Make Money Online With The Internet Marketing Stranger. Here you can find some internet marketing strategies and related products that will help you make money online like what I do.
It is almost guaranteed that you have, at some point, signed up for a membership website. Some of the most popular websites on the internet (many boasting millions of users) are membership sites. I’m sure most of you have used or at least heard of the following websites: Youtube, MySpace, Twitter, and Facebook. While MySpace, Facebook, and Twitter are actually social networking sites, they are also membership websites (that is, you sign up for them and use your account to access them).
If you only notice these sites as membership websites, you’ll fail to see the millions of other membership websites. Many of these are actually based around monetary gain. Many internet marketers pick a smaller niche (such as dog training videos) and build a membership website around it. These often lead to extremely profitable sites that earn loads of income. The normal advice here is to pick a niche that you love, that way you’ll love to write about it. This advice is shattered when you see the income and realize that you’ll love writing about any niche that brings with it cash.
There is so much information around the internet about membership websites that it would be pointless to try to contain it in this very spot. There is, however, a free report named Secrets Of The Membership Millionaires that you should check out. It’s absolutely free so there’s no reason not to skim through it. The report talks about membership websites in detail and examines how many newcomers fail to correctly set up their first websites. It also covers how to get started with a membership website and go from scrounging coins from the couch to earning over ten thousand dollars a month.
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In this article, we’re going to discuss “membership marketing”, and how it’s almost a requirement for a successful website. If you’re selling anything online, whether it’s ebooks, digital products or anything of that sort, then the membership system we discuss below can deliver those products in the most effective and profitable way.
Business Success Means Avoiding Churn and Increasing Revenue Per Customer.
To be a business success, you’ll need to avoid is customer churn (or “turnover”). If you get 100 new members, but 99 of them quit after 30 days, it’ll be hard for your business to survive. In a membership context, it’s the period of time someone will keep paying their membership fees. So while it’s vitally important to constantly acquire new customers, it’s just as important to maximize the revenue of each customer you already have. So what we’re talking about is the backend, and the marketing funnel you have in place.
With a subscription membership model – where you have a recurring billing system in place – the backend is the recurring fee itself. The issue becomes keeping people as members of your membership sites.
Let’s see examine how this plays out in the context of three popular business models:
Traditional Product Sales
Let’s first consider the traditional Internet marketing (publishing and sales) model, which is used by most online business owners. In this model, you create a product and a sales page, drive traffic to that page, and hope the traffic converts into sales. The average for that conversion rate is somewhere around 1% to 2%.
Assuming you have a $37 product at a 2% conversion rate, it means that for every hundred people you send to that page you’re going to sell two of those products at $37 ($74 total), and you’ll have a visitor value for each of those 100 people of $0.74.
Recurring Membership
The average conversion rate for a recurring membership site is often less than the traditional one product sale model; it’s generally 1% or less. So let’s now assume now that you’re going to charge $17 per month, rather than the original $37 product price point. But we start to encounter churn with monthly billing. In our experience, the average membership stick rate is between three and five months.
So for every 100 visitors, we’ll get one membership sale, and that customer can be expected to stick around for approximately four months. That means you’re going to generate $68 in revenue from that one signup (four x $17 = $68). That gives you an average visitor value of $0.68. When you use the membership model, you can also put backend offers in place. So once you already have a paid member, you can assume additional backend sales and commissions from that member – around $5 per month.
Now you have that one member, and they’re paid the $17 for the first month – will likely do so for about four months – and they’re also worth an additional $5 per month over that same period of time. So now you have $88 from that signup, and the average visitor value for the 100 visitors is $0.88.
Single-Payment Membership
The next structure is a paid membership with a single payment. Your conversion rate will increase because you’re asking people to make less of a commitment, and a membership generally has a higher perceived value than a simple product sale. You can expect a conversion rate of 2.5% to 3%.
Because there is less commitment, you can charge more still keep the conversion rate up. So let’s assume a one-time fee of $37 instead of that $17 recurring. Now your churn goes way down. The customers have already paid, so very few of them will actually terminate their membership. You’d be safe in calculating an average stay of 12 months.
So the calculation is as follows: You’re going to see a 3% conversion rate, and the total one-time fees are going to be 3 x $37 = $111. Factoring in the backend offers ($5 a month per paid member), and over 12 months you’re looking at $180 in backend sales and commissions, for total revenue of $291. This brings your visitor value up to $2.91.
But there’s an alternative model that blows all three of these out of the water when it comes to down to making money for you – the Freemium model.
The Freemium Model.
The Freemium model is basically a free membership with an upgrade offer. It works like this: you put a “free” offer in place on the front end of the site (in a later article we’ll discuss how to make this free offer not appear to be “free” – and why you’ll want to do so), and you’re likely to see a front end conversion rate around 35%.
If you then place a compelling offer on the backend, you’ll see a conversion rate between 5% to 10% on that offer. It’s often much higher, so let’s use 10% for our analysis.
This means that for every 100 visitors – you’re going to get 35 free members, and then a 10% conversion rate on these 35 members on the backend. So what you end up with on average is 31.5 free members and 3.5 paid members.
On your front end that’s 3.5 x $37 = $129.50. The paid member back-end value is $5 x 12 Months x 3.5 People = $210. The free member back-end value is $1.50 x 12 Months x 31.5 People = $567. Adding these amounts and you have $129.50 + $210 + $567 = $906.50, so your average visitor value is $9.06.
That’s a big difference from the more “traditional” models we discussed above (and more than 10 times higher the most common product sale model)!
Here we’ve opened the doors, we hope, for a lot of people to recognize that this Freemium model is a very profitable model.
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