In this article of Tips In Ten, and in a couple article that follow, I’m going to talk about membership programs. In this article I’ll talk about why membership programs are a powerful way to grow your business. In the next article I’ll talk about what you can turn into a membership program. In the third issue, I’ll discuss some technologies you can use to create a membership program.

Membership programs are those programs you often see offered where a business expert will invite people to pay so much money each month in order to get access to information or expertise or content. Some examples that I’ve seen recently include:

• Pay $9.95/month to get access to an exclusive forum of content by other people who are just like you.
• Pay $19.95/month to get access to Private Label Rights (PLR) content.
• Pay $39.95/month to get access to videos of panel discussions where leading business experts talk about a particular situation.
• Pay $49.95/month to get access to exclusive interviews with other business experts.
• Pay $99.95/month to get access to group coaching led by a business expert.
• Pay $499.95/month to get access to super-exclusive webinars and group telephone coaching.

… you get the idea. You’ve seen these before. You might even include Software as a Service (SaaS) as a type of membership program, too. I won’t speak specifically to SaaS in this series because it usually requires a lot of up-front investment on your part. It’s a lot easier for you to get started with a membership site filled with access to content instead of access to software. If you want to offer a membership to SaaS, a lot of what I’m writing about here will apply. However, just be aware that you’ll need to make a significant effort up-front.

One of the first things I want to talk about is “why”. Why a membership program? Why should you consider including one in your business?

Most membership programs are monthly (although I have seen some quarterly or annually). The customer pays regularly to get access to whatever it is that the membership program is offering. The business owner who set up the membership program makes that money each and every month, and they make it from a large and growing pool of people. So the “why” is simple:

• On the customer side, they willingly buy into membership programs because the access to the content is going to offer them a significant benefit at a lower cost than if they got the information exclusively.

• On the business owners side (and this is important for you, so take note!) you get recurring revenue. Recurring revenue is magical. Each and every month, money arrives in your bank account. It helps to smooth out the ups and downs of business income while reducing the amount that you work.

Membership programs allow you to leverage your time. Rather than serving a pre-determined number of clients in a day (pre-determined because there are only so many hours in the day), you are able to serve so many more. It’s a simple equation of spending “X” amount of time on one client or that same amount of time on many.

Let’s do some math for an example: We’ll compare the work of two different coaches – a coach who charges $100 per hour to the work of a coach who charges $100 per hour PLUS has a membership program:

Coach #1 charges $100 per hour, they work 40 hours a week but between administration and marketing and research, they take on 5 1-hour sessions each weekday to earn ($500 per day x 5 days) $2,500 per week. In a 4 week month they make $10,000. Not bad.

Coach #2 charges $100 per hour, they work 40 hours a week but only take on 4 1-hour sessions each day. They also have a monthly membership program with 200 subscribers at $25 per month. So they earn $2,000 per week from coaching ($400 per day x 5 days) for a subtotal of $8,000 in a 4 week month, plus they earn an additional $5,000 per month from their membership program… for a grand total of $13,000 per month. Added to that additional amount of money is the fact that they are doing substantially less hourly coaching work – only 20 hours per week instead of 25 hours per week like the first coach. In a month, that’s a total of 20 extra hours that won’t be spent on coaching! Instead, some of it can be spent on adding value to the membership program and some of it can be spent building the business and some of it can be spent with family and friends.

The other reason that Coach #2 has a better model is this: Over time, Coach #1 may be able to slightly increase their rate but rarely will they be able to increase the number of sessions they can take on. On the other hand, Coach #2 can grow the membership to more people without spending any more time each week. In fact, in the example above, every 4 clients is equivalent to an hour of coaching for coach #2!

Convinced? I hope so. Of course, you won’t automatically get a big pile of subscribers on day one. It takes time. But it happens as long as you spend some time to build good quality content and you spend some more time marketing it. Eventually, you might find – as other entrepreneurs have – that they got out of their “hourly” work entirely and became just membership program marketers.

So far, I’ve just talked about a very simple membership program: One offering for one monthly rate. But membership programs are exciting for another reason: You can easily create tiers of service, depending on your clientele. You might consider an entry-level program, a slightly more expensive “intermediate” program, a slightly more expensive “advanced” program, and very expensive “ultra-exclusive” program. You’ll find that some people will enter one program and stay there but others, especially those who benefit from the value you give, will advance to additional programs. So you might have an entry level membership program for $19.95 but you might have some advanced programs for hundreds of dollars per month.

I’m mentioning this now as a way to sweeten the deal but I don’t want you to worry too much right now about what you’ll offer at different tiers. If you start out with one, standard membership program, you can grow that one and eventually introduce a slightly more advanced version and grow that and then introduce an even more advanced version later. In other words, you don’t have to sink a lot of time and effort into a massive multi-tier membership program right now. Start small and build it over time.

Related posts:

1. Understanding Membership Programs in 10 Minutes – Part 2
2. Understanding Membership Programs in 10 Minutes – Part 3
3. Article Submissions in 10 Minutes a Day – Part 2

So far, I’ve talked about out-of-control business growth that costs so much up-front, the business cannot keep up. And, I’ve talked about business growth that spikes (increasing then decreasing) so that the business is stuck with a high bill from the brief burst of business.

And in this blog, I want to talk about yet another problem of business growth that I’ve seen:

Problem 3: The lack of control over the business. When a business grows – whether it’s a sustained increase or a spike, the business owner/director/manager tends to lose control over that business. In some cases, customers “take over” in the sense that they might demand additional efforts which might not normally be granted but which are added because the money is there. In other cases, business partners “take over” because they see the money coming in from a certain market and they want to follow those dollars. In other cases, resellers “take over” because they feel that they are bringing in enough money for the business to make demands on the business. One example I’ve seen is a consultant who was asked by a client to design his website. Business was busy and the consultant should have said no, but the client was generating so much revenue that the consultant couldn’t say no. It didn’t go well and the consultant lost a client and the revenue. And another example I’ve seen is a reseller who earned so much money for a manufacturer that the reseller started demanding price cuts and excessive promotional considerations.

Solution 3: The best thing to do is stick to the business plan. (Uhhh…you have a business plan, right? MAKE SURE YOU HAVE A BUSINESS PLAN…then stick to it). If you’ve done your research and you start the business with the confidence that the plan is going to work then you should be okay (assuming that your research led you in the right direction). Yes, you may need to shift with the market, but that needs to happen carefully and thoughtfully and not “on the fly” based on whoever is sending the most money right now. Your business plan should be your North Star that guides your business. And when you need to change your business plan, you take time to do it carefully.

There are certainly other problems that result from too-fast, unmanaged business growth, but these are three common ones that I see from time to time.

Related posts:

1. When Business Growth is Bad – Part 2
2. When Business Growth is Bad – Part 1
3. Business Growth in Ten Minutes a Day… IS Possible

Project Management gone wrong #1: ‘Sam’ was a web design freelancer who was hired by a multinational corporation to help them create a user-friendly web-based educational tool. Unfortunately, the details of the project changed frequently. Even the name of the project changed an unbelievable 6 times over the course of the project! Sam did his best to make each change as it reared its ugly head but he found that there were simply so many changes to be made that he quickly burned through the pre-determined budget trying to match existing content to the company’s inability to decide on anything; no money was spent on new content. The result? Sam delivered a project but it fell into disuse quickly. Sam didn’t have a good experience working with the company and the company was disappointed with the results so they never hired Sam again.

Project Management gone wrong #2: ‘Maria’ worked in an IT department at a large organization. She was given a budget and assigned to complete a software conversion that would see some of the company’s data converted into a different format. As time went on, however, the budget was adjusted by the CFO who felt that she didn’t need as much money as she did. Later, a delay in the project caused by previously unforeseen conversion issues meant that she reached the end of her budget without completing the project. The CFO told her that no further funding was available. Maria moved on to other projects and the conversion that she hoped would be her key to a promotion was shelved indefinitely.

Project Management gone wrong #3: ‘Erika’ was a freelance writer who was contracted by an organization to create new hire manuals. The project started, then faltered, as the Recruiting and Training manager decided to revamp the learning path of new hires. The project re-started, then faltered again as several managers in the client organization disagreed on the expected outcomes of the manuals. The project re-started, then faltered yet again, as the Director of Human Resources explored the possibility of revising the project to include other manuals as well. With every re-start, the budget burned up because Erika needed to get up to speed on the changes.

These 3 stories are true. They all took place within the past 6 months. They all happened to people I know.

If you look closely at the stories, you’ll note that each one experienced some problem related to the three elements of project management: scope, budget, and time. While each one had a primary issue (Sam’s was scope, Maria’s was budget, and Erika’s was time), every element is interrelated and one impacts the others.

What is needed here is strong project management. After all, each of these are indeed projects. But organizations simply pass the entire project to one person – an internal employee or an outsource professional – who is hired to do one thing (complete the work) but is actually expected to do two things (manage the project and complete the work).

Simply put, a project manager is needed as well. Project management requires a unique set of skills and talents and training that Sam and Maria and Erika (and others) may lack. These professionals were skilled in their area of expertise but were not as interested in doing the work of project management.

Project management requires skills in resource management, negotiation, customer service, creative problem solving, and there’s even some political savvy needed.

Ironically, project management seems like an additional layer in the hierarchy of a project but it is an essential layer that results in greater benefit than if the project management role was folded into the role of the person performing the work. A project manager?

• Can keep all parties on track and keep the flow of information moving.

• Acts as a conduit of communication to make sure all parties are talking about the same things.

• Saves time and money by keeping projects moving and ensuring that budgets are spent wisely.

A project manager seems like an additional layer in the project but the result is the same as the equation 1+1=3. The very presence of a project manager adds value to a project by ensuring that the scope, budget, and time all work in unison so the project finishes successfully.

A project that finishes successfully starts with a project manager. If you have a project – whether large or small – you can ensure its accurate and timely completion with someone shepherding it through the creation process. If you have a new initiative at work, or if your business has evolved and requires a solution, or if you’ve been tasked with creating internal or customer-facing content, don’t start with the creation of the work. Don’t ‘roll up your sleeves’ and dive in. Don’t go looking for a freelancer. Start with a project manager. And that will be an investment into the successful completion of your project!

When you succeed, I succeed,

Heather Villa, CMA, MBA, MSM

Related posts:

1. Project management best practice: The report
2. Horror story from the front lines of project management
3. Project Management Success Requires Flexibility