Welcome to episode #26 of the SubscribeMe show from SubscribeMe.fm.
I’m your host Ravi Jayagopal. This is the podcast to listen to, if you want to learn about creating digital content, marketing it, selling it, and then delivering it.
I am the co-founder & co-developer of DigitalAccessPass.com, easily the best membership plugin in the industry, fondly known as DAP.
Membership sites aren’t just for subscriptions that charge you month after month for life, until you cancel. That’s just ONE way to create a membership. And membership sites aren’t just for protecting content for ongoing members. There are essentially 9 different ways to add a membership component to your web site, and I’m going to discuss all 9 of them in this multi-part series. And today’s episode is part 1 of this series. So be sure to check out the next couple of episodes as well, for the full story.
Here are 3 (of 9) ways in which you can monetize your content:
Membership model #1. One-time Products with Lifetime Access
Membership model #2. One-time Products with Fixed-term Access, like say 1 month, or 1 year of access, with Renewal
Membership model #3. Recurring Subscriptions with a Fixed-term
So let’s dive right in to Membership Models…
Membership Model #1: One-time Products with Lifetime Access
In this, you create a one-time product where your buyer or member pays you just ONE TIME and gets life-time access to the content. They are never charged again for updates, so make sure you’re not giving away lifetime access to something that needs a lot of updates and support. For e.g., a lot of plugin developers get overambitious or desperate, depending on how you look it, and in order to start getting an immediate flow of sales, they over-commit on things like “Lifetime Updates” or “Lifetime Support” – sometimes, both!
It is incredibly hard to continuously develop software for many months, leave alone many years. And then, if everyone is paying you just once, and you still have to continue updating the software, introducing new features, making bug-fixes and then also support them via email or support tickets for as long as they continue to use your software, and you’re never ever going to get paid EVER again, that’s a really tough proposition. And that’s why you’ll see a lot of software products that haven’t priced themselves correctly, go out of business every single year. WordPress plugin developers for the internet marketing community, are notorious for over-promising, under-delivering, and then just disappearing from the face of the internet.
But if your product is not a software product, and instead, is a digital information product, then it is easy to update your posts or pages or PDF reports over time without much effort. And information products don’t require much support in general – compared to software or services of course.
So this model lends itself very well to “How-to” courses and training programs and reports and tutorials.
It gives your buyers a sense of satisfaction that they don’t have to keep paying for updates, and it also doesn’t create too much overhead for you in terms of updates or support.
But still, buy once and get lifetime access is still a bit scary for a lot of people. Which is where, this second model comes in.
Membership Model #2: One-time Products… BUT with Fixed-term Access and Renewal
In this, you create your one-time product with a fixed-term access – like access for 30 days, or 365 days, anything but NOT lifetime. And then, at the end of this fixed term, access to the content will…
(a) Automatically expire and they have to manually pay a renewal fee to get further access to another extended period of time, or
(b) Access to the content they already purchased never expires, but they don’t get access to future updates unless they renew.
We’ve used this model with selling DAP itself. So you can purchase a 1site or a multi-site license of DAP, and you get 1 year of upgrades and support – the 1 year is the fixed term here. And then at the end of the 1 year, you can still continue using the version of DAP you already downloaded and installed, but you cannot get future upgrades and support, unless you renew for a fee. Now, in the case of DAP, renewal is much less than buying a new copy of DAP. So there’s a built-in discount for renewals. You could do the same thing. Renewal is a fraction of the new product. So depending on how much work it is for you to create new versions of the product, or keep updating this existing product, you could charge anywhere from 33% to 75% of the cost as renewal. That way, they get a discount for renewal, and don’t have to purchase it all over again, and you get a returning customer who is a lot easier to sell to, than finding a brand new customer.
Membership Model #3: Recurring Subscriptions with a Fixed-term
With this, you are actually creating a recurring subscription product – but one that has a fixed-term of recurring payments – like it ends after 3 payments, or ends after 6 payments, or 12 payments. Basically, the payments stop after a set number of payments.
You could also call this a Payment Plan or an Installment Plan.
You could give two pricing options for the same product – the first one is a 1-time payment for lifetime or fixed-term access – for say 97 dollars. And the second option is, you offer a payment-plan for the exact same product in the form of “3 Payments of $37 each”. And because it is a payment plan, you can charge a little bit more in total.
So if they took the one-time option, they would pay $97. Or if they took the payment plan, they pay $37 x 3 = $111 – which is basically 14 dollars more in total – compared to the one-time price of $97.
In fact, you should intentionally make the sum-total of your monthly payments a bit more than the single-payment option, and this can help push your potential buyer towards the single-pay option when you explicitly tell them that “Save $14 when you take our Single-pay option”. Obviously, the more the savings on the single-pay option, the more easily you can make your single-pay option look better.
But sometimes, for big-ticket items – like say a $2000 product, it may actually be beneficial to keep the sum-total of the payment plan close enough to the one-time option. Like in this case, it could be “One payment of $2000, or 3 payments of $697.” The difference between multi-pay and single-pay is $91. The difference is not too little, and they can still consider the one-time option. And it’s not too big, so they don’t pay too big of a penalty for taking the payment plan.
Check out Dan Ariely’s Predictably Irrational, a book about how we all make irrational decisions in a very predictable manner. In the book, he talks about many pricing-related experiments he conducted, with some very interesting conclusions about how people think.
A couple of things to note about this fixed-term continuity program:
a) You can charge the exact same amount each month – on Auto-Charge, or
b) You can charge a different amount the first month – and label it a trial, which is then followed by same amount being charged on the subsequent months – again, all on Auto-charge
So those were 3 of the 9 types of membership models. So what are membership models 4 through 9? You’re going to have to listen to the next episode for that one.
At the top of this post, you’ll see a beautiful online player with a large play button ON THE LEFT, which is key, because otherwise it will look like a banner ad or a header graphic. That’s where, you will be able to play the episode directly from this web site, thanks to my podcast player plugin, called CoolCastPlayer. It is without a doubt the Prettiest Podcast Player on the Planet. It plays podcasts as well as regular MP3 files.
And a super cool feature it has, is the ability to embed that player on a different web site. So this is going to be awesome if you have guests on your podcast, and you can simply send them a piece of code so that they can embed your interview on their web site. So check it out at CoolCastPlayer.com.
Hey, don’t forget to join other SubscribeMe listeners and a network of folks all interested in the same thing: Membership sites and online courses. Join the group by going to subscribeme.fm/group/ and that will take you to my Facebook group.
Thanks again for listening. I’ll talk to you soon.
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– Ravi Jayagopal
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