Do Membership Sites Work? A Deep Dive Into Data

You have been tossing around the idea of building a membership site for your business; you know what content you want to include and the different membership tiers you could offer. But before you put in all the time and effort, you want to know: do membership sites really work?

Is a membership or subscription model the best choice for my specific business goals?

Launching a membership site is a big project, so you are right to ask this question before jumping in. In this post, we use a data-driven approach to help you determine if a membership site is the right model for your business.

Start Here: What Are Your Business Objectives?

Understanding your business objectives is the cornerstone of choosing a suitable model. It’s like setting a destination before you chart a course. By defining these goals, you can determine if a membership site aligns with your vision and if it’s the right strategy to propel your business forward.

Virtualizing Traditional Services

• Are you currently offering services face-to-face and want to leverage the power of subscription services to reach a broader audience?
• Can these services be effectively transformed into digital content or online consultations?

Building Communities

• If you are passionate about a particular niche, hobby, or topic, ask yourself: is there a demand or interest from others in this space?
• What would be the value for members in this community? Is it purely social, or are there educational, inspirational, or financial benefits?
• How would you foster engagement within this community to ensure its longevity and growth?

Showcasing Expertise

• Are you aiming to position yourself as a thought leader or expert in a specific domain?
• Will your membership site offer unique insights, research, case studies, or tools that aren’t readily available elsewhere?
• Is there a gap in the market for the type of content and resources you plan to offer?

Monetization and Revenue

• Is generating revenue the primary goal, or is it a supplementary aim?
• What is your desired income from this membership site? This will help you figure out pricing structures, membership tiers, and the number of members you’ll need to recruit and retain.
• Have you considered potential costs associated with running the membership site, like platform fees, content creation, and marketing expenses?

Continuity and Scaling

• Are you looking for a model that provides consistent monthly revenue, as opposed to the highs and lows of one-off sales?
• How scalable is your membership idea? Can you grow without compromising the quality of your service?
• What’s your long-term vision? If your membership site succeeds, how will it evolve over the next 5-10 years?

Feedback and Iteration

• Are you aiming to use the membership model as a feedback loop to refine and enhance your offerings continually?
• How will you incorporate member feedback into your content and community strategies?

By answering these questions, you can paint a clear picture of what you want your business to achieve. With this clarity, you will be better equipped to decide if a membership site aligns with your goals and has the potential to help you achieve them.

Most Common Goals Among Membership Site Creators

You have established a loose foundation of what you are hoping to achieve through this online membership business.

The goal of this article is an answer to the question: “Do membership sites work?” 

So what does “work” mean to you?

We have supported thousands of membership sites for over 13 years, and among all of these sites, the desired outcomes boil down to three key facts about the subscription model:

1. Recurring Revenue

Membership sites enable you to generate recurring revenue through monthly or yearly membership dues. This revenue is more predictable and stable in comparison to one-off purchases.

Plus, free or paid members give you an audience of warm leads you can introduce other products and services to.

2. An Engaged Community

Memberships often lead to deeper relationships with your customers, as well as regular peer-to-peer connections. You’ve created a safe space, focused on a specific niche, and gated by an entry fee or other approval process.

As members interact with your content and each other, they become more engaged and invested in your membership. 

3. Thought Leadership and Personal “Brand” Authority

Selling memberships based on your expertise can help further your own authority within a specific niche or industry.

A thriving membership built around your expertise boosts your personal brand recognition and opens the door to all kinds of opportunities—from business partnerships and sponsorships, to live talks and book deals.

These reasons are generally why business owners decide to start a membership site. But what does the data show?

3 Key Membership Site Statistics to Consider

Most business owners are looking for ways to generate income and build their business that they can sustain over the long-term. Building a membership site is a great way to make that happen.

Here are three key statistics that support this idea:

1. Over 73% of membership sites increased revenue. If the goal is to earn more, memberships definitely fit the bill.
2. About 61% of membership site owners had greater job enjoyment and fulfillment. Who doesn’t want that?
3. 70% of businesses see memberships and subscription models as the key to future business growth. The goal of most businesses is to grow, after all.

If any of these things sound appealing to you, adding memberships to your existing business could be the right decision. However, if you want to set yourself up for success, you will need a strategic plan.

What Makes a Membership Site Work?

Not all membership site owners experience the same results. There are many reasons, like different industries, audience sizes, membership components, and other factors.

But there are a few proven things you can do to increase your chances of success.

Spend Time Building an Audience Before You Launch

Before you start selling access to your membership, consider building an audience first. Of course, you can launch a membership without an audience, but you likely won’t see the same level of success as you would with an audience already in place.

Building an audience can greatly affect your brand’s online presence. More social media followers can mean more engagement, new newsletter subscribers can mean new sales, and having an audience before you launch can help your membership’s performance overall.

According to a subscription industry report, more than 79% of memberships that built their audience pre-launch saw higher levels of success across all key performance indicators. 

Keep Your Membership Enrollment Open

Many online entrepreneurs swear by closed enrollment periods. The idea is that when you close enrollment, you create a feeling of scarcity. Then, potential customers are more likely to purchase to avoid feeling left out.

Another version of closed enrollment is invite-only membership, a rigid approval process, or a high ticket membership subscription.

However, research suggests that open enrollment produces the best results.

In fact, membership sales and revenue numbers tend to be two– to three–times higher for open memberships. While closed memberships do produce lower churn rates and higher average member lifetime value, open enrollment is the industry standard.

Just consider that of those surveyed, one-third of those running closed memberships said they were planning to switch to open enrollment in the future.

Be Well-Informed When Pricing Your Membership

When deciding on membership prices, it’s easy to focus too much on the amount you would like to earn. While you should absolutely consider the cost of creating your membership content and website, it’s essential to factor in the industry standards as well as your target audience.

If you are trying to settle on a price, first look at the typical ranges for your type of membership:

• For example, almost 29% of B2B memberships charge between $25-$49 per month, and 42% charge $50-$99 per month.
• About 49% of B2C memberships charge $25-49 per month, almost 29% charge less than $25 per month, and 17% charge $50 per month or more.

At the end of the day, remember that charging more does not necessarily mean more income for yourself. For instance, memberships in the $50-$99 price range actually take home less per year than those in the $25-$49 tier.

Keep the Focus on Community 

Part of building a successful membership is creating a sense of community. While it’s true that people sign up for memberships in order to get access to exclusive content or experiences, they often end up staying for the community.

Memberships with a dedicated community area enjoyed much lower churn (6.12%) than those without a community (9.26%). Memberships with community features like integrated Slack or Discord channels saw engagement as high as 46%.

Distribute Weekly Member News Roundups

Keeping your members engaged is necessary for the health and longevity of your membership offering. Community is something people value in a membership, and community is built on active engagement from your members.

There are many things you can do to keep your members engaged. Of those surveyed, 57% of membership owners distribute weekly member news roundups to keep their members engaged. It keeps members returning to the platform to read more and is a quick and easy way to share content you’ve already made. 

Leverage Social Media

Social media is likely already a part of your marketing strategy, so using it to market your membership makes sense. If you can make your website, newsletter, and social media work together, you will always have a way to attract new members.

For 15% of online membership site owners, social media is the main source of new members. For about 24%, content marketing is the No. 1 source of new members. And for another 31%, email marketing is the main source.

You have likely seen how these channels work for your business already, but creating a plan to use all three together can help you find new leads for your membership community.

Challenges of a Membership Site

Membership sites can help businesses generate revenue and build brand authority, but they come with challenges. Here are some common issues membership site owners encounter:

Technical Challenges

Whether you build your membership using WordPress and a plugin or pay for a third-party membership platform, you will have to learn to use the software. And there is always the possibility of technical issues when you have to integrate a new software with something you’re currently using.

Content Creation: Biggest Challenge for 31% of Creators

To keep the membership value high for your members, you will need to create new content regularly. It can take a lot of time and resources, and 15.1% of membership site owners surveyed said creating the initial content was the biggest challenge.

Membership Management: Dedicate an Average of 18 Hours Per Week

Creating a content marketing and social media strategy is necessary to bring in new leads, but executing it can take time and energy. It takes one person an average of 18 hours a week to manage a membership. Memberships can be significant time investments, especially for solopreneurs who also have full-time jobs.

Evidence that Proves Membership Sites Work

Even with the difficulties of running a membership site, it can still be a valuable source of revenue for your business. And these stats prove it:

• About 50% of established memberships make six figures per year, with almost 6% making seven figures.
• Average revenue of all memberships operating for more than a year was $179,880
• Average revenue of established memberships was $307,805 
• 44% of established memberships have had more than 1,000 members join during the lifetime of the business.
• Almost 89% of memberships have a churn rate below 10%, with over 44% achieving churn of less than 5%

Case Studies

The Paid Memberships Pro customer showcase is full of examples of how business owners used the plugin to build their membership site. Here are two examples of membership sites that work.

Gold Country Yoga

When the COVID-19 pandemic hit, Gold Country Yoga had to close its doors to its students and lose its revenue. But by using Paid Memberships Pro features like content restrictions, they built a website with 200 lessons for their members and offered four different membership levels.

La Scimmia Yoga

La Scimmia Yoga was created in 2012 by Sara Bigatti, hosting a first Vinyasa Yoga class for beginners, and has continued to grow and expand ever since.

Often moving house, Sara hasn’t always been lucky enough to have a Yoga school close at hand or lessons that were in a language she could understand. Using Paid Memberships Pro, Sara was able to share her yoga knowledge with a whole new audience, lowering the barrier of entry.

Will a Membership Site Work for Your Business?

The data tells the story. Membership sites are an excellent way to earn more money and grow your business. If you’re ready to add a membership site to your business and let it work for you, sign up with Paid Memberships Pro today. We have different pricing plans to work with your business, and our blog is full of ideas to help you develop a profitable membership site.