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Membership sites are lauded by many digital entrepreneurs and content creators, but the task of creating a membership site can seem challenging at the start. 

An ongoing commitment may seem like a big ask of students, and many creators speak of the psychological burden of always needing to produce more content. But for those who can find a strategy that works, successful membership sites and online communities can be profitable ventures that can also positively impact thousands of lives.

The goal of this article is to teach you how to create a membership site that can grow into a hyper-engaged online community, featuring advice from entrepreneurs who have found success building theirs.

We spoke to Tiffany Aliche from The Budgetnista for our second annual Think in Color virtual event, and got some tips on how she grew her wildly successful membership community to a 7 figure business. You can view Tiffany’s full interview, plus hear from 20+ incredible speakers here.

We also got some tips from other membership site experts, including coaching membership site expert, Mike Morrison from The Membership Guys, Kate Erickson from PodcastersParadise.com, and Rob Galvin from Teamific.

You’ll learn:

What is a membership site?

A membership site is a subscription website with gated content that members can sign up or pay to access. They are typically educational, and there is an expectation of new content on a regular basis.

Broadly, a membership site platform performs a mix of several functions for the user:

  • Access to an exclusive community
  • Allows students to support an artist or creator they identify with
  • Allows students to complete a project or program over a longer time (like a mini degree) where the content is being created/dripped over time

Membership sites differ from regular course sites in a few ways. They often include these four facets:

  1. Recurring revenue – Rather than a one-off purchase, your customers will subscribe to access your content
  2. Ongoing training – As opposed to issuing a course and publishing it, you’ll always be creating new content to share with your members
  3. Building a community – membership site students typically expect access to you, the instructor, and each other. Access to a community of like-minded people is a major selling point of most membership sites
  4. Emphasis on retention – The membership model relies on retention. By maximizing retention rates, you increase the lifetime value of your customers – ideally to a greater value than the one-time purchase price of an online course. You can’t grow membership if you’re losing members as fast as you’re gaining them. In other words, with a membership site, the sale is only the beginning of your relationship with your student

Benefits

Challenges

  1. Recurring Revenue
  2. Higher Customer Lifetime Value
  3. Lower Acquisition costs
  4. Creating community around your brand
  5. A launching point into additional monetization opportunities
  1. User retention is key
  2. A requirement to continually publish fresh new content
  3. Chicken vs Egg: What comes first, the community or the value?

 

Steps to create a membership site

Now that we understand what a membership site is, let’s take a look at the steps involved in creating one.

  1. Define your ideal member and target market
  2. Validate your membership site idea
  3. Pricing your membership site
  4. Choose your membership site platform
  5. Design your membership website
  6. Creating membership site content
  7. Building your community

1. Define your ideal member and target market

It’s important to have a clearly defined target market, with a clearly defined problem that you’re aiming to solve.

There’s a very slim chance that you’re the first person to have thought of your idea, for your audience. A competitor may be teaching your topic to a completely different audience. Understanding your target audience will help you with the next steps.

For example, Thinkific Membership site creator, Tiffany Aliche from The Budgetnista found that there was no shortage of financial advice out there, but few that catered specifically to women, and particularly black women who have felt left out of the conversation.

I want to help women, especially black women, live richer lives. Because we have been left out of the financial conversation for so long.Tiffany Aliche

 

 2. Validate your membership site idea

Before getting too wrapped up in an idea, validate it early on to avoid the pain of trying to scale a faulty product or service.

Far too often we see people steamroll ahead into building their membership site and creating content without stopping to research and verify that anyone actually wants what they’re creating. And then when they launch to the sound of crickets, they’re left scratching their head. Validate your idea. Prove that not only do people want what you’re building but that you can actually reach and compel those people into action.Mike Morrison

Here are a few tips you can use to validate your idea:

Research your competition

It’s easy to feel discouraged when you find out a competitor beat you to market, but this can actually be an advantage.

As the “last-mover”, you benefit from the fact that your competitor has already validated market demand.

Make note of what your competitors are doing well, and where you can innovate or improve to do better than them. 

Create a minimum viable product (MVP)

A book called The Lean Start-Up describes leap-of-faith assumptions as “assumptions that you take for granted, you don’t know if they’re right or wrong, you just go with them.” 

The mistake that so many people make is trying to scale a faulty product or service.Tiffany Aliche, Thinkific course creator and owner of The Budgetnista

This is fine when the stakes are low, like choosing between brands of yogurt at the store, but when you’re charting a path for your business to go down, leap-of-faith assumptions can be a dangerous waste of time and money.

Instead, The Lean Start-Up teaches entrepreneurs to build a Minimum Viable Product (MVP) – the most basic version of an idea that can help you test your product with your audience to make informed decisions early on, without building the whole thing. 

This MVP becomes the basis for the Build-Measure-Learn feedback loop, a method of rapidly prototyping your idea, testing it out with real customers, and then reiterating based on the feedback you receive.

Tiffany Aliche didn’t start out planning to create a membership site on day one. She naturally went through a series of learning milestones along the way. First, she started out teaching one-on-one and then created financial literacy classes for United Way before ultimately deciding to create her site.

It was her experiences, the feedback she received from the community she built, and a lot of hard work that ultimately led her to where she is today: running a membership site with 35,000+ members, 7 figure per month income, sponsorships, and book deals.

Another perfect example of a membership site MVP would be to create a Facebook group with live coaching calls – this would validate both the subject matter and the value of the community.

Ask your audience

You need to engage with your target audience to find out what they want to learn, what they value, and how much they’ll pay for that value.

Your family members likely aren’t the best source of feedback because they may be afraid to offend you with candid feedback, or they’re not your target market. 

Here are a few other ways to gain audience insights:

  • Search your topic on Quora and Reddit to find out what questions people have on your topic
  • Join Facebook groups frequented by your members, join discussions, and ask questions to understand what’s going through their minds
  • If you already have a Facebook group, join discussions and ask questions to understand what’s going through their minds and what content they’d like to see

Sometimes you’ll need to read between the lines – members won’t always tell you what they want, because sometimes they don’t know what they need.

 

3. Pricing your membership site

Pricing your membership site or online course is tricky. If you charge too much, you’ll hinder growth, and continually lowering your prices is not a good look. If you charge too little, you’ll erode your perceived value, and won’t make enough money to re-invest into content creation and community building.

In a world where there’s an abundance of free information out there, it’s hard to fathom why someone would pay for yours. But with a membership site or an online community, you’re not selling information. You’re selling a solution and a transformation from their current state to where they want to be.

Here are a few things to understand about pricing a membership site:

  1. Students pay for solutions – There is a group of people who will gladly pay a premium in exchange for high-quality information that is organized and delivered in a format that is convenient for them. They want to learn from and have access to an expert, and they want to pay for that privilege.
  2. Students pay for ROI – People are willing to pay more for a course or membership that has a higher perceived return on investment for them.
  3. A wider moat defends you from being undercut – The wider your moat, the more you can charge. Businesses that are difficult to replicate can command a higher price without fear of competition. For example, it’s difficult to compete if you’re teaching a rare or technical skillset, or you have a large highly engaged community, or you have a killer personal brand that people are drawn to.
  4. It’s only marginally easier to sell at a lower price point – The sales process you guide someone through in order to sell a lower priced membership probably won’t be much different from the process you guide them through to buy a high priced one.

Here are a few membership pricing tricks to consider when starting a new site from scratch:

Freemium pricing –  Free trials are a great way to get new members hooked by giving away parts of your product for free without giving away the farm

“Give, then ask,” says Thinkific membership site creator Tiffany Aliche, “I give away 50% or more of what we’re doing for free.” As people make their way through her free resources, they’re being indoctrinated into The Budgetnista community for a month by the time you see a call to action.

Even in giving, you are really planting seeds.Tiffany Aliche from The Budgetnista

Early adopter pricing – a great way to build a sense of urgency for early adopters, and build up your initial membership

Tiffany Aliche launched her membership package for the first 2000 members at $9.99 per month.

I woke up in the morning, and within the first 30 minutes we had $30,000. For the first 3 years it was $9.99 per month, and then we raised the prices.Tiffany Aliche from The Budgetnista

When the time came to raise her pricing, Tiffany grandfathered her existing members at their original price to retain them. Tiffany was surprised at the feedback from her members who saw how much value she was giving away for so long: “It’s about time.”

4. Choose a platform to host your membership site

Once you’ve defined your target member and your pricing, you’ll need to determine where your site will be hosted.

Using a WordPress membership plugin may be tempting, but you’ll find that it satisfies a few requirements, but requires technical skills or money to make it work for you.

We suggest looking into a member training platform that is built specifically for that purpose and comes out of the box with everything you need (like Thinkific).

Here are a few key features you’ll need from a membership site platform:

  • Can work with multiple payment gateways such as Stripe, Paypal, or Shopify
  • Includes membership website builder
  • Creates a login after payment
  • Allows unlimited members
  • Drip feeding of content
  • Email functionality and Integration with email providers
  • Member community discussion
  • Integration with Zoom for live webinars

 

5. Design your membership website

The design of your membership site plays an important role in the overall experience that you create for your members. 

Here are a few things to consider for your website.

Branding

The experience your customers have inside your membership site should be consistent with the experience they have with your business as a whole. Stay consistent by making sure the style and design of your membership website stays aligned with your overall branding. Essentially, your membership site should look and feel just like your other digital real estate including your main website, sales pages, downloadable assets, and social media profiles – all of which are extensions of your brand.

Don‘t create imagery and branding that aren‘t consistent throughout the entire process – from prospect/lead to buyer to member.Kate Erickson, PodcastersParadise.com

Navigation

Site navigation is a critical element of your membership site’s success. You want your students to be able to find specific pages or lessons quickly and easily. If your students find navigation difficult, it will negatively impact their overall experience as a customer. 

Main menu

Have a clearly visible main menu, which contains links to all of the important pages (excluding course content) your students will likely visit.

Lesson navigation

Include another menu that contains links to the various courses/lessons in your membership site.

Sign-up Page

Prospective members need somewhere to sign up. Your member sales page has one goal – to persuade the reader to sign up. That’s it. Every word on your sales page must contribute to the accomplishment of that goal.

The most effective sales pages for online courses typically contain most, if not all, of the elements outlined below:

  • A compelling headline (to capture attention)
  • An opening story (to introduce the problem)
  • Bullet points (to highlight benefits of the solution)
  • The solution/offer (introduce your course)
  • Bonuses (to increase perceived value)
  • Testimonials (for social proof)
  • Credibility (instructor bio)
  • FAQ (to overcome objections)
  • Pricing details (with a clear call-to-action)
  • Risk reversal (a satisfaction guarantee)

Social Proof

Social proof is an incredibly powerful persuasion technique. When potential customers see that other people have already joined your membership site and had a positive experience, it gives them confidence (and proof!) that other people are getting value from your membership site. Collect positive testimonials from your members, and use those testimonials in your marketing materials and on your membership site sales page.

Testimonials are key. Not only in getting the sale. But even more important between your current members. When they see others succeeding, it gives them motivation to do the same. It creates a viral effect on engagement and retention.Rob Galvin

 

6. Creating membership site content

At the heart of every membership site is the content itself. Therefore, it is critical that you create content and training that is both relevant and helpful to your customers, and organized in a way that makes sense.

In this section, we’ll look at three aspects of your content: 

  • The type of content you can create
  • How to come up with new content ideas
  • How often to publish new content

Diversify your content mix for different learning styles

Everyone has their own unique learning style, and it’s important to understand the different styles so you can intentionally create content tailored to all your members who may have different ways of consuming information.

Here are a few common learning styles:

  1. Kinesthetic learning is a style where students learn best while doing physical activity, rather than listening or watching a presentation, For Example, giving your students a worksheet to fill out by pen.
  2. Visual learners need to see information in order to process it, they love charts, graphs, maps, diagrams and other visuals to effectively process information.
  3. Auditory learners prefer listening to others or speaking as their primary means of acquiring information. For example, voice over slides. 

A balanced diet of content types is the best way to ensure that all of your members receive at least some of your training in their preferred learning style. Here are a few common types of content that you can have on your membership site:

  • Courses
  • Live webinars 
  • Cheat-Sheets, templates, and action plans
  • Screenshare
  • PDF slides
  • Voice over slides
  • Interviews with experts
  • Video tutorials
  • Community forums and discussion

How to come up with content ideas for a membership site

When it comes to brainstorming new content ideas for your membership site, all of the entrepreneurs we spoke to said the same thing: “ask your members.”

“We’re always listening,” said Tiffany Aliche, “I read and listen and take the pulse of what it is that people are thinking / feeling, And we take that information and help find solutions to the problems that people are saying they’re facing.” 

Tiffany schedules her content out, but always leaves a little bit of space to respond to hot topics that come up in her group. 

Even when members aren’t directly asking for a certain topic, she reads between the lines to understand what the problems are and how she can close the gap. When topics stray beyond her core expertise, or someone knows it better, Tiffany brings in guest speakers to teach her audience.

Mike Morrison had similar advice.

Our members give us an endless source of new ideas for content. We listen to their problems, frustrations and challenges and actively seek to provide the solution through the content and training we provide. We give them a place inside our membership to submit their suggestions and regularly survey them about what they’d like to see.Mike Morrison

How frequently should you create content for your membership site?

A common concern among membership site owners is how often they should create new content for their members. Unfortunately, there is no “one-size-fits-all” approach. Some membership site owners provide new training to their members every day, others every week, and some once per month. The most important thing is not how often you provide new training to your members, but that the training you do provide actually helps them and keeps them wanting more. 

  • Not enough training – you run the risk of having your students cancel their memberships
  • Too much training –  they may become overwhelmed

The trick is to find a happy middle ground – give your students enough training to keep them progressing, but not so much that they’re drowning in content.

Our recommendation: experiment with different content schedules, and check in with your members regularly to ask for feedback. If they’re getting overwhelmed, slow it down. If they’re eager for more, speed it up.

With Thinkific, you can use our Drip Feature to deliver your content to your members according to a predetermined schedule.

 

7. Building your community

One of the key components that makes a membership site successful is a community. Very few people purchase an online course just so they can access the content. For the majority of membership site students, becoming a part of a community of like-minded people is a huge incentive for signing up for (and staying engaged with) a membership site.

Discussion feature

At a minimum, your membership site should have a discussion feature enabled so that your students can ask questions and offer support to each other. A discussion feature also allows students to directly ask you questions as they progress through the training.

Facebook groups

Many membership site owners will also have a Facebook group that acts as not only a community but a way to acquire and retain members.

Facebook groups a great way to facilitate discussion, live webinars, and content updates. They’re also a common source of content ideas for many of Thinkific’s membership site creators.

Here are a few guidelines to help you manage your Facebook group:

  • Lead by example by being active in your community – engage with your members and answer their questions
  • Have group rules and don’t hesitate to enforce them in order to protect the integrity of the group and maintain a positive environment for its members
  • Hire a community manager to help you moderate the group if necessary

Related: 7 Steps To Building An Online Community (With Examples)

How to grow your membership site

Next, we’re going to cover >membership site marketing and growth hacking tips. 

There are two fundamental strategies to grow membership:

  • New members – You need to find ways to market your membership site, and ideally get referrals from existing members. 
  • Retaining existing members – What good is acquiring new members if you can’t keep them?

Know your numbers

Before we get into growth hacking, it’s important to understand a few metrics used by Membership site owners to diagnose challenges and opportunities in their business.

LTV (Lifetime Value)

Average customer lifetime value (LTV) refers to the average dollar value that a customer is worth to you over the life of their membership. 

Knowing your average customer LTV will also help you determine how much you can spend to acquire a customer and still be profitable.

Example:

  • Monthly subscription fee: $100
  • Average retention length: 8 months
  • Average customer LTV: $100 x 8 = $800

Churn Rates

Churn rate is the rate at which your students cancel their subscription. 

To calculate your monthly churn rate, divide the number of members who canceled their subscription in a given month by the total number of active members you started that month with. For the purpose of calculating churn, you ignore any new members who joined during the same time period.

Example:

  • Total active members 30 days ago: 100
  • Cancellations in past 30 days: 10
  • Monthly churn rate: 10 / 100 = 10%

Growth Rates

Your growth rate is the rate at which you are adding new members to your membership site over a specific period of time (weekly, monthly, quarterly, etc.).

To calculate your monthly growth rate, for example, you would divide the total number of active members you added in the past month by the total number of active members you had a month ago. Then, multiply that number by 100 to get a percentage.

Example:

  • Total active members 30 days ago: 480
  • New members added in past 30 days: 45
  • Growth rate: 45 / 480 = 0.094 x 100 = 9.4%

In order to run a sustainable and profitable membership site business, your growth rate needs to be greater than your churn rate.

Conversion Rates

Conversion rates apply to virtually any process where you are asking someone to take a specific action. The conversion rate of that process is the percentage of people that take that desired action.

Here are two common conversion rates that membership site owners should be tracking:

Sales page conversion rateFree trial conversion rate
To calculate your sales page conversion rate for a specific period of time, divide the number of people who signed up for membership site by the number of people who visited your sales page.

Example: 50 new members / 200 sales page visitors = 25% conversion rate

To calculate your free trial conversion rate, divide the number of people who signed up for your paid membership after completed your free trial by the number of people who signed up for your free trial.

Example: 20 paid members / 50 free trial members = 40% conversion rate

A growth hacking framework for membership sites

What does growing a membership site have in common with pirates? 

AARRR!

Dave McClure’s growth hacking framework is an easy way to visualize your acquisition funnel to identify stages users go through as they convert into revenue. The AARRR acronym comes from the stages involved in acquiring and retaining users in a way that ultimately converts them into revenue.

It’s helpful to frame your tactics across sales, marketing, and support based on these objectives.

  • Acquisition – How do customers find you?
  • Activation – How quickly can you spark their interest? 
  • Retention – How many of your customers can you retain? Why are you losing others?
  • Referral – How can you turn your customers into advocates?
  • Revenue – How can you increase revenue?
Membership site growth funnel
A simple framework for growth hacking your membership site.

You should aim to have a strategy for each stage of the funnel, and have metrics that can tell you where you’re doing well, and where you have holes to plug.

How to get new members

  • Prelaunch – Do you already have a captivated audience? Pre Launching is a great way to test the waters and fund your content development in advance
  • Webinars Hosting webinars is a great way to grow your audience, and deliver value to new prospective members before they’re ready to sign up
  • Social Media – Social media is standard for business, and membership sites are no exception. Posting free advice and recordings is a great way to build value and trust for new potential members
  • Co-Marketing – Co-hosting a webinar, or guest blogging is a great way to tap into someone else’s audience
  • Affiliate Marketing – What if you could turn your members into affiliates? With Thinkific, you can do just that

How to retain existing members

Member retention is as, or more important than getting new ones. Trying to grow a member site with a big hole in your funnel would be like spinning your tires – hard work but going nowhere.

1. Nail your onboarding process

What makes the membership site model work is member retention. If you are unable to retain your members, it will be very difficult to build a profitable membership site Business. Once the sale is made, that’s when the work of helping your students succeed begins. That is what a member onboarding process is for.

Member onboarding is the process of integrating a new student into your membership site effectively. The goal is to get them up and running, consuming your content, and experiencing positive results as quickly and as smoothly as possible.

Don’t offer a weak onboarding process; have something that makes people automatically feel like they’ve DEFINITELY made the right decision. Make new members feel as though you’re there for them.Kate Erickson PodcastersParadise.com

2. Provide excellent customer support

If you’re going to cut any corners, this is probably not a good one to cut. As we covered earlier in this article, activation and retention are critical for the long term sustainability of a membership site. A few tips on customer service:

  • Let your members know how they can get in touch with any questions, and answer within 24 hours
  • Create Welcome Videos, Frequently Asked Questions, and other assets to give your customers a self-serve option

Conclusion

Creating a successful membership site is a long game that takes persistence. It will take time to build up your audience, your platform, and find a content mix that works. 

The good news: there are many successful membership site examples from Thinkific users who were once in your shoes… and some are now seeing 7-figure income and beyond!

What are you waiting for? Create your membership site on Thinkific today.