The Harsh Truth About Membership Sites Business

Advantages of Membership Sites – Are There Any?

Membership sites offer content available to members only, typically paid. Recently (or not so) they are getting popular because of several reasons:

• Instead of working hard for traffic and monetizing it with ads and affiliate offers you need to sustain a small number of paying members in order to generate decent revenue.
• Instead of asking for one time large sum for an ebook or course you can collect small but ongoing payments from your members.
• Paid content is perceived to be of better quality than free content (although that’s not always the case).
• Even in a paid membership site you can have affiliate offers and your members will be more responsive to them
• Having paid product with recurring payments opens your door for affiliates. Affiliates love recurring payments.
• You don’t need to have finished product (like ebook) to start your membership site. You can start with some content and then build and add to it while your members are in.
• You can get feedback from your members and adapt your content to it.
• You can run a private community which is another reason for the members to stay subscribed.
• Selling a successful membership site is very easy – website buyers on Flippa kill for such a thing.
• You can easily turn top members into content creators (in exchange of free membership) and thus get some of your content created for free.

Is placing your best content behind a door a viable business strategy?

A lot of advantages, eh? Maybe I’m even missing some. Running a membership site seems like a super-lucrative and easy to run business. At least people like Brian Clark who built TeachingSells probably want to you to believe so.

The truth is, running a membership site is a lot of hard work without guaranteed success. If you don’t plan to devote it serious amount of time, work, knowledge, and at least some money, better stick to creating Adsense sites or at best an e-book.

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What Does It Really Take To Create and Run a Membership Site

I’ll try to cover all the steps and give some resources. Don’t think of this as a rebutal why you should not run a membership site – it’s more a guide how to do it right.

1. Marketing research.

If you have ever created a content site you know it takes a lot of research to come up with good keywords and content ideas. Membership sites are slightly different because they can’t rely on much search engine traffic (since all or most of your content is protected). Still keyword research is an option to figure out what people search for and whether they would be willing to pay for information about it.

Then you need to check what content is freely available for the niche and think whether you can create better content.

Finally, don’t forget to think about relevant blogs and sites where you can promote your membership site because if you just create it and wait for people to join, it won’t happen.

Here is a great discussion on Warriorforum about the niche selection process.

Don’t forget there are hundreds of tools and thousands of very experienced marketers researching niches all the time and throwing 5 membership sites for breakfast. Finding untapped niche with potential is nearly impossible, so you’d better focus on niche that has some (not much) competition where you can stand out with good content or quality marketing.

2. Content creation

No, you can’t outsource the content for cheap and you can’t use PLR articles. Sure, there are some BS marketers who do it, but they use a lot of grayhat SEO tactics which are not sustainable. You don’t have their networks of sites, you don’t have their budgets, and I’m sure you don’t have their impudence to sell crap.

You need high quality content and the best way to do it is to be an expert in the niche you are building a membership site for. But it’s very unlikely that you’ll be able to match your existing expertise with the results of your marketing research. Unless you are one of the lucky exceptions, here are your real options:

• Outsource the content creation. Again, you can’t do it with cheap writers from Elance. You need real experts to create it and real experts cost a lot.
• Gain expertise. This is surely one of the options for the poor guy but of course it requires a lot of time and efforts.
• Joint-venture with an expert. This is an option for someone like Brian Clark, but most webmasters who have no proven success track record will have their JV requests ignored. And how do you find these experts at first place? Finding someone form your local friend circle is good option. Finding a stranger on the Internet is not – if you find her, she probably has already successful blog/site/internet presense and won’t be likely to JV with a stranger.
• Turn existing academic/dry content into good, easy to perceive interactive content. This is one of the good options. See how dry are most Wikipedia articles or how dry academic papers are. If you turn such content into nice, understandable, graphical content people may like it and may be willing to pay for it. Of course it requires a lot of work and good understanding of the matter.

Don’t underestimate content creation. Starting a membership site with mediocre content will result in very short customer life span (1 billing cycle), a lot of refunds, and bad PR.

3. Creating the site

You can’t throw some cheap Joomla or WordPress site and expect people will pay for it. First you need software. E.M.M.A. membership site software is a good solution and costs $39. There are also many others, but mostly more expensive scripts.

Then you need decent design. While you may leave your membership site simple (although softwares like E.M.M.A. allow adding themes), you need professional design at least for your sales page. And preferably professional copy. Consider few hundreds for both unless you are good enough to do them yourself.

4. Hosting the site

Unless your site becomes very successful, a shared host or VPS will do the work. Don’t forget the mailing however, if you plan to send newsletters or other automated emails you may get in trouble with your hosting company.

If you are optimistic for your traffic levels you can use some cloud hosting platform as they offer quite a hassle free and easy to setup environments.

Don’t forget you should regularly backup member data and keep it secure. Make sure no credit card info is stored on your server and the members passwords are encrypted. You don’t want important data to get exposed if your site gets hacked, and you don’t want member acounts to get lost.

5. Marketing

This is one of the hardest parts. What do you think, you’ll post your site to Digg, do a couple of tweets and people will start enrolling? Come on, it won’t happen. Marketing a membership site is really hard. There are many methods to do it but most of them require hard work and creativity. I’ll mention only these I believe are most efficient:

• Blog. A successful blog is a great tool for marketing a membership site and offers a very natural logic of upgrading from free general content to premium paid one. You know however that creating a successful blog is a full time job too, don’t you?
• Participating on forums. NOT spamming. You need to establish yourself as an expert on 2-3 niche forums. Depending on their size you can hope for 5 – 50 members to join monthly.
• Affiliate program. Affiliates really love membership sites because of the recurring payments, but recruiting them is also work. One of the cheap ways to start is at Clickbak. You will still need to promote, don’t expect affiliates will find you and choose you just because you are listed there.
• SEO is not a good option for membership sites because it’s hard to rank site with hidden content. One option is to keep some articles and snippets of articles free so search engines can index them and people can land on them and then be invited to join (similar to SEOBook)
• Paid advertising. One of the real advantages of memebrship sites as opposed to free content sites is that you are selling something. Therefore paying for advertising makes more sense as soon as you can be in profit. You can pay for PPC ads like Adwords, but also consider alternatives like posting ads directly on niche blogs and sites, systems like Adbrite, Infolinks, Facebook ads etc.
• Guets posting. If you can’t gain a free link from a site and don’t want to pay for ad you can try to guest-post to gain links. These links are rarely clicked and the effort is not always lucrative, but at least it does not cost money.

Online there are bunch of guides about how to promote a membership site but most of them are BS and make it sound easy when it’s not. I can’t find anything worth linking to.

Disclaimer

I’ve been working on my Smart Investing for Working People membership site for some time, and have put it on hold because I was not happy with the content. I have not given up, but I know there’s a lot of work behind now and the launch.

I have several successful content sites. In my opinion building a free content site is easier. In terms of revenue however membership sites have greater potential. A content site build by 1-2 persons very rare can exceed few hundreds of monthly revenue. While good niche membership sites often make $5 – $10k or more (and I’m not talking about gurus like Aaron Wall at SEOBook).