entrepreneurship

Why Your Business Should Have A Membership Program

I don’t think there is anyone in the world that wants to do the same thing forever. I’m sure that at some point, Beyonce is going to stop dropping records and stop going on tour. 

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Think about it. If you look at everything you’re doing as of today, do you see yourself doing that in 5 years? 10 years? 15 years? The whole concept of working until retirement is insane because who said that I wanted to do this for 20+ years. I barely want to do it for 2 lol 

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With that said, what would you say if I told you there was a way to make money in your business by putting it on autopilot? 

You’d probably tell me to exit stage left but hear me out. I want to introduce you to the idea of implementing a membership program in your business. For the sake of this blog, we’ll define membership as a recurring fee (usually monthly) someone pays to access a particular service/product. And note, I will be using membership and subscription synonymously throughout this post. 

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Membership programs allow business owners to better predict or project their revenue. If you have a membership where you charge people $5/month to access your offer and you have a goal of grossing $1,000/month from that membership, then you know you need to have at least 200 subscribers per month to hit that target. This business model requires less labor than having to continually attract and convert new customers because the focus is on how to retain current customers. 

According to McKinsey & Company, 15% of Americans have signed up for one or more subscriptions to receive products on a recurring basis. It is projected that the subscription eCommerce market is expected to reach $473 billion by 2025. Yes, you read that correctly – $473 billion. That is a 2,389.47% increase from 2019’s $15 billion revenue. The biggest consumer benefit of enrolling in membership is convenience.

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That monthly gym membership you pay for so you can get access to top-tier athletic equipment to reach your body goals, you do that because it’s convenient. You do not have to build your own home gym by purchasing expensive equipment. That Amazon Prime subscription you pay for to ensure you get your deliveries in 1-2 days and occasionally, even on the same day, you do that because it’s convenient. You can order a dress on Wednesday and get it by Friday for that wedding you’re attending Saturday without leaving your house or having to deal with traffic and long lines at the register. The point is, we will pay for convenience. So ask yourself, what do you (or can you) offer your customers that would make them interested in paying a recurring fee for convenience? 

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I was working with a client that was launching a body sculpting business. Her business model requires her clients to see her often to ensure quality results. As we’re discussing her pricelist, I suggested she implement a “sample platter” membership where she meshes in different services that allow people to get a small sample of the services she offers. These clients are not able to come in often but they are willing to come in and get the experience, so they opt-in for a monthly “self-care” day.  

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I was working with a fashion designer that was looking for ways to bring in more passive income in her industry. I suggested she start a “lookbook” subscription where she curates different looks every month or season based on trends and her expertise. She would promote it to fashion enthusiasts, especially content creators because they will be the ones to take her subscription ideas and bring them to life. When others inquire about how they came up with those looks, they would reference her subscription which would increase enrollment.

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I share those two examples to show you that no matter what industry you are in, you can start a membership program. The beauty of this process is that it does not have to be perfect to start. Look at how many times Netflix has changed up its subscription model. When it started, you were only allowed to get a limited number of physical DVDs per month and now, we have streaming access to over 17,000+ titles at our fingertips. Learn as you grow.

I’ll be doing another write-up to specifically highlight all the benefits of implementing a membership but in the meantime, if you need assistance with developing a quality membership offer, let’s set up a time for me to brainstorm with you

Until Next Time,

LOLATHEMANAGER

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