It’s the dream for many entrepreneurs: a solid, low-maintenance membership model that produces a constant stream of revenue.
Scores of entrepreneurs have managed to get it right, but usually not without a few glitches along the way. Take Lynda Weinman, who founded the online learning portal Lynda.com with husband Bruce Heavin in 1995. Introducing a subscription model almost broke her business.
So how can you maximise your chances of getting it right from the beginning? Understanding your audience is key, according to Birchbox subscription service co-founders Katia Beauchamp and Hayley Barna.
To do this you need to start by asking yourself three questions:
1. Who are your potential members?
Let’s say your audience is dog fanatics and you want to create a platform that’s packed with training articles and videos, along with information about different dog breeds, diets and ownership tips. You’re thinking of charging $5.99 a month for access to selected parts of your website.
To find out if your idea is viable, gather as much information as possible about the demographic of your audience. How are old they, what’s their income, education, title and geographic location? The more data you collect, the more insights you’ll have into what your users need from their membership.
2. What are your audience’s challenges?
Your dog fanatics might tell you that finding organic food for their pet is difficult or that their dog gets lonely when they’re at work or away from the house for hours on end. Having this kind of information can help you:
- Refine your membership offering.
- Plan for enhancements to your platform.
- Allocate time and resources within your team.
- Budget for future technology upgrades.
3. How are you going to solve these challenges?
Once you have a picture of who your members are likely to be and the challenges they face, you can develop a membership package that helps solves these problems. Look at those offered by your competitors and if there’s a gap in the market for what you’re proposing. Creating a SWOT analysis can help you identify this more easily.
From here you can explore suitable price points and – if you’re planning on offering a tiered membership comprising of different products and/or services – define which programs offer the greatest potential for revenue growth.
To implement your membership program you’ll need a marketing program that focuses on attracting new members as much as it does retaining them. You can read more about this in the 2016 Membership Marketing Benchmark Report.
What if your membership model doesn’t work?
If you find yourself losing members, don’t panic – there are ways to get your audience back and grow it:
- Talk to your members – your relationship with them is crucial.
- Make sure your team is highly focused on providing attentive, personal customer service – they need to care about their work.
- Revisit your data and pay close attention to indications that your members’ needs may be changing.
- Consider improving the quality of your membership service.