10 Reasons Why Membership Websites Rock

By David Eedle |

An article by Patricio Robles on econsultancy.com the other week “HuffPo founder: subscription business model is for porn only” covered some of the reasons why subscription websites are a valid business model. Patricio was responding to Arianna Huffington, founder of The Huffington Post and her ill-advised comments that subscription sites are only good for weird porn (We blogged about this as well).

Patricio’s list was a good start, so with acknowledgement to her, we’ve tried to flesh out the list to come up with 10 good reasons why we reckon membership websites are the way to go.

1. Anyone can give it a try – thanks to products like Wordpress and PayPal anyone can start a paid membership website within minutes. The technology has come of age, as opposed to when we started out in the membership website business nearly ten years ago. We didn’t have anything like the resources available. Now it’s point and click easy. The technology barrier has been removed.

2. Small web sites struggle to earn from advertising – it’s a fact of life that advertising is founded around weight of numbers. Commercial, advertising driven media is an eyeballs game – it’s about creating content that you believe will attract the maximum number of viewers, the flogging off that audience to advertisers. Google Adsense and other online ad networks have created opportunities for small websites to earn revenue from advertising, but the reality is that you still need massive amounts of traffic to really make money from a pure advertising model.

3. Predictable business revenues – whether you offer monthly or annual memberships, you can predict pretty accurately your revenues over a protracted period of time, especially once you’ve been operating your website for a while and have a handle on renewal rates, attrition and other key performance indicators.

4. Easier to sell to customers than products – our main product, indeed only product, on this web site is our eBook, Niche Content Millionaire. And sales are hard work – one book at a time as Fiona likes to say (well, a dozen at a time, but get my drift). We have to pitch, and convince, visitors as to the merit of buying the book. Sure, we can offer discounts and other incentives, but it’s a one time purchase. Pitching a membership, in our experience, is easier. You are able to make promises over time about the benefits of membership, the entry price is usually much lower than a single sale product, and you can use techniques such as a 30 day trial to tip a potential customer over the purchase line.

5. Insulated against changing conditions – everyone is now very sensitive to how the world is changing, times are tough in most markets and parts of the world. Membership websites that successfully lock customers into a loyal pattern of membership and behaviour can ride out short term downturns, most especially if you successfully adapt your content and service to suit the times. If your members are nervous about the world around them, then you can be the stable voice that hold their hands over the bumps and dips.

6. Easy to understand business dynamics – I can successfully describe a membership website business model to my eight year old. The metrics involved are distinct, measurable and open to meaningful analysis. You can calculate renewal rates, cost of acquisition, life time value.

7. Infinite possibilities – if you can think of a topic, you can create a membership website around it. The niches are endless, and with the global internet audience numbering hundreds of millions from every country and culture, there’s an audience out there providing you can find a way to connect with them.

8. The little people can change the world – you, an internet connection and a membership website can change the world – or at least your little part of the world. You can make a difference to a group of people – your members – if you provide a valuable, useful tool to help them in their personal or professional lives. If you are delivering what they want, when they need it, you are providing a service that can enable them to lead better lives, to be more successful, to achieve their goals. In our case a key service we provided was to help people find a job. And we were always meeting people who had found employment via our website.

9. Highly rewarding for you personally – my absolute favourite part of owning a membership website was the opportunity to interact with our members. Once in a while we’d hold offline events where members could come together, have a few drinks, swap stories, form new connections and generally socialize. I personally found spending time with our members enormously rewarding.

10. Easier to sell to a purchaser – taking into account most of the previous nine points, when time comes to sell your website you’ll find it extremely easy to document, describe and demonstrate the benefits of your website to a potential purchaser. Locked in revenue, loyal customers and quality content equal a winning combination in the eyes of investors. Even if they are not expert in your particular content niche, a good business person can still grasp high quality fundamentals, yielding a stronger payout for you.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites.

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