Read previous articles in this series:
- Part 1: Build Your Preeminence
- Part 2: Communication Channels
- Part 3: Technology
- Part 4: Content and Pricing
- Part 5: Triggers
- Part 6: Prelaunch and Launch
Your membership site is chugging along with the first group of students, so your attention moves from a focus on marketing during the launch phases, to serving the existing members. While you won’t cease marketing altogether, it’s not likely that you will ever push and work as hard as you did during the prelaunch and launch phases.
Attrition
There is one key metric that you have to watch carefully after launch – your attrition rate. Attrition refers to the number of people who drop out of your program, and obviously the higher your attrition, the greater the impact on your cashflow and profitability.
Online membership sites can suffer from high attrition, especially if you didn’t clearly match the offer (or what your customers perceived as the offer) to what they received. Other causes for a high attrition are a poor match between price and perceived value, over delivering content causing information paralysis or not delivering enough, providing an inferior product or service to what is available elsewhere, or completely misaligning your offer with the market you targeted or what the market wants.
From experience with my membership site the biggest cause of attrition has been too much content and/or too much work involved. Of the people who leave the program, the most common explanation is that they cannot keep up with the workload, usually accompanying a comment about how great the content is. Whether they are just being nice is up for debate, but clearly there is a need to find a balance where you over deliver on member expectations without providing so much that they can’t keep up.
In my case I feel that my members enjoy one or two new pieces of content per week but any more and they feel overwhelmed, so I usually provide at the very least one e-lesson, and provide a case study video or audio download as well. Obviously not every member is going to feel the same, but you have to attempt to satisfy the majority and accept that you can’t please all of the people, all of the time.
With information overload a prevalent problem online, you need to keep things concise and to the point. Remember that less can be more if what you provide is spot on the money when it comes to meeting the needs of your members.
There is one period, right at the beginning when you first open the doors to your site, that you need to focus on over delivering value. There has to be plenty of goodies when a person first joins, preferably even a couple of unexpected bonuses, but at the very least, you must deliver what you promised. After that you can drop the flow of new content to something that takes 1-4 hours a week to digest and another few hours to execute (at bare minimum). That’s assuming your membership site is based on education through information.
Reducing Attrition
You will get a feel for what might be the cause of attrition with your membership. Based on your assumptions and feedback from people, you can decide the best way to combat it and test different responses until you settle on an acceptable attrition rate (what is acceptable is up to you, but obviously your profit margin plays a big part in that decision).
A common cause for attrition is a need to filter members. Sometimes due to the nature of the product or service you offer and the way you market it, you attract a large quantity of people who are not quite the right target market, so you can never truly satisfy them no matter what you change. However, if you also hit a lot of members who absolutely love what you provide, it becomes a matter of slowly filtering until you isolate only the perfect customers for what you offer and accept that a large chunk of people will quit your program.
The appropriate response to a situation where there is a filtering process occurring is to raise price and focus on the core group of highly-satisfied customers you attract. Refine your offer so you keep out the type of customer not right for your membership and understand that your perfectly matched customers are willing to pay for more for what you provide – you just need to figure out exactly where the perfect customers are coming from (defining their characteristics is the first step in this process).
Once you know where your perfect customers come from you can focus future marketing efforts there and charge a higher price, potentially making more profit despite having fewer members. You work with a smaller group of clientele who benefit greatly from membership with you and disqualify those who are not appropriate. This is the ideal situation to work towards, but it can take some testing and feedback to find the right fit between what you offer and how you position yourself, to attract the perfect customers.
The Trial Period Mentality
A common problem – one I personally experience with my membership site – is the “trial period”. Many members join your program with the attitude of “I’ll try this for X amount of time, and then leave“.
To combat the trial period attitude, provide so much value every month that they decide to stay, or strategically incentivise certain periods of the membership cycle. Key periods are just before the first renewal point and the third renewal point because people often use either one month or three months as their trial period (assuming a monthly membership). Providing a special bonus for people who stay in the program past certain points and explaining that you only get the bonus if you stay, is one way to reduce the impact of the “trial period” mentality.
Content Is Not The Problem
Don’t assume your high attrition rate is because of content or product. In some cases it’s not what you provide that is the problem, it’s what members expect and what you stated as your offer that is the real cause of attrition.
If the problem you address is even slightly misaligned with the real problem your customers come to you to solve, you will experience attrition. Sometimes you can reduce attrition simply by changing how you explain what you offer and not change a single thing about the content or product that is delivered. Aligning the conversation going on in the head of your customer with what your membership site offers is critical.
Simply increasing the price you charge could be the answer, or perhaps decreasing it will work. Perhaps taking some content out or adding new resources that combat certain sticking points will do the trick. Maybe you need to change how you deliver the content, from digital to hard copy, or perhaps offer both options at different pricing points. Or maybe you need to target a completely different target market.
The answer is simple: You need to test and change your offer – and all aspects of your offer – until you find out what maximizes your return and satisfies your membership. The process of doing this however is not something that can happen quickly and isn’t always obvious. You might need to call in third party expertize to help determine why your membership site is not working how you want it to.
In the End the Market Will Decide
The market itself plays a part too. Some markets just can’t support a large membership site or are not right for the membership site model.
Don’t feel bad if your membership site doesn’t take off, instead, get busy testing alternative models to deliver what you offer.
Perhaps a home-study program at a one time fee will work better, or you could break up the content into multiple products and sell them individually. You don’t know what will work best until you test, but at least by launching a membership site you begin the process of assessing what the market wants and how best to satisfy that desire, plus you produce content. Once you have content or a product you can sell, the rest all comes down to marketing.
How Much Attrition Should You Expect?
I can’t give you a hard and fast rule for what attrition is good or bad. Some membership sites report back attrition rates as high as 50%, especially when the price is high. Based on the comments I have received from colleagues who run membership sites I have inferred that the averages seem to float around the 10%-30% range, with anything lower than 10% considered very good.
Generally there is a pattern when your attrition hits. Speaking with Andrew and Daryl Grant, who run a How To Make Money with E-books membership site priced at $49 a month, they find if a member makes it past week 16 they will likely stay a member for the long haul. Richard Schefren’s higher priced $397 a month membership site Strategic Profits, has an average member lifetime of eight months, which is considered very good for such a high priced membership.
With my membership site attrition is something I am still working on. As I said previously, given the most common explanation for leaving my program is “too much to do”, I probably need to simplify my offer. I’m presently thinking of experimenting with different pricing points and breaking up content into different offers. That being said, the students who stay in the program display characteristics of high satisfaction, so perhaps I’m simply moving through a filtration process to find my ideal members. Time will tell, as is the case for all membership sites.
Beating Attrition With Ongoing Marketing
One of the best ways to beat attrition is to set up marketing mechanisms that bring in new members faster than you lose them. Obviously you want to work on both aspects, find out why people leave and bring on new members – you want to fix a leaking ship before you fill it up with more people – but at least from a mental perspective you feel okay when you see as many new people joining your program as you do leaving.
Some membership sites work off a model that does not require members stay in the program very long. One such model sells an ebook as a lead generator for a $27, gives 100% of the revenue to affiliates and then upsells a certain number of the ebook buyers into a membership site. The average member lifetime is three months, so it’s like selling a product which has three payment installments. This business generates over a million dollars a year, which goes to show that not every membership site has to rely on current customers to survive, sometimes using a membership site as part of a sales funnel that continues to bring new people in can work too.
We covered marketing in part two of this series and the techniques you use to open communication channels never change. Post launch is a great time to test new marketing methods that you didn’t try prior to launch, or continue to use what already works or any combination of new and old methods. If you can’t think of marketing ideas then you are not trying hard enough, there are always new things to do.
Here are a few ideas for you –
- In my experience joint ventures are the best performing marketing method. If you can find new partners or do new promotions with existing partners, I believe this is the quickest way to grow a membership base.
- Pay per click advertising is something that is always available and is by far the easiest way to generate traffic quickly. Whether that traffic converts into members is a matter of optimizing your PPC ads, but this is definitely one method that every membership site owner should consider.
- Consider targeting a completely different market. Remember what you provide can be presented to a different group of people by adjusting how you present your offer, without changing the product at all.Take for example my membership site. I initially promoted specifically to the blogging world and my offer was a mentoring program and course to teach people how to make a living from blogging. I could take the same offer but instead focus on writers and present blogging (and my program) as means to make money from what they already do for a living – writing. The target market is different, but the product and offer are the same.
- You could take your marketing offline – try magazines, trade publications, newspapers, radio, television or any form of publicity you can generate offline.
- How about an article marketing strategy or banner advertising campaign, purchasing paid reviews from blogs, or search engine optimization, traffic exchanges, building content sites/blogs, promoting to ezine newsletters or you could purchase co-registration leads.
As I said, the options are endless, but of course like everyone, you have a limited pool of resources and your capabilities will dictate the marketing techniques that are right for your situation.
If your budget is limited, joint ventures, publicity, SEO and content production are methods that can be implemented with little or no financial cost – it just takes time and effort.
Onwards and Upwards
At some point, hopefully sooner rather than later, you will be content with your attrition and your ongoing marketing, and can turn your attention towards providing value for your members. If your membership site is automated or the content already complete then you can sit back and relax or move on to your next project.
I doubt there is a membership site in the world that requires no ongoing maintenance, but it is certainly possible to put in place systems to make management of your site a hands-off process. In the next part of this series we will look at how you can automate your membership site and if you so desire – sell it for a nice profit.
Yaro
Lifetime Member
Yaro, I’m thinking there is a problem with these mentoring programs. How exactly are they more beneficial then just publishing a comprehensive book using Lulu.com or something. Where I can read and digest at my own pace, in my time. And if I decide to use that knowledge, the books value increases. Referring it wouldn’t be a problem and word of mouth would help it spread.
To me, these mentoring programs seem negatively transparent, where people realize that you don’t ever really want to solve their problem. But to keep them dangling along to fill your pockets.
The big question is this. If you do know what you’re talking about, then why don’t you duplicate your own methods and create other profitable blogs? Something just isn’t right here.
You always give great answers to reposition in positive light. 🙂 Help me understand.
Great article (and great blog – just found it). I’ve run a few membership sites and what always amazes me is that what works for one will not work for another, even if the target audience is the same. I have had to develop a process with each one to capture – and keep – customers.
Another suggestion though is in the billing. I found that if people are being billed monthly that this actually gives them a reminder to leave, whereas billing them quarterly doesn’t seem to do this. Now, don’t get me wrong – I’m not suggesting that we should mislead our customers, I’m just saying that when they see their statement on a monthly basis and see the money going out each month, some people decide to cancel purely to reduce costs.
I recently joined a “mentoring” program that in my opinion should have simply been called a “course”. Yes, there is a difference. The term mentoring implies individual attention; I know of one very prominent Internet Marketer who charges $500 a month for mentoring, and it includes unlimited one-on-one emails. A course does not imply more than occasional contact with the instructor, if any at all.
I left the program I’m referring to because it was obvious all the materials were set up in autoresponders. There was a forum, and the instructor did reply occasionally, but replies were usually from other members or those the instructor brought in to help.
That’s not what mentoring is. So my point is, anyone considering a membership site should be careful to use the correct descriptive terms. If I had known it was an ecourse I might have still joined, but the disappointment is what prompted my leaving.
As far as “Get More Traffic”‘s comment, I wouldn’t expect the mentor to duplicate their methods if the method isn’t something that’s automated. I know in Yaro’s case, he’s not teaching how to make automated niche blogs, but how to build online communities. Nobody can successfully maintain a large number of them.
Yaro, I am am member of your Blog Mastermind Mentoring program and I noticed with interest your comment in this post about targeting the same content you wrote for bloggers at a different audience, namely writers, because I am a writer who has taken up blogging in order to market his novels.
Since joining your program I have experienced a tenfold increase in traffic. But my main problem with your program is “information overload”. I still haven’t done half the things that I should have done.
So if doing half the actions you suggest has increased my traffic by 10, I’m hoping when I get the other half done I will have a blog that can generate a nice little income for myself.
Online communities ehh? I like the sound of that.
Hey Get More Traffic, or should I call you Jim?
You state some of the most common questions people ask when it comes to any money making programs online.
If you teaching people how to make money, why don’t you just use what you know to make money?
Sometimes it’s simply a case that there is more money to be made teaching how to make money then using the system you are teaching (for example, one trainer makes $200,000 a year from flipping houses and makes another $1,000,000 a year from teaching people how to make $200,000 a year flipping houses). Nothing wrong with that.
In my case I don’t want to start more blogs to make more money, I want to work with people and help them make money from blogging. Hence I like to run a training program and run my own blogs.
Variety is the spice of life and that is how I choose to build my business right now, but yes, I could have devoted the resources I put into Blog Mastermind into more blogs and maybe even made more money long run…who knows!
In terms of your point about books vs programs – I definitely think they both have a place. I’ve taken courses and when I’m given a small bite size chunk of training and some specific actions, I get a lot more done compared to just handing me a book. I rarely finish books nowadays and most of the time they are not very action-orientated. Courses tend to be more focused and more specific with tasks.
To deal with info overload I think it helps to receive content over a period of time, not all at once in a book. And yes I realize you could argue why not just read the book over a period of time – it just doesn’t work that way for people. They need to feel pain – and paying a monthly fee – to motivate them to do things.
Whether you are really solving their problem with what you offer is a moot point – you NEVER solve their problem no matter what delivery method you use to educate people with. It’s up to the person to solve their problem by actioning what they learn and sometimes a book works better, sometimes a course, sometimes a series of videos – it’s simply a matter of learning styles and content dissemination methods.
Declan – Thanks for your comment and I’m glad the program is helping you get results.
Remember what I said in the mindset audios about info overload and the 80/20 rule. Find the highest leverage activities (or problems stopping you from completing the activities) and focus only on resources/training to complete them, then move on to the next.
Hi Yaro – thanks for the good article.
How is attrition rate measured? wouldn’t the result (% attrition) be different depending on the time you measure it over?
I’m trying to establish a std. method for attrition rate calc. and % attrition does not make sense unless its related to a period?
The only one that makes sense to me is avg. life of a member (in months)?
I’d appreciate your clarification on this.
Thanks.
Hi Reph, a time frame is important for sure, however what you will notice is that attrition spikes in the 30 – 60 days after launch, and particularly just after a rebill period. If you use these times as testing grounds you will have a good field.
You are right of course, avg lifetime value is the best metric for any business, however it’s tough to know this when your product is only going through it’s first run. Knowing the likely attrition for the first month is helpful when you don’t have aged data to refer to.