KaChing: How to Run an Online Business that Pays and Pays

by Comm, Joel

  That’s the problem. Buyers don’t want to choose between hundreds of applicants for a job they post. They want to choose between a handful of highly qualified and experienced professionals. Providers want to make clear that they are professionals who take their work seriously. That 10-buck fee keeps out people who have no qualifications at all and who feel that they have nothing to lose by writing a pitch. It helps to maintain the quality of Elance’s providers—and it also gives the site some additional revenue from providers who are too busy to bid regularly or who rarely win jobs.

  So how do you set a price for your membership site?

  There are a number of factors you have to consider. As always, competition will be one, but subscription sites are an underexploited opportunity. Unless you’re creating a club for singles—in which case, you’ll have lots of company—there’s a good chance that you’ll find that your site is the only one of its kind in your field.

  That means you’ll need to think about value, and you’ll need to think about the services you’re offering. Most important, you’ll need to think about the return that your members are going to be receiving for their monthly subscription. They don’t have to get that return every month—and you don’t have to charge every month if you don’t want to. Newspapers and magazines often take an annual fee. New subscribers are at their most enthusiastic when they first sign up. As they see the money dripping out of their account every month, there’s always the chance that they’ll cancel. They are less likely to do that in the middle of an annual subscription period, and they are more likely to renew at the end of it, too.

  But if your subscription site supplies information, contacts, or services worth $1,000, for example, then demanding $20 a month looks like a steal.

  Of course, measuring those returns is never easy, so review the information products in your field. Think of your subscription site as offering the equivalent of one relevant e-book per month and try charging a rate similar to the price you’d charge for that e-book. There’s no scientific formula here, but if buyers in your field are known to pay $70 for an e-book that they understand will deliver solid returns, then there’s a good chance that they’ll pay a similar amount for membership in a club that promises similar returns from the same kind of information.

  If you find the price is too high, it’s always easy enough to lower it. Declare that you’re slashing the price for a limited time, and not only will you be able to adjust the subscription fee downward until it reaches the right level, you’ll also have the chance to create the kind of time-limited offers that bring quick results.

  Creating Your Membership Site the Easy Way

  Subscription sites look fairly complex. They’re filled with all sorts of valuable features: content pages, members’ profile pages, groups, internal messaging, and all sorts of other useful things that help members to network and learn. You can even include multimedia content and training videos.

  Consequently, they have to be hard to build, right? They have to be expensive to create, difficult to plan, and a real challenge to design, launch, and put together, don’t they?

  Not a bit of it.

  At the beginning of this book, I pointed out that the Internet has now developed to the point where proven revenue generators have become automated. Web site publishing can be done by picking a domain name, choosing a template, and filling in the gaps with your own pictures and text.

  Blogging is even easier. Automated programs let you go from user to publisher, posting your first online blog in less than five minutes. The next day, once Google has approved your AdSense application, you could even be seeing your first advertising income.

  Creating membership sites is now just as simple. A bunch of different programs are available on the Web that mean you don’t have to know anything about coding, designing, or planning to be able to launch your site. You don’t even have to hire a programmer or a designer to do all of the hard work for you. It’s easy enough to do yourself.

  One of those programs is SubHub.com (Figure 6.3). Created by Miles Galliford, an expert on digital content, the site offers a bunch of different features that allow publishers to charge a subscription fee or even to offer pay-per-view videos. According to Miles’s own Squidoo page, a subscription site should include:• Secure premium content

  • A searchable database of members’ data

  • Password control, including the ability to disable the password at the end of the subscription period, notice when a single password is being shared among different users, and automatically remember returning members Figure 6.3 SubHub (www.subhub.com) lets you build and manage a subscription-supported web site from one place. Think of it as combining the ease of blogging with the revenues of a paid site.

  • Payment integration, including regular billing

  • Autoresponders that send out messages after sign-up, before renewals, and so on

  • An easy-to-use control panel

  It’s no surprise to find that his own platform offers all of these things, as well as search engine optimization, the ability to include AdSense units and affiliate links, a way to sell information products from inside the site, and a range of templates to choose from.

  SubHub is not the only service offering the ability to create membership sites easily. WildApricot (www.wildapricot.com) is really geared toward helping nonprofits and clubs create member sites, but it can be used to build subscription sites as well. With fees that begin at $25 per month (although the $50 option offers more useful features), it’s not terribly expensive, but the sites can look a little cheap, too. At $97 per month, SubHub is almost twice the price, but the sites created do appear professional—and are worth paying for.

  GrowingforMarket.com (www.growingformarket.com) was created using SubHub. The site, which provides information for farmers, offers three different subscription levels. Online subscribers can download a PDF of each new edition of the magazine; “full-access members” can also access the archive; and “full-access-plus” subscribers receive a printed copy of the magazine each month.

  Note that there are no community features on this site. SubHub simply allows the publication to restrict access to its content and charge a rate that starts at $30 per year. Assuming that the site is paying an annual discounted fee to use SubHub, it wouldn’t need to sell more than 33 subscriptions to cover the hosting, building, and maintenance costs. When you’re supplying key information to a tightly niched market, it’s possible to do that with content alone.

  When you’re looking to build a membership site, there are plenty of other options around as well, including MemberWing (www.memberwing.com), a WordPress plug-in that lets publishers hide their premium content behind a pay wall. It’s also possible, of course, to create all of these features yourself. The advantages are that you won’t have to use one of the templates the platform provides and you’ll have complete flexibility about the site’s look, feel, and layout. If you’re handy with Dreamweaver and know what to do with PHP, then it shouldn’t take you too long. If you have the cash and want to hire someone to do it for you, it shouldn’t be beyond the skills of most decent PHP programmers.

  A platform like SubHub will give you the site, complete with the protected content, membership forums, and all of the other things you’ll need to persuade people to sign up and pay. But what if you want a print magazine like the one I send to subscribers of my Top One Report?

  One option is to do what GrowingforMarket does: Create a PDF version of the magazine and place it behind the pay wall. It’s simple, and because there are no production or delivery fees, you can charge a small amount for it. In effect, you’re creating a different kind of blog, one with the format and layout of a traditional magazine. You won’t get the piracy protection, though. While PDF documents do have some level of protection, they can always be shared, e-mailed, and passed around.

  In addition, they don’t have the perception of value that comes with a print publication, nor do they have the same
ease of reading—which is why even GrowingforMarket charges more to send a copy of its publication to its subscribers’ physical mailboxes.

  Creating a print publication doesn’t have to be difficult or expensive. While it’s always possible to work with a local printer who can run off copies for you, that can be expensive, especially for small print runs. Laying out the publication each month can be time-consuming, and you’ll still have to cope with changes in your subscriber list—which happens often, especially as your list grows. If you’re lucky, and you can work the extra cost into the price of the subscription, you might find that your local printer is also willing to address the envelopes, add the postage, and mail them for you. That should help to save you—or your assistants—some unpleasant work each month.

  Again, though, much of the tricky stuff has now been simplified with automated online systems. One option is to use MagCloud (www.magcloud.com), a service created and run by Hewlett-Packard. You can create your magazine using any design program you want, upload it to the site, and receive a proof copy to review. Once it’s approved, the magazine is added to MagCloud’s store and is available for sale on a print-on-demand basis. The cost for publishers is 20 cents per page, but publishers get to set the sale price, so any rate above 20 cents is profit.

  Don’t expect too many one-off sales just by listing your magazine on the web site, though. Promoting MagCloud’s store isn’t the best way to market your magazine. Instead, use the site’s bulk orders feature. You’ll be able to mail in your subscriber list and send the magazine to all of your subscribers automatically. Once the number of copies printed reaches 20, the cost falls by 20 percent. You’re billed for the printing costs, but if you’re collecting the subscription fees automatically anyway, that shouldn’t be a problem. You’ll have the cash.

  The result will be a magazine of, say 24 pages, that costs $3.60 plus shipping to produce.

  Those are just the printing and production costs. The real work comes in writing, design, and layout. Although a printed publication and a blog are just two ways of delivering information, the format of the information is very different. Readers have less patience online, so they’re more likely to read short posts of 1,000 words or even less. Magazines tend to have three different sections, each with content of different lengths. The front-of-book section might have an editor’s introduction, then news summaries describing events in your field. It’s supposed to pull readers in and spark their interest before they move on to the features.

  Those features are the meat of the magazine, the place where subscribers will really feel they’re getting their money’s worth. The articles there can be longer than the kinds of posts you might be placing on a web site. They’re likely to be more detailed, perhaps include feature interviews or provide clear step-by-step instructions to achieving a goal. Your model will be the kinds of articles you can read in magazines rather than the kinds of posts you can see on web sites.

  Finally, the back-of-book section might include columns or reviews—additional content that subscribers might find interesting. Of course, these are just guidelines. It’s always possible to mix things up and decide how you want your publication to look.

  As for the writing—the most important part of your magazine—creating an entire magazine by yourself is likely to be too difficult and take up too much of your time. You will need to outsource the writing to members of your team, to professional freelance writers, or to guest contributors who are experts in your field. You should find that many people are willing to contribute for free, as a way of putting their own name and expertise in front of your readers, but it’s not difficult to work out how much you can afford to pay for regular contributions of features or columns. It’s still best to hand over the general management of the publication to someone on your staff. Creating the kind of magazine that actually contains the value it appears to offer is a pretty demanding job.

  Even that is not as demanding as bringing in subscribers, to both the magazine and your membership web site. Because part of the value of the site will often be the community and its networking opportunities, the site will need a critical mass of members before subscribers will feel they’re getting their money’s worth. The best option is to focus first on building the community through your blog, Twitter timeline, and other social media channels; only after your traffic reaches a reasonably high level should you open the elite version of your subscription-based community.

  Your magazine will be particularly helpful in making the conversions. The standard tactic for bringing in subscribers is to create a low-cost trial that automatically triggers the subscription fee if there’s no cancellation. I usually offer a trial of the Top One Report for $1, and I make the offer in various locations. It appears at the end of my e-mail newsletters; I tweet it occasionally in my timeline; there’s a giant button on my web site that leads to my TopOneReport member page; and, as we’ve seen, I also talk about it whenever I give away a free information product to help build my mailing list.

  The community site tends to appeal more to people I meet and address at conferences. They like the idea of being able to continue talking and exchanging information even after they have left the hotel and headed back home. Much depends on where you’re doing the marketing and whom you are marketing to.

  Membership sites can be huge revenue generators. If you can set a high monthly fee and bring in enough paying members, you can find that you’re running a club that’s bringing in tens of thousands of dollars every month and a handsome six-figure income in subscription fees alone. Although the mechanics of creating that site may no longer be difficult, it will require work and expense to build and maintain.

  When subscribers are paying a regular fee, they expect to receive full value for those fees every month. Otherwise, you’ll find that the number of your subscribers will fall off pretty quickly.

  While the writing, editing, and printing are all things you can outsource, a membership site does not offer the same kind of passive revenue as a page of content with an affiliate link or an information product sitting on ClickBank and being promoted by affiliates. New content has to be commissioned, created, edited, and published regularly. And because the time lag between writing, printing, and delivering is so much longer than it is online, the printed publication will need long-term planning and a lead time of at least a couple of months.

  Even maintaining the membership site itself, where the members themselves will be doing most of the work, will need plenty of attention.

  On the other hand, being the head of a community of paying members can be both incredibly rewarding and remarkably satisfying.

  7

  Coaching Programs

  At the beginning of this book, I made a confession. I confessed that the success I’ve enjoyed online wasn’t all due to me. Sure, I like to tell myself that even though I might not have invented the Internet, at least I invented Internet marketing, but that’s not true, either.

  My growth has come by working hard, spotting opportunities, testing different strategies to see which bring the best results, and through determined implementation.

  But it’s also come by learning from others. Right at the beginning, I hired a business coach who helped me to find the best way to work. I’ve since hired other coaches who have been able to provide great advice and the benefit of their experience. They’ve been invaluable whenever I’ve moved into an area I’ve never operated in before, and they’ve certainly more than repaid the fees that I paid them for their suggestions.

  That’s why once I found that some aspects of Internet marketing were coming easily to me, I was happy to share my knowledge with other entrepreneurs.

  Of course, my e-books, my information products, and my web sites were doing that already. But there’s always something a little special about being able to meet with the coach, ask questions, and receive answers focused on your particular problem and your specific goals. It’s special to the person receiving the information, an
d it’s no less special to the coach. As a coach, I get the satisfaction of being able to interact personally with my audience instead of merely pouring my knowledge onto the page and hoping it’s valuable to someone.

  It can pay pretty well, too.

  While fees can range widely for coaching—from zero at talks where the main benefit is to lead people to buy your products (which, with the right talk can generate some giant sums) to thousands of dollars for just a few days’ work—coaching is one of the most lucrative ways for a successful entrepreneur to make money out of his or her expertise.

  In this chapter, I explain how, once you’ve created a successful Internet business, you can move into coaching. First, I explain what coaching is; then I discuss strategies for branding, because who you are is going to be almost as important as what you know.

  Then I talk about using PR to get mass impact for your coaching events and explain how to start a low-end coaching program before ramping it up to the high-dollar stuff.

  Coaching isn’t for everyone. If you’re happy building your company by yourself, creating content, marketing products, and forging joint ventures, then that’s fine. It’s a great way to build a prof itable business. But if you do want to give back a little more, then coaching can be both a valuable and a very satisfying way to help others along the path you’ve created and to cash in on your knowledge.