You might have heard about membership websites or even asked the question, “What is an example of a membership model?”
After all, entrepreneurs today with significant skills in a particular area are interested in creating businesses that utilize the membership model, since it helps them leverage those core skills and receive recurring cash flow for each sale.
But before we shower in dollar bills, it’s important to flesh out exactly what the membership model is. I think some membership business examples would be a great way to highlight exactly what we’re talking about.
What Is An Example Of A Membership Model?
NetNetHunter.com is a great example of a website that uses the membership model. Prospects interested in the niche investment strategy covered by Net Net Hunter and who are interested in the site’s value proposition, or offer, sign up for membership, agreeing to ongoing yearly payments to maintain access to the platform. Those new clients then get access to everything promised to Net Net Hunter members in the membership section.
Over the last decade, there’s been a paradigm shift by players in many industries to adopting the membership model. This uptake is because the model generates a steady stream of cash flow while creating significant upsell and cross sell opportunities. It also allows founders to capitalize on the significant skills and experience they already have in their particular niche: auto repair, wellness, stock investing, etc.
The membership model also works for offline bricks and mortar businesses. Common examples include:
In real life, the most basic version would be gyms, swimming, and tennis clubs. For your monthly fee, you can access their facilities.
Being a part of a professional community or association means you can tap into expertise and resources related to your industry. These community websites can vary widely and cover nearly every niche.
Software as a Service (SaaS)
SaaS is an increasingly expanding industry, with many companies adopting the membership model. Previously, consumers paid once for the entire product without paying for updates. With a subscription fee, they can access more products and ensure their software is constantly up-to-date.
These are always what many would associate with the membership model. Churches, foundations, and charities need your monthly donations to keep themselves running.
In return, they perform good deeds and assist a community in need.
Netflix, Amazon Prime, and Disney+ are all examples of membership models for content. While not a community where members can engage, it’s a service that provides its audience with content for a fee.
Other outlets like YouTube or the New York Times are similar but allow members to comment on content.
Retail Loyalty Programmes
Retailers often use membership models through loyalty programs. Customers sign up for these programs, often including tiered memberships based on spending levels. Costco is a great example of a membership club that also happens to be a retailer.
Now that we’ve revealed some examples of membership models, how would an entrepreneur create their own business utilizing it?
How Do You Create A Membership Model?
To create a membership model, define the value you’ll provide to members, set pricing and benefits, establish clear terms and conditions, and implement a user-friendly registration and payment system.
The first requirement is to identify how to provide value to your target demographic. This can be achieved by offering exclusive content or discounts.
Once you have members signing up, you must ensure that you keep your members engaged. A community that doesn’t retain interested members is going to shut down. Members can be retained by tapping into analytics and data.
As always, marketing and promoting your community and the onboarding process are essential to attract new members.
By understanding what examples of membership models are and how to build your own, you’re well on your way to creating your own!