesome. Like I’m, instead of just getting one big boost from a course, I will actually get regular monthly income coming in. It’ll be predictable, it’ll be consistent and everything’s going to be fabulous and wonderful. Everything will be idealize rainbows and UNICORNS will pop out of my life. And I think that’ll ever happen again. And that’s exactly why I started a membership program about four and a half years ago because I was like, this is the way forward.

And yes, membership programs are super popular and you’re going to see more and more of them popping up over the years. But there were some things I didn’t know and there were some things I didn’t even think about. And one of the main ones is that depending on how you go about it, and this happens with most any case with a membership program, if you’re offering a service or a community, it is the most work you will ever do in your entire life. And for some people, especially people who maybe have a lot of kids, or for me, I make it my goal to work every day from about 10 30 to one 30 and I’ve been able to achieve that with a membership program, but it’s taken me four years, three staff members and a ton of money and a ton of training to get there. So yes, if you want a lot of time in your day, a membership program could get you there way, way down the road, but it’s, it’s not going to happen very quickly and you’re going to have a lot of longer days and more work to be doing in general right up front.

Because the bottom line is keeping people in a membership program, whether it’s software, whether your giving away courses or content or whether you’re doing a community or service. It is really, really difficult. And I started out charging $9 a month. My product was selling well but people were also dropping like flies. That’s what you’re referring to when you said churn. So it was a constant struggle, one step forward, two steps back all the time. So I also realized pretty quickly, hey at $9 a month I would literally have to have like you know a thousand or more people sign up for my product just to make $9,000 a month. Meanwhile, for those of you who don’t know back then, especially to run a membership program, it required quite a few pieces of software and a lot of stuff that could wind up being quite expensive. Now we have like member vault that kind of do it for us and I love that so much.

But if you want to combine other aspects like we had a community that gets really complicated really quickly. Not to mention if people come into your membership program and they’re immediately confused or they don’t know where to find something or what to do or where to go, they drop because they freak out. They’re like, oh my God, this was a waste of money. It’s a scam. And then they drop. So that is really hard. My membership offer has evolved from $9 a month to $17 a month and then we had a big jump at $97 a month when we upgraded everything. We use a custom portal. I do not recommend that for the beginner. We started that way. I would not recommend that for most people. We also started with an offer that was kind of like, here’s a blog article per week that’s premium.

So it was a premium article about premium tactics with a video tacked on and you’ve got a new one every single week. So it was a really simple offer. Now it’s a much more complex offer. People get a monthly strategy course about Etsy, they get access to the community where they can ask for help. 24 seven my team is in there pretty much all the time. They can ask for things like unlimited shop critiques. They can even pay a little bit more and get custom videos direct from me. Not to mention we have regular monthly emails and content that’s coming out in addition to the courses every single month that is specifically geared towards them. We also do things like weekly broadcasts and all kinds of other activities that my team does for me that I used to be doing completely by myself. There’s it. So there’s actually quite a bit going on in there at any given time.

And this works well because Etsy is one of those platforms that’s constantly moving and changing. So people always want to learn and they want to stay updated and then they want to make sure they’re doing the latest things so they never lose out on that monthly money and they can continue to grow up. If you have a product that isn’t gonna fill that niche, a membership like mine might not be the best option. But there are a ton of other options out there. And when we talk about what’s worked well and what hasn’t, one of my favorite things about running a membership program was when I figured out how to make it light and easy. So my membership program, the big one is not light and easy and it never will be. And I’ve accepted that and I have projects that are going to take me two years to finish.

And that’s okay for me. It might not be okay for everybody, but I’m okay with that. But when I figured out, oh, hey, there are other membership models I could be using that would work for me, that would be a lot lighter. For example, I just started doing a pay per episode podcast. So the way that that works is one episode per month is free. Anyone can listen to it. I strongly encourage you to go check it out. Because I would really love other bloggers and business owners to join me on this whole paywall podcast stuff because I am the only business owner that I’ve ever seen on my platform, which is called sub stack. So you can find me@fuzzyandbirchdotsubstack.com that’s where the podcast is currently running and you’re welcome to listen to as many free episodes as you want. So one episode per month is free and then three episodes per month only go to paying subscribers and those are the ones that are packed with value.

And the fun thing about this membership program is I basically sit down once a month and I batch record for podcasts episodes. Sometimes I have a guest, usually it’s just me telling a story or telling people how we solved a huge problem for an Etsy seller that was basically causing them to lose sales. And we fixed it and I talked to them about what we did, how it worked and how they can do it themselves. So a lot of times his podcast is eight minutes long. I think our longest one was 20 minutes and that seemed to really long, but people are happy to pay for this. It’s $11 a month. It’s done really well. I think we started charging at the end of May and it’s already, I’m really happy with where it’s at. It’s making about $2,000 a month right now. So really thrilled with that, especially since it’s way lighter than an actual membership programs.

So remember there are multiple ways to create a membership or something people pay for on a regular basis without killing yourself. And the podcast is an example of something I literally do in a week, every single month. That makes me quite a bit of money in return. So keep in mind when you’re thinking about a membership, there are things that work well and there are things that take a lot of time and are going to basically require you to perfect everything. So my big membership program, we’ve run through hundreds of email funnels, hundreds of sales pages, hundreds of onboarding methodologies, hundreds of custom website changes thousands and thousands of dollars of custom development above and beyond what I ever thought the business was even capable of spending honestly. And we’ve also run through tons of different iterations of how we get people in and how we market to people that is constantly being perfected and it’s constantly gonna have to be tweaked for the life of that product.

So that is not a light workload. I kind of liked that challenge. Some days I don’t, some days I’m like, oh my God, I just want to sit on the couch and like literally stuffed my face and pretend nothing is happening. And other days I’m like, okay, cool. Challenge accepted. So this is the sort of thing that if you’re the sort of person who loves doing a lot of work, that’s for you. But there are other ways to go about doing a membership program and a, you really need to know yourself and your audience before you pick one. The ultimate cautionary tale. I have a friend who started a membership program because she was watching how well mine was going get this four years in. So we had perfected a lot and done a lot and I was happy to walk her through stuff. But ultimately she is closing it down just six months later because as someone who sells courses online all the time, she’s like, this is so much harder for me.

I have to talk to people all the time. I have to hire team members to help because you can’t do it all yourself. I have to make sure that content is always going out. I don’t have time to answer these emails for core support and answer emails from my community members, not to mention, I feel like they get in, they get engaged at first and then it all falls off. So keeping that engagement even up in the first place and making sure people want to participate is a huge burden on you and you’re kind of the person who is orchestrating that. So think about what you want and I always suggest starting with something light and simple first and then once you get the hang of that and you sort of understand how it works, then you can move forward. One of the biggest things, the biggest ways that I keep people coming in and reduce people from dropping off, which is called churn, is I talk to my members constantly.

Anyone who sends me a super critical email, I have to talk to those people. So if you’re the sort of person whose feelings are easily hurt or you don’t want to deal with that kind of thing, be aware that in order to create a successful membership program, you’re going to hear a lot of criticism and you’re gonna have to like address that criticism in a big way. Not to mention, you might even have to get on calls with those people that are angry and talk about why they’re angry and see what their experience was. Because these were people who came to you like, I’m so excited about this. This is going to solve all my problems. And then they got in and something happened. You don’t know what you don’t know if it’s you, you know, if it was your content, you don’t know if they were just like, oh, well this was in the free portal.

Why is it in the paid portal too? Like a million things can go wrong and you need to talk to that person and find out where they were disappointed because if they feel that way, other people feel that way. So there’s a lot of talking to people involved in keeping your membership numbers up. When it comes to a bigger program that is more involved like mine, when it comes to something like a podcast you’re paying people for, they can leave comments on your podcast. That’s why I love sub stack. Basically it gives you the ability for subscribers only to leave comments so I can really see what articles resonated with them and how they feel about it. And sometimes they are like, well you said this, but I really think that it’s this and we can have that conversation in that moment and I can understand what they’re thinking and what they’re wanting and what I’m not addressing right then and there.

But with a bigger, more complex membership program, you have to physically get on the phone and talk to them. And for some people that’s terrifying and it’s work that they don’t want to do. So I would definitely keep in mind that when it comes to churn, the biggest thing is giving them content that they can’t live without. And I don’t mean just like, oh, here’s a bunch of content I created or here’s what people are asking for. I’m going to like sort of show them how to do it. Or like here’s content I’ve had for years. I mean super high quality stuff. People are begging you for stuff that’s really pertinent to what’s going on now and basically you need to make sure that it feels like they can’t get it anywhere else. It feels special. It feels like they’re getting sort of the white glove treatment.

I’ve found that as the best way to keep people coming and to make sure your stuff is high quality. And yeah, it’s, I mean it’s fun. There’s some great benefits. Like I said, at 2:00 PM today I was sitting at lunch in a restaurant I really like, it was like a salad place and I just Kinda took myself out for a little fun date. Today I went walking around shopping for groceries. I had a really slow day. There’s my phone going off and it was super fun. I got to walk in the sun all day. I got to eat the lunch I wanted to eat. I didn’t have to worry about how much it costs and I got to bop around the grocery store, like an idiot being all excited about things like almond butter cups because try those immediately. They’re amazing. I literally ate the whole bag when I got home.

It was bad. Don’t buy the whole bag, just buy two. So yes, it was great. And so those things are wonderful and I couldn’t be happier. But that doesn’t mean that I’m not constantly getting pinged by my team and putting out little fires here and there. And it also doesn’t mean that it’s easy to run a membership program. My schedule is very regimented and it has to be that way in order for me to get everything done in a month and deliver what my members expect. So if that’s not you and you rebel against structure, then think about other ways you can capitalize on membership programs. So I hope that helps. Please feel free to check me out on fuzzy and birch.com you can Google me and I just show up. It took me a long time to do that. So please use it. Yay Google. And please feel free to check out the podcast free episodes so you can kind of see what I’m talking about.

I would love for other bloggers or people who are running online businesses and are not just journalists. That’s the only people who really seem to be using sub stack right now. I’d love other bloggers to join me. I think it’d be Super Fun to have a community of people who do what we do there. And I think it’s one of the most fun ways I’ve ever done stuff like that. And not to mention it could compliment member vaults really, really beautifully. And I think it could be really, really fun to use the two together where they’re getting content and they’re getting podcasts. I think you could probably use member vault the same way. That would be really interesting, Aaron. Actually, I would love that. Well, thank you so much for inviting me. This was super fun and I hope you guys benefited from my little rant and have fun with your own membership program.