Running a membership business sounds like a good gig. Imagine yourself watching dues payments roll in as you enjoy the predictability of recurring revenue. However, getting started, finding success and remaining at this place of contentment are challenging and never guaranteed.

By Amy Hufford


Test for Success

The first step is to test your idea for a membership website. Do you have members, followers or a dedicated audience already? Maybe you are working for an association, networking group, chamber of commerce, club or nonprofit. In that case, you’ve already got members and you can skip this step. If not, perhaps you are a creator who has interesting ideas or work to share. Or maybe you are a career coach or subject matter expert who wants passive income from subscription members? Here are some ways to test your idea:

  1. Start an email list where you offer valuable content at no cost — can you grow the list to a decent size? If you can’t get subscribers when the content is free, you should question if you can get members to pay for that content later.
  2. Write a blog and promote it via social media channels, groups and email listserves. You should allow people to subscribe for updates to determine the level of interest.
  3. Create your own groups, listserves, etc. on LinkedIn, Facebook or other platforms. You can create a place for people to share their problems and questions related to the point of pain they are experiencing. If you can get a following, this group can be a place where you can one day gently offer your pitch for membership to an audience you know is already interested.
  4. Create social media profiles on Twitter, Facebook, Instagram, LinkedIn, and/or YouTube–whatever channels where you think your potential members might spend time–to start sharing your wisdom for free. Your followers here can serve as your initial marketing test ground. If they are consistently sharing your content, that is one clue that what you deliver has value.

Create Value

With a traditional product-based business, you may be looking at a one-time sale per customer and hoping for word-of-mouth or social sharing to pull in additional business after that sale. Subscription and membership-based businesses are on a never-ending hamster wheel of delivering information, services or products to subscribers. The upside of the wheel is ongoing revenue. Ask yourself if you can envision continuing to create, support and deliver value to your customers for the next year or five years.

If you are a thought leader or coach hoping to sell expertise, this exercise might look like writing an editorial calendar for the next three years. If you feel like you won’t be able to create new content indefinitely, you might consider creating memberships that are a fixed length of time so that you can step off the hamster wheel. The downside of this means that the recurring revenue from your members stops after the membership term ends.

Choose the right platform

There may not be the need to reinvent the wheel or hire programmers when it comes to membership management software. There could be platforms that already offer the right mix of features for your type of membership website. You might need a learning management system, a subscription management platform or perhaps a WordPress membership plugin.

It’s not always easy to find the right software. There are many factors to consider such as:

  • Ongoing and setup costs.
  • Nice-to-have features.
  • Must-have features.
  • How they will accommodate your business processes. If you have not taken time to think through those yet; it’s time to now. This is one common area of friction that will pop up when you haven’t found a good match.

Create a matrix in the form of a spreadsheet where you can take notes as you do your research.

Measure and React

Install analytics on your site to measure traffic and visitor behavior. Google Analytics is the most popular analytics platform. With it you can set goals and identify patterns to learn key information about your site’s visitors and learn what content is most popular.

Your membership management software will also have measurement tools too; it can display which members are:

  • recently past due,
  • have upgraded/downgraded
  • or recently joined.

When you look at these groupings of members, consider what messaging would be relevant at each stage of membership. For example, in the case of new members you can do more than send the new member welcome email. Consider personal outreach on the part of yourself, staff or your board members. If an ongoing task sounds difficult, set up an email autoresponder series to foster awareness of benefits and help new members make the most of their membership. Your retention rate will thank you later.

Other key metrics to measure include:

  • Churn rate: Look at out how many members who were here on the first day of the month (or year) still remain members on the last day of the month (or year).

Amy Hufford is a Technologist at MembershipWorks. She has worked in membership technology for more than 20 years as a designer and technology consultant for membership organizations and nonprofits.

Membership stock photo by kenary820/Shutterstock