Transcript

0:01

A lot of you who are community oriented naturally start to think, maybe I should create a membership program like I am part of membership programs, and some membership programs are Simplero groups. They charge more, maybe even several several $100 a month. And then other memberships, I'm part of our $10 a month, $20 a month or something like that, and they probably have a lot more members. And of course, you most of you listening to this are are very, very polite people. And very, you know, nice, very nice people.

0:37

So you're like, oh, I don't wanna charge too much if I do a membership, oh, maybe a $15 a month membership. Right? Because that's That's that's a polite price. It's easy it's easy for people to say yes to it. I don't wanna take too much money from people.

0:49

And by the way, I have to say, that is a a noble impulse. I actually really do believe that that the less money we can take from others to sustain a beautiful life for ourselves, the better, generally speaking. And yet, Having said that, I I wanna caution you against this natural impulse of charging less for a membership. Because you you you justify it to yourself. Well, I'm you know, I I pay my national public radio, you know, $50 a year or $10 a year.

1:24

And look, they're they're doing fine. Yes. They have millions of listeners. Okay? Right?

1:30

And so with with No. Not millions. Tens of 1,000,000 of listeners. And when tens of 1,000,000 of listeners in the 0.1% conversion rate, you know, or, oh, look at Wikipedia. I I I paid them $20 a month, and I feel really good about that.

1:44

Yes. They have 100 of millions of, you know, readers, probably billions actually, to be honest, low low billions. And with a 0.001% conversion rate, they do quite well. Thank you very much. Now, you might say, well, I I feel confident I could get 50 members.

2:02

I mean, this is actually not not not easy. Right? To even get 50. Like, it's it's not it's not easy to get even get one person to say yes to you. Right?

2:12

Let alone 50. But but some people have a 10,000 person social media audience. And they say, well, with 10,000 people, I'm gonna be real conservative and say I can get 50. That's half a percent. Now, 1% would be a 100 of of, you know, 10,500 percent would be 50.

2:32

So that's really reasonable to expect 50 of half a percent very polite conversion rate for 10,000 members. For 10,000 escribers or 10,000 social media followers. Okay. Fine. Fifty people.

2:44

And you say you wanna charge $15 a month. Is that oh, that's a polite price. $15 a month. So let's do the do the math here 50.50 times. So you're you're earning $750 a month or pounds a month or whatever your currency is.

2:57

And here's the thing. You probably can't live on £750 or or or dollars per month. And so you're gonna have to provide additional offerings to sustain your business. Right? Because you probably need to earn closer to 3000 or $5000 slash pounds a month to sustain your your lifestyle.

3:19

And if if adjusting just adjusting the membership price, let's run the numbers real quick. Take it for 15 to a $100 per member per month. If you can recruit 50, again, that's a very reasonable, very conservative conversion rate. Half a percent. Let's say you got 10,000 members.

3:41

You're converting half a percent. 50 members. That would be 5000. Am I doing the math? Right?

3:46

A $100 a month times 50. Right? That's $5000 or pounds a month. Versus 750. This is a huge it's you guys say, well, George, that's a huge difference in pricing.

3:59

Not really. Someone who was willing to pay you 15 can honestly probably pay you a 100 and not may not have not not have it really impact their life. And yet impacts in your life a whole lot, right, when fifty people decide to pay a 100 instead of 15. Now it's not going to be as easy of course to get 50 to pay a 100 versus 15, but honestly it's not that much harder. It's not that much harder.

4:27

It's actually harder for you to say, well, now I have $750 a month because I charge them $15 a month, fifty members. Now to try to make another 4250 a month, right, to make up to the 5000 a month. To make another 4,250 That's much harder. Okay? Because now you gotta launch this and launch this and launch this and maintain this program and that program and how many programs you have to maintain for $5000 a month.

4:52

Versus you could have gotten one program, charging members a $100 a month. And of course, given that you're earning 5000 a month from one membership program, you have a lot more freedom and time and energy and motivation to give those 50 members way more than the $100 a month in value in value. And and that's that's what I wanna move on to next. The value that you're able to give to each member is way more than a 100. Now especially if it's only 50 members, Now, if you're talking about 500 members, the value you can give to each member goes down a lot more because you can't So you can't even answer if if you had 500 members, a q and a call would be probably at least fifty fifty people on a q and a call.

5:43

I mean, right now, I I wanna I'm speaking right now on a q and a call to 8 other people. Right? This is being recorded live. To 8 other people, of a membership that I have, that's 80 members. Yeah.

5:56

I have a membership program where people pay a 100 to 2 200 and 20 a 100 to 220 a month. Okay? Minimum is 111 a month. Maximum is 122 a month. 80 members are paying that right now, and and yet having 10% attendance rate is normal.

6:19

Normal. So I'm able to give a lot of value to 80 members because most of them don't attend every call, and none of them have ever attended every single call. Different makeup of different people attend each call. And even the people who do not attend the call, they feel like they're getting a lot of value because they can email me or they can message me and I actually reply to them. Right?

6:42

I'm able to sustain the value giving to 80 members, okay, of $200 a month even. And so can you with 50 members. You're able to sustain $205100. Okay. I know that about $500 of value for 50 members.

6:59

But I'm confident you can sustain $300 of value per month to 50 members. If you actually wanted to charge 300, you could and they would be happy. But you're being very polite right now, and I wouldn't invite you to charge a $100 a month because fifty members a $100 a month Now you can really pour your heart and soul into that program, whereas for $15 a month, you're earning 750. You're confident at getting 50 members. Good.

7:26

Now if you stretch your marketing, you could probably get 75 members, but not much more beyond that. If you're confident at 50, you could probably get 75. If you really do hardcore marketing over the years, you could probably sustain about a 100 members you know, with retention problems over the years because the launch, you always get more members in the launch, and then they start canceling after 1, 2, 3, 4, 5, 6, 7 months, they start canceling. So you think 50, it's not gonna be static like that. It's you know, after at month 2, it's gonna be 45.

8:03

At month 3, it's gonna be 38. Right? And the the and it's normal. Now, if you're lucky, maybe not the that kind of attrition issue. But then, of course, you're gonna keep launching.

8:12

You're gonna keep growing the membership, and you're gonna keep making it up for it. But it's not gonna be like starting at 50, and then 12 is 60, month 3, it's gonna be 90, month 4. It doesn't work like that because of natural attrition. And so and the other problem, of course, is when attrition comes customer service issues, you don't even realize one of the biggest headaches, not headaches, but it's an ongoing annoyance with membership programs. It's people canceling you having to off board people.

8:41

Okay. I'm so grateful that with ABC Mastercard, very little attrition because I, people commit to a year, and they they apply for the program, they commit to a year, and they are very conscious of of that that they're getting one of the few spots. Right? Because there's always waiting list. So it's like, with that, it's got my soul gym program, That's more of a headache.

8:59

My soldier in Birmingham has no commitment. They could just it's ongoing, and they they can quit anytime, and it's an ongoing annoyance as people quit. Because it's like, oh, and now I have to offboard them. I onboarded them, and now I have to offpipe it, remove them from this area, and then move them in that area. I have to make sure they don't get access to that anymore.

9:16

I have to I have to make sure I'd let the team member know that's it's like it's like it's like I'm like, is it really worth it? I keep scratching my head. It's like, I and guess what? It's an ongoing annoyance for $75 a month. I'm not even charging 15 a month.

9:30

I'm charging 75 a month, and I'm getting annoyed by having to run this program. Right? And so it's like, yeah, I just I just I'm I'm I'm I'm hopefully giving you some guidance based on 14 years of running different groups that's like, okay, over time, I've noticed these kinds of things. And I just think again, now, I know if you still wanna go forward with that $15 a month membership, just understand that there's gonna be a constant annoyance of attrition. And you have to off you have so in other words, you have to make it so the the he has to make it he has to be so simple to onboard and off board, that it's not even like, hopefully, you don't have to do anything manual to either onboard or off board them.

10:17

$15 a month should really be Like, you don't even notice. Like, honestly, okay. To just be really frank with you, you know, looking eye to eye with you here. You shouldn't even notice when someone signs up or offboards. Like, by $15 a month, it really should be like that.

10:33

There should be 0 maintenance where you're just showing up every month. Teaching your thing, uploading your recordings, and you don't even care whether there's ten people or a thousand people. Now once it gets to a thousand people, then you care. Right? Once it gets to 500 people, then you care because 500 times 15 is what?

10:50

75 75100, something like that. Right? Then you're like, oh, but you still cannot care for any individual member at that rate. At $50 a month, you can barely care like I said, at $75 a month, I can barely care for any individual person because listen. Most of you are bending over backwards too much for any member.

11:15

It's like it's not sustainable. Listen, I'm I'm 14 years in business, and I can tell you, I think about sustainable business all the time, and I think about energy management all the time. And to have something that you sustain year after year after year, even if $75, I cannot care for any one member. I just can't. Now, they can come to q and a calls and the the $75, you know, the there's there's only 80, 90 people who could possibly come to q and a call, and therefore, Only seven people, like I said, eight people come even with a soldier in program.

11:47

Maybe eight people show up to a monthly q and a call. And therefore, I can care for those people. And people ask questions in the form, they tag me, I can respond. That's sustainable. It's okay.

11:58

But starting at a $100 a month, and I'm talking 2023, you know, dollar rates. If you're listening to this in 2038, it's gonna be starting a $1000 a month, then you could start sharing for any meeting. Due to inflation. Right? But it's like right now 2023 numbers, all of us living in in the in the 1st world countries.

12:17

I mean, if you're living in somewhere like Mexico. Whoops. Okay. I just moved to Mexico. So my my my expenses are gonna start decreasing in the next few years.

12:26

I'll start to see the numbers. I'm like, okay. Now I can charge less. Right? I'm still I'm still not sure yet.

12:31

Right? But but if you live in England, North America Australia, Singapore, or any of the 1st world countries, most of Western Europe at a $100 a month per per member You can barely care for any one person. You can barely spend 15 minute okay. You can barely you can't even spend half an hour, maybe half an hour per person, per member. But that's a $100 a month.

12:56

You see what I mean? Run the numbers and realize, oh my gosh. I I when people pay you a 150 a month, and up. Now you have a bit more breathing room to say, now I can actually think about each person, each month. For 5 minutes or for half an hour or maybe an hour.

13:15

A $150 a month per member, I can think of I can think of that person for an hour a month. I think that's reasonable. But not below that. You see, below that, you start to go, okay, a $100 a month. I can think about them for half an hour per month.

13:27

Okay. It's sustainable. If at $50 a month, I can think about them for 5 minutes a month, including onboarding, offboarding attrition, you know, administrative for a for anyone member. At $15 a month, I cannot think of anyone member at all. That's sustainable.

13:43

So with that, that's like I said, you know, with national public radio, with Wikipedia, Of course, they don't think of any of us. We're we're just numbers to them, but that's appropriate. That's appropriate use of energy. Right? So I hope this is helpful, and and thank you so much for for asking the question.

13:59

And I wanna add something, and I wanna thank Mark Verticaledge. For for for bringing up this additional point. In certain industries, so it's like market does indoor gardening. Right? Meaning, like, growing microgreens and things like that.

14:16

It's more of a hobby. It's not something it's more more, I guess, quote, unquote, luxury for them to learn how to do it. They can learn on YouTube. But then again, in my industry, there's tons on YouTube too. I mean, So so just saying that there's lots of free content elsewhere is not it's not it's not correct because in any industry, there's lots of free content.

14:35

In my industry, there's tons of free content. You you never have to take any courses for me because there's there's for the rest of your life, you can learn even detailed things on on on on YouTube and googling and all. Anyway, But but it's true. There are certain industries where it's like, well, it's more of a luxury. So therefore, membership is only appropriate If you say, well, they're not gonna pay a $100 a month for membership because I've already tried, and I've asked them or whatever.

14:59

And I've asked them what where they spend their money in terms of learning of this stuff, and they they don't They're not gonna spend a $100 a month. Okay. Then I say this. Then I say this. Then, therefore, it's not appropriate for you to launch a low cost membership yet.

15:13

Not until you get to a 100,000 followers. You got a 100,000 followers at half a percent conversion, which is that, you know, reasonable for an ongoing membership. The other the other part I have to say really important is this, people really resist an ongoing membership. Because they don't want the feeling of I'm paying for this until when. I don't wanna see an ongoing really, it's like only the most necessary things.

15:38

You know, like Netflix. Do we can can we bear to pay for something ongoing at $10.20 a month? Electricity, I can pay for ongoing, but but everything else I need to know it's a 3 month, 6 month, 1 year membership. I need to know ChatGPT it really decreases sales by 80% when you say it's ongoing. Now, again, that's not a study.

16:01

That's not a research number. But but from what I've noticed, there's a traumatic resistance towards ongoing memberships. So therefore, that's what I say. 0.5%, half a percent is reasonable. To to expect your audience to convert to an ongoing membership because it's really hard to sell 1.

16:17

Okay? So at half a percent, at a hundred thousand people, 100,000 followers. Half a percent is 500. 500 charging $15 a month. There you go.

16:28

Congratulations. You have a true livelihood now. But at 10,000 members, low cost membership is not appropriate use of your energy. In my if I were your If I were your coach, that's what I would say. If I were a business manager, I'd say, please, let's stop this madness.

16:42

We cannot do this. So therefore, you know what you know what people do? And in luxury type hobby type situations, they sell single courses. You know they all do this. Whether it's astrology or whether it's gardening or whether it's how to dress up your dog.

17:00

These are all luxury things, but learn how to dress up my dog. I don't wanna pay an ongoing membership for that. Sure. I could dress in my dog many different ways. But if you give me a $150 course, I'll address my dog in a 150 ways or find 25 ways.

17:17

Right? I'll say, hey. Listen. I pay all kinds of stuff for my dog. I pay all kinds of stuff in my microgreens kit.

17:24

My my Wi Fi's does microgreens. So I know what we're talking about here just a little bit. It's like, really, you're you're paying for that. Okay? She'd pay 150 bucks for a course.

17:33

And guess what? You've just sold her a 10 month membership. You see what I mean? A $150 is ten times $15 a month. It's so much easier to sell a $150 course than it is to sell a $50 membership even for 10 months because the attrition rate.

17:48

So, no, self courses at a 100 to $300, people who do hobbies will happily pay up to $300, probably sometimes even more. For single courses because it's not an ongoing payment that they can't justify to their spouse or to themselves. Okay? But they can justify to say, you know, listen. Sweet.

18:09

It's a 150 bucks. Come on. This is something that I really enjoyed doing. It's only gonna be my 1 year thing. They say they're gonna only buy 1 once a year.

18:16

Of course, they might buy more than once a year, but they're gonna tell their spouse, hey, this is just a one time thing. It's gonna be really can you please give it to me a birthday gift or whatever? Right? Sure. No problem.

18:25

150 bucks, 300 even 300 bucks. Let's think about it for 5 minutes. But okay. Let let's do a birthday gift. Right?

18:31

Your anniversary gift or birthday gift to myself. 300 bucks, I can do it. And that's a $15 membership for 20 months. Right? And you could even sell it.

18:41

Right? You could sell it to some You buy this 15 you buy this $150 course, and you get 6 months of my xyz membership plus the course. That's so much easier to sell. Right? So, anyway, I hope this is helpful.