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Why Membership Sites Work to Make You Money – Part 3: Charge Less, Earn More

July 11, 2013

The high-end model:  charge more; serve fewer
Many coaches, trainers and other change agents are looking for ways to find clients who will buy high-price services.  This technique seems obvious – you don’t need as many clients if you charge more per client.  And that is true!  Selling a high-price service to high-end clients does work to earn you money, and is a perfectly fine business model.

Piggy BankThe membership site model: charge less; serve more
But, there is another way.  If you have a lot of people paying you a smaller amount for a lower-fee, high-value service, you can earn just as much money, if not more, than you can with the high-end client business model.  Just ask the owners of Target or Wal-Mart.  I’m sure they are just as rich as the owners of Neiman Marcus or Bloomingdale’s.

The sales process
It’s a whole lot easier to get a lot of people to pay a small amount than to get a small number of people to pay a huge amount.  It takes a lot of work and sales expertise to sign on a high-end client.  First, these prospects need to know enough about you to sign up to talk to you or your sales team.  Then you must spend many hours a week talking to many prospects in order to have enough clients.  Not everyone enjoys that kind of sales process.

When you have a service that carries a smaller fee, you can use easier and less hands-on sales methods.  You can send prospects directly from ads, free seminars, social media, emails or blog posts straight to your sales page and on to your shopping cart.

Providing the service
When it comes to actually providing the service, the high-end client who has paid a high fee will be expecting more direct exposure to you.  They want you to be there at the VIP day, at the individual sessions, or running the class.  With this business model, high value = YOU.

On the other hand, when people sign up for a membership site, they don’t expect any direct contact from you. Because you don’t have to provide clients with individual or even group time with you, having lots more clients doesn’t mean lots more work.  As a matter of fact it means less work, because others can do a lot of the work for you.

Attract more people
If you have a high-end model, then many people may have come to your website and left, because they can’t afford to work with you.  You have no idea how many people you have lost because they either saw your high fee, or knew when only strategy sessions were offered that you probably charged a lot.  

When you have a low-fee, high-value service like a membership site, many more people will be able to enter your kingdom, because they can afford to.  More people will get exposure to your message, your methods, your content and to your team.  And they can stay within your “realm” for a much longer time due to the reasonable price.

Proof?  Me!
For those of you who are new to the Finish Agent site, let me tell you that I am living proof of what I’ve written here.  I own a membership site (using the Finish Agent software and business system) that has over 400 members who pay on the average about $87 every 4 weeks.  My 4-week payment cycle actually provides me 13 months in my year!  If you do the math, you will see that this adds up to a nice sum.

I’ve grown my once-small list to over 20,000 by using a combination of Adwords ads on Google, a newsletter, blog posts and articles.  The rest was word of mouth.  

I sell by sending out monthly sales letters.  Most of my readers have heard of my membership site from other messages I’ve sent.  They are directed to the sales page and buy directly from there.

Sounds simple?  It is!
These are the reasons that a low-fee, high-value membership site can work so well to earn you money.  And as you can guess, I’m impassioned about this model because it’s worked so well for me!



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