How To Start A Membership Website

Are you passionate about a topic? Here’s how to turn it into a membership website and earn ongoing recurring income

Want to sell online content with your own membership site? And earn ongoing recurring income from subscribers? The transition from free to "pay-for-content" is taking the Internet by storm.

What is a Membership Web Site? Essentially, a membership site is when anyone pays to access information you publish in a password protected area on your site. Your subscribers pay to access protected information. You can offer exclusive articles, information, or even a service (like software, games, ebooks, or music).

Selling online content via a password protected website has become big business. Not only is it fast to set up (with the right tools), but the start-up and running costs are minimal. Work from home entrepreneurs and big businesses alike are lapping up this new found revenue source. Companies like the New York Times, Yahoo!, Wall Street Journal, and famous singers, are launching or running membership sites. The little guy can set one up just as easy.

People are willing to pay for online content. In fact, the "Online Publishers Association" revealed that payfor content is emerging as a hot revenue model. Business content, personals/match making, and entertainment are the hottest niches. But even smaller niches, like DVD authoring, sports coaching, marketing services, and dieting are producing massive profits. This gives the every-day-person an easy way to turn their hobby, specialized knowledge, or profession into a paid membership web site.

Fact: US Internet users alone spent over 1.2 billion dollars in 2002 for Online Content!

Online content and how to sell what was once free

The transition from free to for-pay content is real. Consumers want exclusive information. They're hungry for it. They want it now, and they're willing to pay for it. A big seller for online content is ‘convenience.'

Provide what they're looking for all in the one place and you're likely to increase subscription rates dramatically.

Membership Sites rake in $300 Million in 4 Months selling Online Content

U.S. consumer spending for online content in the first 4 months of 2002 was $300 million, a growth of 155% over the first quarter of 2001 (and that's post-September 11th). It's apparent that online users will pay for content on their passion or profession.

Subscribers are paying anywhere from $9.95 a month to $19.95, and in some cases up to $200 a month - depending on the nature of the content. Annual subscription renewals hold a solid 72%, giving site owners an impressive recurring residual income. Renewals accounted for nearly half of paid content sales in 2001.

A Rapidly Growing Market

Less than 9% of online users currently pay for online content. This means the market is wide open for the savvy entrepreneur. Paying for content in 2002 was more than 5 times what it was in 2001. That's a massive 500% growth! A membership business model is more than proving itself in a troubled economy.

Those who capture the market first in their niche will have the obvious advantage. It's an international market, so anyone can play.

Starting and Running a Profitable Membership Site

Ansel Gough, Editor of MembershipSiteAdvisor.com - a website that provides tools, resources and education for people wanting to start and run a membership site, says membership sites are becoming more and more popular and they'll continue to grow.

"We learnt very quickly that people are willing to pay for online content and online services. In fact, they want it! One of the greatest attractions of a membership web site, from the owners point of view, is that it's an ongoing recurring income.

"Research has shown that 70% of people re-subscribe to annual subscriptions," says Gough. "That gives you rock solid cash flow, and a chance to grow each month. Would you like that kind of recurring income?

Many businesses don't get to enjoy that luxury. They move from customer to customer... they are basically unemployed until their next sale. Not so with a subscription site. It's also very low cost to start one, and run one!

"Perhaps one of the main challenges we find is that people want information and services fast. We live in a time when things are getting close to "instant".... meaning, I have a want... I need it and expect it now!

Instant gratification! As an online information publisher, this can sometimes put the pressure on you to keep up with that want. But as you do, it can be fun, educational and financially rewarding," Gough explains.

To make a subscription based membership site successful you need the following steps...

Step 1: Target the right market: Find a 'community' of people, companies, etc., and find out what they're buying! You want a hungry market. Then design a membership site around that. Find a market that is passionate about a subject. There are so many topics to choose from. Doing a key word search will reveal what people are searching for online. You can know before you even launch a membership site if there's a big enough market.

Step 2: Get subscribers: If you've done step one right, you won't find this step such a challenge. We use a combination of viral marketing and joint venture marketing. It's a powerful concept. This way you don't need to worry about search engines, banner ads and the like (not that there's anything wrong with them).

We simply contact someone well known, or even not so well known in our target industry and s up a deal to offer our subscriptions to their customers. We then create ebooks, or find simple software tools online, that can be passed on from prospect to prospect. Information documents (like case studies) can produce good viral marketing/word or mouth advertising.

Step 3: Make it unique: Ideally potential subscribers shouldn't be able to find the same information elsewhere online for free. Your job is to search online (and in some cases offline) for content, and provide it in a convenient manner for your subscribers. Being unique could just mean having exclusive interviews with experts in your field. If you've done the interview, then that's unique. Finding experts (and even famous people) to interview is not hard. In fact, as your site grows in popularity they are likely to contact you. This situation gives you a two-fold advantage. It gives you credibility or an endorsement, and it gives you exclusive content. Of course your exclusive content may be from your own specialized knowledge!

Step 4: Add tools or services: A good module to have is one that combines a variety of information,

services, tools, software, etc. Now you don't have to get complicated. There are a lot of little tools you can find for free online, that can support the main content you're publishing. That's why we include a mix of audio files, articles, and simple tools. Keep things simple. If you're not interested in doing audio files... pick something else. It's that simple.

"Marrying services, resources or tools with content can dramatically boost your subscription rates," Gough says. "However it's best to include something that doesn't take up your time. Giving people a reason to return to your members only area is critical - tools, resources, discussion forums and quality content will do that!

"The exciting thing is, you can take your hobby, specialized knowledge or profession and turn it into a profitable membership site. Your challenge will be finding exclusive content. You can start it part time - something I did myself, while working a full time job. As your subscriptions increase you can plan on full time involvement in your area of interest."

Starting and running a membership site can be a lot of fun and very fulfilling, however you need to know what's involved in setting one up, and then managing it effectively. Planning and allowing for autoresponders, automated sign-ups, credit card processing, automated cancellations, etc is all part of a successful membership website.

As complex as this seems, many companies offer a low cost, easy-to-use software solution. A few companies, like MembershipSiteAdvisor.com offer a free software membership management tool to subscribers, allowing them to manage all of these routine tasks. This makes it possible for almost anyone to start and market a membership site for next to nothing.