[Transcript starts at 1:06]
Hello, hello, hello my podcast people and thank you for joining me for yet another episode of my favorite podcast. If you're watching the YouTube video then you see we got good lighting today, it's actually kind of overcast outside and that's like actually the best lighting for my setup. Um, my voice is still doing what it's doing because I'm still sick.
Why am I still sick? Cause I'm actually recording this back to back with the last episode, so it hasn't been days between the other episodes. I was sick in on Monday's episode and I'm still gonna be sick today, Thursday's episode, cause I recorded them on the same day. Uh, but caught this cold, this, whatever this is, it's just literally a cough, uh, from my nephews when I went home for Thanksgiving.
They basically cough into my mouth when I hang out with them. So it is what it is. I dunno if you hear that siren. Sorry about that. Um, we're leaving it in. So we're gonna do what we can with the voice. It, it held out for the last episode and so knock on wood, it will hold out for this. So today we're talking about
whether or not you should start a membership. I have been saying this in the past few episodes. I'm gonna do an episode about it. I'm gonna do an episode about it. Today I'm doing an episode about it. If the question is, should you start a membership, the short answer is no. The long answer is it depends.
And what it depends on, we're gonna go over in this episode. So memberships seemed to gain some popularity over the past few years, and seemingly it was under the guise of passive revenue or passive income. That is inherently problematic if that is the reason that you are starting your membership. Not that I have anything against money.
Please make all the money. But if you're like, I wanna deliver this thing and to have it be passive, but this thing involves other human beings and them, them receiving a service. That's problematic, right? I wanna run this thing. I wanna put no work in. I want them to pay me, and it's, I'm gonna make a million dollars.
That is problematic. The whole kind of, um, structure for this very much speaks of global gyms, where with a global gym, which is like, you know, traditional gym, the whole model there is that they, they hope people don't show up because if everybody showed up that was a member of that gym, they wouldn't have enough equipment to serve all of the people.
So you charge this low rate. You kind of hope that people forget they're even paying it. Oftentimes they don't tell you when they're billing you, it just does it automatically. Uh, I by the way, make sure that I send an email. It goes out automatically before each billing cycle. But you know, these things don't get sent out.
So people don't even realize that suddenly it's been a year, two years, they haven't utilized the gym and they've been getting billed some low amount and the gym is making money. This is not a good model, and we saw this during Covid with a lot of those gyms filing for bankruptcy and closing. It's not a sustainable, sustainable model.
It's not a good model. It's not how you actually provide value for people, right? I think in general, that model is trash. If we're gonna start a membership, we wanna start it because it's, we care and because we're like, this thing needs to exist and I wanna help people. I want to provide value. Of note kind of semantics here:
memberships and subscriptions are different, at least in my humble opinion. To me, memberships implies more of a community potential. So thinking about a gym, which if you do actually go like a CrossFit box, you can meet people, hang out, and actually, you know, have that community, build that community.
CrossFit is probably the best example of this. A subscription gives you ongoing or recurring access to a service. In this case, we're thinking of Netflix. This in reality, this, that word recurring, I should say, is what people, business owners are oftentimes craving. They want the recurring revenue, which is great.
I understand that. But the question again is, should you start a membership? And I'm gonna say, and I typically always say, no, and we'll go into reasons why you shouldn't, and you know, if you are going to the reasons why you should and, and what to to be thinking about and what to look at. For the sake. For the sake of this podcast, I'm speaking quickly.
I'm excited, but I'm intentionally trying to slow myself down. Just as a side note, because we're doing transcripts and it actually has been phenomenal, but it's obviously better if I don't speak like a zillion miles a minute. So, for the sake of this podcast, I will probably use the word continuity instead of membership, because it kind of applies to both and it, it, it, it, uh, explains inherently what this model is, right?
It is continuous. It is a model that you are providing a service and people are receiving the service on a continuous, continual basis. And that in and of itself is why I tell people not to a membership. So I do have a membership. I'm not, when I, you know, I'm not throwing stones from a glass house here. I have a, I don't know if that's the right analogy, but we're going with it, right?
I am walking the walk and talking the talk, and walking the talk, and vice versa, all the things. I have a membership, it is called the Mafia. I've spoken about it before. If you knew, if you're new, here to the podcast, to the video, to the YouTube, welcome. I have a membership, it's called the Mafia. Uh, it is a group of health wellness movement professionals.
We have about 160 folks in it right now. And it is a monthly membership, though you can sign up for a year. With that, from that, in terms of the deliverables, I do two family dinners a month, right? There are Zoom calls. I lead one of them. I bring in a guest speaker to teach, and I pay that guest speaker for the second one.
Uh, we have a bumping Facebook community or Facebook group that's actually the technical name. It's a Facebook group. Uh, I send out a weekly email that summarizes all the things that go on in the, uh, Facebook groups so if people can't get into the Facebook group, cause they're busy, it's cool. They catch up in the email. I also have a blurb at the beginning
that's kind of my thoughts and musings. Um, I also give people discounts on my stuff. So if people sign up for the Mafia for a full year, then they get 50% off of all the things that I create. It excludes Legacy and my monthly coaching. But everything else they get. Uh, and then lastly, as a deliverable, they get community.
Now, I know that in saying that some people may maybe like, community isn't a deliverable. It is, if it is. And we'll go into that at the end of this, uh, at the end of this, um, podcast episode. I started the Mafia in 2020 because it needed to exist. I realized the magic that happens when you get people in the same room, people that are going after the same thing, people that are motivated and inspired and wanna help.
I was traveling the country teaching and I saw if I get everyone in the room, just magic happens. So I said, this thing needs to exist. I built it. I wanted to connect people in, in a single space. I knew it needed to be online cause I couldn't do it in person. I wanted to give people access to all the resources that I had and have them be organized.
I wanted to give people access to the connections that I had, right? I know a lot of people and I've just been really fortunate and people have been really, you know, friendly and helpful and I wanted to give my people access to those people, which is why I bring those guests in for dinner. And I was like, this thing needs to exist.
I built it kind of thinking it would be something for movement and online business. And then Covid hit, right? I started this in January of 2020. Covid hit, you know, five seconds later. And so it's largely skewed towards online business,. But because it's still health and wellness professionals in it, there is still movement.
Um, there's all contents in there, but if people have questions about things, then they can ask those questions. But I started it because I felt it needed to exist. And a lot of the people that joined when I first started it are still in it, and it blows my mind. And my challenge to everyone was stay in for a year.
I thought that that would give them enough time to achieve the outcome of getting started, doing the thing. That was largely the kind of the like tangible goal I had of: if you need resources, if you want to get started and, and take action on whatever project it is or whatever life project it is, if you want a place where you can celebrate yourself and you can celebrate others and people won't cut you down,
if you want a place where you can have discussions and not be scared to ask questions, this is, this is for you. And I challenged people to save for a year. It's almost three years later and people are still in it, and it blows my mind and I'm so grateful. Um, I also do have a moderator, Erica Webb, we call EWebb,
she's the absolute best. Gonna bring her on the podcast at some point. I've actually already asked her and she said not yet. So when she's ready, then we'll bring her on. But, uh, for those wondering the price point, it's $37 a month. I think I might raise that up in the new year. Uh, but right now it started at $27 a month.
It went up to 37 and my whole shick with the price, cause you know, pricing is subjective, it's just a story. Uh, but the whole shick I had with the price was that I wanted people to have access to all these resources at a low cost that wouldn't break the bank. It is leveraged coaching. It is a choose your own adventure model.
And because of the volume I have, I can keep the price low. Uh, I didn't, you know, I, I've had the ability to build all that I've built without paying for some super expensive mastermind or like paying for a zillion dollars for a coach. And I was like, how can I give this to other people? And so that's why I created the Mafia and it's not a million dollars.
Uh, and that's, yeah, that's why. So if you do the math here, right, I've talked about the dinners and the things that I'm, the deliverables, that's 60 plus dinners that I've hosted thus far. All the slides that have to go along with it, the email notifications that go out, which are some automatic and things like that.
But I gotta actually run the calls. I have Lex moderating the calls. I do pay her for that, of course. I gotta answer the questions. I'm in the Facebook group. This is over 150 emails that I've sent. Cause I send weekly emails and you know, showing up and being part of that community, really leading that community, right?
If you do the math, you think about that, these are the deliverables, you see suddenly, it's a lot. It's anything but passive. And I love that about it. But when people are like, I wanna start a membership, I'm gonna have passive revenue, and I'm like, that's that's not, that's not real. It's not science. So the question then is, okay, given that, and these are just soft deliverables, right?
This like, this is what I'm doing. But if you're thinking about doing something like that and you do the math, then suddenly it's like, are you willing to do that for $50 a month? For a hundred bucks, right? Let's say you have a super low price point. People are like, oh, I'll charge $5 and I'll get a thousand people in it.
And I'm like, where are they coming from? And what's gonna keep them in there? Because they're not gonna stay in and you probably won't get those people. So let's say you have a smaller audience and you're like, cool, I'll keep it less and I'm gonna do it for 10 bucks a month. You need a lot of people.
Right. And so you gotta start asking yourself, I get it, money isn't everything, but money does matter. We want this exchange of, this fair exchange of resources. And so are you willing to do all this work for $50 a month, for a hundred dollars a month, for $200 a month? Maybe you are, I don't know. But these are things I want people to think about when they're considering where they're thinking about starting a membership.
It is easy to do simple math. It is much harder to get actual customers, to get people to pay, and then to get them to actually stay. So the two main reasons that I say you should not start a membership: Number one is the volume that's required in order to make it worth it. We, we just did some math there and suddenly you're like, oh, I actually gotta have a good number of people in this.
And it, it is hard to get volume. And then number two, the second reason that I don't recommend people start a membership is the inherent structure of it, a continuity that has no fixed endpoints. That inherently makes it very difficult to sell it to people. And for some, very difficult to keep people in and to sustain the level of work that's required in order to, to keep people in, right?
So if you have a big audience, then this is something that yeah, we can lean towards, you know, more towards yes, it may make sense to have or to start a membership. If you have a really small audience or no audience yet a membership is not the way to go. A continuity is not the way to go as your first product.
So, realistically when folks are like, should I start a membership? I would love to see them have 100 people that they know would sign up for this thing. And that's what I waited for. I knew that I would have a hundred people that would sign up. I wasn't certain of how long I'd be able to, you know, keep it going.
But like from a sheer number perspective, and I was also like, this thing needs to exist. I wasn't doing this to make a zillion dollars. I wasn't doing this as my main revenue source. This was just something that I said this needs to exist. And I also had a very good size audience. And I knew based on the market research I was doing before and I was putting things out there and I love to sell via, um, wait lists and things like that, and email marketing.
I knew what I could get a hundred people on this. I, we actually started off with like, 225, right? So we, we had more than that and I was like, okay, financially, absolutely. I'm invested in this thing and it's quote unquote worth it. The second part of that volume, so if some of you are maybe like, well, I would just charge more and I need less people, that's fine.
But a big part of a membership, like I said earlier, is that potential for community. And it's really difficult to have community when you have three people. When you have five people. When you have 10, 20 people, you can do it, but over the long term it becomes difficult. So you can create a sense of community within a small group, especially if you're staying together for the whole, you know, long period of time.
So if you have a group program, something like that running, for sure, because that also has like a specific outcome. When you have something more nebulous like a membership and it's like goes on forever, people are not as inclined to show up for every single dinner, every single meeting, every single call. And suddenly it becomes very difficult to generate and formulate and create that feeling, that sense of community because people aren't always there, right?
So if you have more people, then you have, you know, essentially more to choose from where like they can't make it on these days, that's okay, cuz other people are showing up on those days and it's just easier to build that sense of community. So the two reasons, like I said, that I don't love people starting memberships is one, the volume that is required in order to sustain it and make it worthwhile.
That's typically gonna be, I would say, if you have a hundred people that you know will sign up. Cool. And again, a hundred people on wait list doesn't mean a hundred people are gonna sign up. Uh, we're looking at 10 to 15% conversion rates on this. But you can absolutely do it with less, but to make things easier on yourself and to really allow for that group dynamic to form, a hundred people is a really nice number.
The second reason I don't like it, I don't like people having memberships, is the inherent, incessant nature. It makes it difficult to sell because there's no fixed end date of it. It's like, Hey, join this thing it just goes on and on forever, like that, John Jacob Jingleheimer Schmidt song. You're welcome.
Now it's in your head, right? It just goes on and on, and so people are like, I don't know if I wanna buy this thing. Right? Folks want solutions to their problems. Businesses are built on solutions to problems. If this doesn't have a specific endpoint for a solution, a specific outcome, like with a timeframe, it's tough to sell, right?
Think about it. If you go to PT and you're like, Hey, I have back pain. Can you help me? And they're like sure, just come forever. And you'd be like, wait, what? What? I don't, I don't know if I want that. Even if you know that they're gonna need to work on things forever, if they're gonna be in pain forever, if you can't give 'em like a, you know, bit of a, a timeline for this and future pace to them, people are not so likely to buy.
The, the next part with this is thinking about it in terms of that subscription model. So in terms of reasons that I don't want people to start the membership. So we had it as the community part and, and that's important, but with this, if we're thinking about it as a subscription and that that is access to a service, even with that,
we're not so apt to sign up for the subscription side of things. If it's a, if it's Netflix, yes. If it's a subscription for like a spa, you're still like, ah, I'd like a fixed outcome. I'd like a fixed date. I don't know if I'm gonna use all of those. I don't know if it really actually makes sense. So maybe packages make sense, but we see how it can become difficult to actually sell these things and acquire those customers, right?
That math was easy before, I'm gonna get a hundred people, I'm gonna get 200 people, they're gonna pay $5. It's be a thousand dollars a month in passive revenue. And suddenly you're like, where are the people coming from? How are you actually selling them on this thing? How are they gonna see the value in this thing?
Right? The inherent structure makes acquisition difficult. It can make retention difficult, and it can make your, your ability to actually deliver difficult cause you have to keep showing up. And the question is are, do you have it, do you have what it takes to keep showing up? And you know, maybe that question made you feel some kind of way, and this is not, I'm not saying it to put you down, but like it takes a lot of work, which is why having that revenue coming in can be a motivator to keep you going and keep you actually doing this.
If you're actually going to start it, you know, you're like, screw you, Maestro, I'm gonna start one. Okay. Again, do what you wanna do, but there's a few things that I want you to consider. Uh, a few things I want you to to think about with this. Number one is that volume. Try to have at least a hundred people that you know would sign up.
Again, you can absolutely do it with less, but if we're looking at the revenue side of things, that's a really nice amount of money. Um, even if you're charging a lower amount there and it allows you to really foster that sense of community. Number two, focus on a specific outcome for this membership that you want to achieve, right?
People need to understand what they're gonna get by joining, and I don't mean what deliverables they're gonna get. How many Zoom calls? What transformation do they get by joining this thing? The deliverables are up to you, the specific deliverables, how many calls, things like that. That's up to you. But remember, more is not better.
Better is better. Bring the value and it's easier to bring the value when you have a set outcome for this thing. I know that that model got popular of like, well, I'll just give them access to videos. That's cool. But what actually keeps them in? At some point they may stop, they may not. Right? So I'm part of Gil Hedley's like little membership continuity thing.
Uh, and I pay, I think it's $15 a month, but he's always adding new videos to it. And they send out emails about the new videos and you can join the things live. So it's not just like this video library that exists. And we have no contact with him cuz he does live calls and you can ask questions and things like that.
So just consider that. I had said earlier about community being a deliverable, and I know some folks in the space feel some kind of way about saying that, and they're like, community isn't a deliverable. But I think it can be if it actually is. And I talked about that with the Mafia because it is absolutely probably the, the big, the not even probably,
it is absolutely the best part about the Mafia. It's the people inside of it. Uh, I'm gonna borrow a quote or a definition from a friend of mine. In terms of community. Community, I'm reading it off the screen right now. Community is a group of people you learn from, not a group of people that you just learn with, right?
A group of people that you learn from. And so you then, as the membership leader, need to figure out a way to actually facilitate that, which means you have to be in that membership, in that group, providing opportunities for people to actually share so that they can provide value, right? People want to
feel valued for sure, but they also want to provide value and you can't do that with that super passive thing that you're ever, you know, that you're never actually involved in or involved with, and you're never actually doing anything with. Tying into this objective outcome of what they're gonna, you know, get, receive, do, the transformation, uh, by joining this,
think about how long it takes to achieve that outcome, and then challenge people to stay in for that long cause. If the ch, if it only takes like six weeks or a week to achieve the outcome, then make a, make a program. Don't make a membership about this thing. Right. So this will also allow you to predict churn.
And churn is just like the people that are leaving. If people come in and they're only staying for like two, three months, that's really tough. You have to keep getting new people in. I want people staying in for a year. I want people staying in for longer, right? So this is where we kind of gotta think about what's the outcome.
We want them to actually get an outcome. And then maybe that outcome changes and now it's maintaining or maintenance of, of something. That's gonna be up to you and what you're doing. But I think perhaps now the wheels are starting to turn and you're understanding what you actually have to go in to this thinking about if you actually want it to be sustainable and viable.
Next part, lead from the front. You have to be in that group, in that community, leading by example, showing up, supporting people. This is what's also gonna allow you to actually build the community so you know what value people can provide and you can link people up or you can ask people to speak or you know, you can highlight them.
But you only know that if you're actually inside of the membership doing the things. Next point, prevent self-promotion and encourage people to give more than they take. This starts with you as well. So from a structure perspective, I have a a Sell Yo' Shit Saturdays. And so when people wanna promote their services, they have to do it on Saturday and they do it as part of a post that Erica puts up every week.
So they can't just be like doing it whenever. I actually also don't sell in my membership, so I'm leading from the front here. Give more than you take. I didn't create this so that I could sell. I created it so that people could be connected to each other. Will I put things up there on the Sell Yo' shit Saturdays? If there's something that's relevant, I'm like, Hey, don't forget that you have a discount.
Cause people always forget. Yeah, but the goal of this membership is not to sell 'em on more things. The goal is to provide value and provide service and provide a resource for people. So this is not to say that you shouldn't or anything like that, just letting you know how I do it and how I think is the best way to prevent this from becoming just like a self-promotion Facebook group, where no one actually wants to be in it, right?
Lead from the front and encourage people to give more than they take. Next part here to consider if you wanna start a membership: understand that if you're also gonna sell other products or services, the membership will likely grow very slowly. A example of the opposite of this is Paragon. So that's LCK, Laurie Christine King.
I've had her on the podcast and she's a good friend of mine. She runs a, it's technically a membership. It is a subscription, is what it really is, uh, for coaching, for, um, programming, right, for fitness, uh, hypertrophy specifically programming. Now with this, that's the only thing that she sells. And that group is huge.
I think they have like, I don't know, 1500, 2000. I really don't know. Some really high number of customers and clients. I don't know what their churn rate and how long people stay involved with it is, but she's a great example of that's the only thing that she sells, so she's able to market it, and talk about it and you know, demonstrate the value of it all the time.
If you have other things going on, and like for me, I have my Intensive, I do one off coaching sessions, my Maestro Meetings, I run Legacy with Jill. There's only but so much time in a year that you can actually market things. And so typically that membership isn't going to grow as much, which is okay if you have really good retention.
Right. People stay in it and it's okay that it grows slowly, as long as it's not going down. That's, that's great. Okay. One thing I've spoken about in past episodes and, uh, my girl Stacey had brought up is consider capping it. Right? If you don't have other products, and this isn't supposed to be a cash cow, go ahead and put a, a number on it of like, okay, we have a hundred people and that's it.
And when someone leaves then someone new can come in. Uh, you know, create some exclusivity there, remove some of that urgency from yourself, and just like, let this thing be, cause especially we said earlier, like, why are you starting this? If you're starting it because you're like, I just need it to exist, then cool,
you don't need a zillion people in it. And, and then lastly, the price point. That's gonna be up to you. It can be higher, it can be lower. Go ahead and look around, see what the market is holding if you want. Um, or just pick whatever you want. Whatever feels good, allows you to actually get started. I'm a big fan,
I spoke, spoke about this in the previous episode I did, um, about pricing, pricing strategies for online business. If you could link that, Courtney and Joe, thank you – uh, but I spoke about this in terms of looking at the market, but also I like to grandfather people in for online things, for my online membership because the, the price of running it really hasn't gotten up.
So if I'm going to raise the prices, I can do that, but I will probably keep the price the same, not probably, I will definitely keep the price the same for everyone that was been in it. New people, higher price, or people leave and come back, higher price. But everyone from before I keep them in at the same price. So that, that can be something to think about
if you're gonna start it and maybe don't make it, you know, one penny, cuz you're like, well am I gonna keep 'em at one penny forever. Like, yes, you can change the price. It is okay. Um, but it's nicer in my opinion if you don't. So, things to think about. So from the technical side, you've got lots of options of how you wanna actually do this thing.
Long story short, you just need a place where everyone can get together and then you need a way to get paid. I love using Memberpress cuz it automates certain things. And if you wanna go between tiers, you can do that. And the recurring payment is important. The ability, ability to recurring, I was about to say recurringly.
That's not right. The ability to, to the ability to get paid on a recurring basis or the ability to charge on a recurring basis and have that automated is huge. So you want to use technology for that. Again, I use MemberPress. That is a plugin for WordPress, which is what my website runs on. Kajabi has something, Circle has something. I've heard
Patreon is actually not that good cuz they're taking a lot of your money. Was actually just talking to a client about that yesterday. So maybe not Patreon. Uh, but there are other things that you can be using. Google it, check it out, see what your specific needs are. Ask around. I'm happy to talk about it as well. And then you can pick from there.
So I'm gonna wrap this up cuz my voice is going and also I don't have much more to say about this, but the reason that I'm so adamant about this when people talk about memberships is cuz I don't want my clients and people I care about, you folks, to start something that you're inevitably gonna stop very quickly cuz it's just not gonna work out.
The flip side is you're all adults and you know, run your business however you want. So if you're like, screw you, Maestro, I'm doing it. Awesome. I'm just here to give my opinion when I'm asked. And I am oftentimes asked about memberships. Cause like I said earlier, they just like really became in vogue over the past few years and people kind of starting, trying to start them
to make passive revenue or earn passive revenue, and I was like, I don't think that's the way. Right. So good segue there, in summary, what I've been talking about this whole time, the main reason that I think people wanna start one is for that passive revenue. They wanna make a lot of money. Realistically, it's not passive, it's anything but passive.
And the second part, you might not make a lot of money cuz you need the volume for it. The two main reasons that I don't like people starting them or I don't encourage people to start a membership, number one, is because the volume that is required. So if you have the volume to sustain it, okay, cool. This may be a thing to really look into, if you don't have the volume yet, then let's go and get the eyes and build that up and then we can start thinking about this.
The second reason that I don't like people starting memberships is the inherent structure of it, the inherent incessant nature. That incessant never ending, continuous nature, means, number one, it can be difficult to acquire customers cuz they're like, well, wait, when does it end? Like, how do I, I want the outcome.
It can make it difficult to keep people, and it can make it difficult to actually deliver the product, the service, so that people wanna stay and they wanna go tell other people about it. In my humble opinion the best reason to start a membership is because it needs to exist. You're like, I see a problem out there.
Oftentimes, it's a, a meeting place, a way for people to get together, a way for people to be supported and support each other and provide support. I think I was redundant there, but that we're gonna go with it. If that's the case, then go ahead and start this thing. Rewind the episode and go think about, you know, the, I dunno, seven, six, or seven points that I, that I laid out of things to think about if you're going to start, because they can absolutely be phenomenal.
My Mafia is amazing. If you wanna check out more about the Mafia, learn more about the Mafia, you gotta hit me up and I'll send you the special page. Uh, cuz I am super protective so it's not just out there for anybody to check out. Um, but if you want to check out more, you can shoot me a DM at @themovementmaestro,
you can shoot me a text 3 1 0 7 3 7 2 3 4 5. Happy to send you the special page so you can read up more. Um, but yeah, memberships can be incredible. They can truly become a family, but you can't be just in it for the money and thinking it's gonna be the super passive thing. So if you're in it, you wanna really have one, you really wanna do it, more power to you.
If you're wondering what my opinion is on it and why all the time you hear me saying, don't start one, don't start one, don't start one, well, I just gave you 20 plus minutes of my two pennies. All right, the voice is going so we're gonna wrap it up here. As always, endlessly appreciative for every single one of you. I think I'm gonna have a call to action this time, which is, if you like this, share it with somebody who's been asking about memberships because yeah, let's get the word out there and, uh, maybe save my voice from having to explain
again. Super grateful for each and every one of you, and I will catch you on the next episode. Until next time, friends Maestro out.
MOTM #425: Practical Pricing Strategies for Online Business
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