How To Sell A Recurring Membership Site Subscription

How do you sell a recurring membership online? Let’s dive underneath the usual quickie tactics and look at what TRULY makes your membership offer sell itself.

Membership sites are best known for the recurring monthly revenue. That recurring income gives you a compounding effect that allows your income to grow without having to put all your pressure onto constantly finding new subscribers.

Case in point, let’s look at the numbers of a mythical membership site. This site has the following numbers:

  • It costs $20/month.
  • It has 5% member churn (which means that, every month, about 5% of the members cancel)

If you enroll just 20 new members monthly (that would be roughly 1 member every 1.5 days), then here’s a rough schedule of your projected income in the first 12 months:

membership-site-revenue

One sale every day and a half of $20, yet it compounds up to the point where you’re generating $3,665.74/month by the end of the first year. And it would just keep on going.

Now, we could talk for awhile on the topic of member retention and how to get members to stick around for as long as possible. But, none of that matters if they don’t sign up in the first place.

So, how do you get them started?

How do you go about selling a recurring subscription to your membership site?

It Is All About Your Offer

Some believe that selling a recurring subscription is just inherently harder than a one-time offer. I thought this for a long time. The idea was that people are hesitant to get into recurring subscriptions because of the commitment.

But, look at your monthly budget and look at the number of recurring bills you likely pay every month:

  • Electric bill
  • Your cell phone (and you actually get into a contract that requires you to continue paying for it)
  • Your cable bill
  • Netflix
  • Your web host

You get the idea. It isn’t that we have an issue with recurring billing at all. In fact, we PREFER it. Most people would rather commit to paying that cell phone bill for 24 full months just to avoid the upfront costs of your cell phone.

When we think about our online memberships, it isn’t the recurring nature of it that is the big sticking point in selling it. It is the OFFER.

We will pay every month for something that we cannot do without. We will pay every month for something that is difficult to walk away from (it is called a pain of disconnect). But, at the core, we will gladly pay monthly for something which we SEE is giving us more VALUE each month than what we are being asked to pay.

costs-value

So, it all starts with your offer.

  • What are they going to get each and every month?
  • What is the real-world value of the benefits they’re going to receive each month?
  • What impact will it have in their daily lives?

This goes right to the heart of what you’re offering in your membership site. You have to give more value than what you’re asking them to pay. Furthermore, they need to see and know that what they are getting is worth more to them than what they’re paying each month.

Remember, too, that this value has to be based on real-world benefits, not just what you think the “stuff” you’re giving them is worth. Always remember, you’re not selling a bunch of videos. You’re selling the OUTCOME and the BENEFITS that come with having that outcome. And you price according to that. You also position your pricing around that.

Selling your recurring subscription isn’t really about fancy sales tactics. No tactics are going to outsmart a crappy offer for very long.

How To Enhance Your Offer

If the main way to sell a recurring subscription is to make the value of that subscription worth more than what you’re charging, then how can you do that?

Well, digital memberships like the kind we’re talking about around here could contain a number of things:

  • Training and information. Are you going to be delivering something of high value to them each month?
  • Access. People do place value in having access to an expert to help them. Perhaps you can build in a higher level of access to your program.
  • Clarity and Speed. In many markets, there is a sense of confusion and overwhelm. If you can truthfully tell them that you’re going to provide a life raft and drastically speed up their progress, that’s real value.
  • Done For You. Will your membership contain any kind of “done for you” service? This can be a demanding thing to offer, but it has an insane perceived value. 🙂 In fact, you could probably charge a lot more for your membership if it contained a “done for you” component.
  • Status. Will your members get any cool status among their peers through your program? Bragging rights? A competitive advantage?
  • Software. If you can couple software with your offer, that can really increase the value of your offer.
  • A Sense of Belonging. Will your prospect feel like they’re missing out on the “cool kids club” if they’re not inside your program?

Taking all this into account, you need to design your membership program so that it practically sells itself. Make it clear that the value you’re providing is greater than what you’re asking.

You can also front-load the value by offering them large benefits to signing up. Taking into account all the stuff I said above, you could give them a huge influx of value right from Day 1 as an incentive to join. This front-loading of value puts the value exchange in their favor and helps entice the initial signup.

But, then there comes the flip side of the coin…

How To Reduce Perceived Risk

As I talked about above, all of your prospects are already involved in several monthly subscriptions. Utilities, cell phones, etc. Those things offer us more value than we pay, so we pay it. When that stops, we cancel. Think about how more and more people are canceling their cable bill and that is only because cable TV is beginning to offer less value than what we pay.

The other thing about those services is that our prospects are more familiar with them. I mean, we get how cell phone accounts work. We’re not scared of them. We get how a Netflix subscription works. We know a lot of people have Netflix. We also know we can cancel whenever we want.

So, there is less perceived risk in those things.

When it comes to your online membership, chances are that your prospect isn’t all that familiar with you yet. You’re not a cell phone company. You’re a person who is selling something online. Furthermore, many people out there tend to distrust people who sell online just as a knee-jerk reaction. Sad, but true.

So, how can you reduce risk?

  • Provide a guarantee. Obvious, and pretty much everybody offers some kind of money-back guarantee. But, can you really ramp it up so that your guarantee stands out from the pack and really makes it clear you stand behind the value of your offer?
  • Don’t hide the cancellation option. You shouldn’t hope they forget that they can cancel. In fact, you should be open about it. Tell them they can cancel anytime. Even show them how to do it. By being that upfront about it, they realize that they’re not committing to some long-term thing and that they can back out if they don’t like it.

So, at this point, they will clearly see that you have a valuable offer, something that is worth more to them than you’re asking, AND you’ve made it safe for them by reducing risk.

THIS is how you sell a recurring subscription.

What About Trial Offers?

Some people try to reduce risk by offering trials. Perhaps a one dollar trial or even a free trial.

Generally speaking, I’m not a big fan.

Trial offers usually have a low “stick rate”. It makes perfect sense, too. Trial-takers have very little skin in the game, so they’re not invested in the outcome. You’re literally inviting “tire kickers” into your membership when you offer trials.

That isn’t to say there isn’t a time and place for a trial offer. If you have a truly good offer and your metrics clearly show that you’ve got a solid retention rate and customer satisfaction, then you could offer a trial in certain circumstances.

Personally, I would never offer a trial offer as my public-facing offer. I did it once. I regretted it. I think it harms perceived value drastically and it just throws open the door to tire kickers. Where I would look into using a trial offer would be:

  • As a customer activation technique for people who have been offered other options to join and haven’t taken you up on it.
  • Perhaps as an offer for retargeting traffic.

In other words, the trial should be for people who are already a warm lead and have already turned down other offers. Your offer of a trial would be a very low barrier to entry for them if they’re very risk averse. Once they’re in, wow them with the value and hope they’ll stick around.

Lastly, I wouldn’t offer a free trial. Charge at least a buck for it.

This post is a nice summary of some lessons I’ve learned about memberships – some of them hard-learned.

I’m a HUGE fan of the recurring model. I think it is better for you as the business owner, but it is also better for your customer. It helps give you predictable cash flow, and it actually reduces costs for your customer.

Good for everybody. 🙂

About David Risley
David Risley is the founder of the Blog Marketing Academy, a 20-year veteran blogger and online entrepreneur. His focus? Building a reliable, recurring business around his "lifestyle" and the lives of his students. He has this weird obsession with traveling in his motorhome around the country with his wife and 2 kids. David also likes to talk about himself in the third person. In bios like this one. Read his full story.
  • Rob says:

    Hi David – another REALLY useful article. Thanks!

    I’m planning on introducing a premium membership option to my travel blog (it focuses on a single country).

    I believe a big part of the value offering to my audience will be access to and interacting with a global community of like-minded individuals.

    (I also want to migrate my ‘forum’ from a small but very active Closed Facebook Group)

    My question is around the launch and my MVP from the start. I want to be able to say “Access a global community of fellow travellers” when I launch. However, in order to deliver on this promise I need to have a ready-built community from Day 1.

    How to do that? Here’s my thinking…

    I have around 2K email subscribers and am considering offering a free 6 month trial to at least 500 of the oldest subs. I could also offer a $1 trial to the next 500 oldest subs. That gives me an ‘instant community’ of a possible 1K (or at the very least 500) on launch – which I think gives me my MVP. (Of course, I’ll be building in other member benefits too from launch.)

    I can then market the membership with it’s ‘ready built’ community to the remainder of my email list and generally online.

    One drawback with offering the Free trial option is that I will not capture any billing information that can be used for automatic renewal after the trial period. Of course, I will have that for the 500 $1 trial cohort – so that’s something.

    What I like about giving a free trial to 500 of my most loyal subscribers is that even if I don’t get a single $1 paid trial, I’ll still have a global audience of 500 members from Day 1. (Also as they are the longest standing subs I’d expect them to convert to a paid membership better than newer subscribers.)

    Do you think I ought to ask for a $1 from all the initial 1,000 trial subscribers (and be able to roll over all 1K on a full-price renewal following their 6 month trial) – or split it for the reasons I’ve set out above?

    I’d really appreciate your insight on this David. Thanks!

    • David Risley says:

      Sorry about taking so long to get back to you. Obviously, this was sort of an involved “ask” for the purposes of a blog comment (as I told you via email). Anyway…

      My instinct on this is to go back to the drawing board on your MVP…. that is, unless you already have pretty strong proof that that’s what people would be willing to pay for. I think that any recurring program is going to need to have value beyond the community. There are simply so many options for community these days that PAYING for one just might not be a big enough draw for anybody to whip out their wallet.

      But, aside from that, if you had other stuff in there beyond community, then you could test trial offers on that.

      Realistically, on a list of 2k people, you’re just not going to get 500 people to take a free trial, or 500 to do it for a buck. That would be a 50% response rate on the email, which I fund unlikely.

      If I were in your shoes, I’d probably think a little longer term on this. Build up a real community with your audience, but without the price tag. Just get people engaging. Then, as you get that moving, you can use that asset to really get a feel for the MVP they will truly pay for. I have a feeling people will have something different in mind than just a forum.

      • Rob D says:

        Thanks David.

        I didn’t explain my MVP properly. It isn’t just the community – there’s a whole lot more.

        I’ve decided to join The Lab – so look forward to picking this up with you on the inside!

  • Christoph F says:

    Thank you David, i had to postpone the reading of this article to today. It helps me big time since i’m exactly in this process right now! I think it’s absolutely right to show them actively the cancelation option and to hide NOTHING at all… I asked in the Lab about the guarantee, so i’ve got a double answer now :-)! Thanks again!
    Chris

  • Callie W says:

    Great article David. I disagree re trials though, I think it varies on the type of site as to whether these work or not. One of our clients has a front end free trial (we tested free vs $1) and they have a 75-80% conversion to full members from it, which I think is pretty good and offering the trial first has massively increased the number of sign-ups.

    For our own site we don’t offer a front-end trial but we do offer a $1 7 day trial as part of our sequence as you suggest, plus we use a trial instead of a discount for promos, and have had good results with this. We’ve only been doing this for a month but so far everyone on the trial has stuck with us. We’re only talking small numbers here so I’m sure that will change, but we’ve definitely found it a valuable technique.

    • David Risley says:

      Yep, you have to test it and know your numbers. Definitely a trial CAN work.

  • I’ve thought about setting up a membership option for a site . . . I suffered through enough higher math classes to appreciate exponents, that’s for sure. I hadn’t really considered the free trial of the quandary. Personally, I’d never buy something worth real money unless I’d been allowed to kick the tires, pop the hood, and test the brakes, but I’m certainly guilty of rarely upgrading at the end of a free trial, either.

    I guess if I want to convince people to join an exclusive paid club, I’ll have to keep riffraff like myself out.

    • David Risley says:

      Hehe, that’s one way to put it. 🙂 But, it isn’t about “riffraff”. Its two thing…
      (1) “Tire kickers” have no skin in the game and they don’t have any level of commitment because of that. So, the likelihood of them actually getting any real results is much lower.
      (2) Because of the low commitment, a high percentage of people on trials come and go. No long term value to the community, which actually hurts the value of the community as a whole.

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