“Membership business” and “Creator Economy” seem to be the buzzwords these days. Everywhere you turn, influencers tout the power of building communities, having customers pay you regularly, and having more control and stability than ever before.
All that is true. Communities are power. Taking charge of your finances — more possible than ever. And building a membership business is one of the best ways to achieve both of these things. The entire Learning Management System market is projected to reach $40360 million by 2028, showing an increased interest in membership businesses.
Running a membership business can be a complete life changer. Stillefore you dive head first into the membership business, it’s important to know what you’re getting yourself into. Here are a few things no one tells you about starting a membership business:
It’s a Business, Not Magic
Many people sell the whole “membership business” idea like it’s something that happens overnight.
Like every business, it needs time and dedication to make it fruitful. You need to build a product people want, nurture leads, create marketing campaigns and focus on customer service. It’s also important to understand the legalities of running a business — because while a membership site is your own little slice of the internet, there are legal concerns to consider too. Data privacy regulation, fiscal laws, and copyrighted material are some topics you should look into.
Not All Membership Sites Are Subscription Businesses
It’s easy to think of membership websites as subscription services, especially since the terms are sometimes interchangeable. However, it’s important to remember that not all membership sites are subscription businesses.
- Monthly health and wellness programs
- Online book clubs
- Streaming video services
On the other hand, membership websites that aren’t subscription based include:
- One-time access masterclasses
- Consulting-based membership businesses
There are advantages and disadvantages to subscription membership sites and one-time access sites. It’s best to research and decide which type of membership site fits your goals best (here’s our take on subscription businesses, for example).
There Are a Lot of Advantages to Membership Sites
Subscription or not, running a membership site is an attractive proposition. It’s relatively passive income, it allows you to build relationships with your customers, and in some cases, can even become a full-time job.
Plus, building a membership site has a relatively low entry cost, especially compared to other businesses. You don’t need a lot of investment upfront to make it work, the technical side is easy to handle even if you don’t know how to code, and a laptop/ computer is essentially all you need.
…And Some Disadvantages Too
On the flip side, there are a few drawbacks to running a membership site.
In some cases, the onboarding process can be overwhelming for new members (for example: if you offer too many features). You also have to keep your active user base engaged and happy with content updates and customer service.
Furthermore, you’ll have to keep your subscription rates competitive with other services in the same space. You’ll also need to constantly work on marketing and SEO for your membership site to grow it into something successful.
The Market for Membership Sites Isn’t Static
If you think you’ll go into the membership business and the market around you will never change, then you need to reconsider your position. No market is ever static, which essentially means a lot of things can change:
- User expectations
- Legal regulations — the list goes on
For example, let’s say you’re starting a membership site for Spanish speakers to learn English for business purposes. A lot of things can change in a year, like a new EU law or a new competitor that offers the same service but with better prices.
That means it’s important to stay on top of market trends and be able to pivot as needed. That way, you can ensure your membership site remains relevant and continues to generate revenue. In conclusion, running a membership business can be a great opportunity if you know how to leverage opportunities and overcome challenges.
Not Everyone Will Succeed
You can definitely be successful with your membership site.
But just because you’re starting this business and just because there are a lot of tools and resources to help you, it doesn’t mean you are guaranteed to succeed.
Just like with every other business out there, you need to be prepared for any eventuality and make sure your foundation is strong. This means researching the market thoroughly, setting realistic goals and expectations, understanding customer needs, and ensuring your membership content over-delivers every single time.
These Three Elements Can Make or Break Your Business
There are three main elements you should consider when running a membership business:
- Providing quality content and/or services
- Helpful and timely customer support
- Driving member engagement
These are the cornerstones of any successful membership site, and you should focus on them if you want to create a sustainable business. Remember, running a membership site requires hard work and dedication. It’s not a get-rich-quick scheme, so it may take some time before you see results.
Creating Memberships Is More Than Just Sign-Ups
How successful your membership business is depends on a lot of factors. But how you define success should rely on the number of signups only, but also how engaged they are and what value they get out of it.
Sign-ups are good metrics to follow, but at the end of the day, engagement rates, customer lifetime value, and member retention are the real indicators of success.
So… Should You Run a Membership Business?
Here’s the fun part: nobody can answer that question but you.
Running a membership business takes just as much time as any other business. The key to success is to develop a strategy and stick to it, while also being flexible enough to adjust it as needed. Membership sites aren’t a get-rich-quick scheme — they’re a long-term investment that requires energy, some money, and a lot of trial and error.
If you want a low-investment opportunity to make some extra cash (and potentially scale your side gig into a full-blown creator business), a membership site is for you. If you want to break into the Creator Economy, then this is an option for you as well. And if you just want to monetize your knowledge, then a membership business is definitely for you.
But if you’re looking for quick and easy cash, then we’re sorry to say this might not be the best option for you. A membership business isn’t your way to overnight success — anyone who says otherwise is either lying or not fully aware of everything a membership site entails.
YOU decide if this is a legit opportunity for you or not.