A lot of people who want to sell information products are thinking of creating a membership site with recurring subscription payments.
In theory this is a great idea.
Who doesn’t want a predictable amount of money coming in from existing customers every month? Sounds like the perfect business model until you understand churn, attrition or drop off rates.
What is that?
Churn or attrition indicates the percentage of people who quit paying you the monthly membership during a given period of time.
Since I’ve ran a successful subscription program in 2014 and 2015 I know that the churn rate for membership sites is very high. In my experience, most people drop off after 3-6 months maximum.
In your mind you might think people will keep paying you forever.
But in reality, people consume some of your content and then things fizzle out, they lose focus, they procrastinate, they don’t use your information, they start something new or they get scared of spending the money. That’s the problem with having a membership site or a club where people pay you an ongoing monthly subscription fee.
It’s just hard to make people stick around, even if you have great content and do a great job at supporting people and helping out.
In my opinion, the best subscription based model is software as a service. If you can create a nice piece of cloud software that solves a real problem for people, they will stick around for a long time.
Think of something like ClickFunnels or Shopify.
I pay monthly fees for these softwares and will continue doing so, because my business relies on them. I’m hooked, I’m looked in and there’s nothing I can do about it other than continuing to pay my monthly fees in order to use these tools my business depends on.
However, information products lack this kind of “hook”.
So in general, I believe it’s better to charge the full price upfront when you’re selling information products or online courses. Forget about the subscription-based membership site and charge the full value.
You can still offer a payment plan where people pay in monthly installments. However, these monthly payments are clearly defined and stop as soon as the outstanding debt for the product has been paid. So it’s fundamentally different than a club or membership.
Give people a great discount if they pay for your product upfront. And then offer a payment plan with affordable monthly payments without the discount. It’s affordable, but people pay a bit more long-term.
This is a proven model most seasoned information marketers use to sell their trainings, programs and courses. And it works really well.
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