I have two clients that add, on average, the same number of members each month. One client just came on board, and has been holding steady at a respectable 15,000 members for the last three years. My other client has been with me for three years and is at over 50,000 members. The only difference between these two memberships is the rate at which members quit their subscription, and this directly impacts their recurring revenue.
Again, each brings in about the same number of new subscriber members each month, each has similar marketing acquisition costs, and each invests heavily to generate new customers. But one of them has also focused as much time and effort on retention and now has more than triple the recurring revenue. The products they launch are more successful, more people attend their events, and it’s a business that’s a lot more fun.
Trouble is, I encounter member programs all the time who ardently believe they’ve already done everything possible to retain their members. They’ve created new member onboarding email sequences, member engagement campaigns, and drop-down offers. None of it worked, so they think they’ve done all that can be done. Unfortunately, although admirable, so many of these efforts only make retention problems worse.
My client Perry Marshall has always done a great job engaging new members into his community. You’d be hard pressed to find a more vibrant and engaged membership community than “Planet Perry.” And yet, when focused attention was applied together with a transformative offer, the impact was huge.
Last year, Perry launched a new offer together with this membership program. He called this product a “30-Day Reboot.” The promise is to transform your life by hitting the reset switch. Here’s some copy from the sales letter:
- We will calmly, methodically, remove and replace activities in your life. On an almost-daily basis, we will swap a stress-increasing activity for a stress-reducing activity; a mind-saturating activity for more mental space.
- You’ll have a new set of habits and rituals for every single day. A new way to handle and categorize time.
- You’ll suddenly, for the first time, know what to do when you get anxious and feel the itch to lapse back into addictive information overload behavior.
- You’ll belong to a community of people who embrace the same set of habits as you.
- You will seek out different information than you did before.
- You’ll have a new relationship to the Matrix. How to manipulate it without being manipulated.
- You’ll suddenly see the ‘treadmill’ for what it really is. And recognize its attempts to suck you in.
- 30 days from now, your life will be unrecognizable compared to what it is today. The chaos and complexity will have receded. Replaced with peace and calm.
Notice how different this is from most membership subscription offers that spend a lot of time describing exactly what they have to deliver? Rather than describing the membership site, the monthly newsletter, or the community, this copy focuses on the life transformation the new member receives from the 30-Day Reboot transformation.
The results have been phenomenal. Note, we did nothing to change the monthly deliverables. We didn’t add pages to the newsletter, add more content, or change what we were delivering on a monthly basis. The single difference was in how Perry engaged members during the first 30 days of their membership — AND we raised the price. Because rather than joining for $99.00, they purchased the 30-day Reboot and joined for a total of $299.00.
The result is that Perry’s new membership growth has increased 38 percent from the same marketing investment. Even though he raised the price, more people are attracted to the proposition, click to buy, and enter their credit card number to join.
In addition, those members stay at a rate of 10 percent higher than before the 30-day Reboot. The numbers are interesting to review in detail, because retention is lower during the first 30 days of membership. This program allows new members to figure out more quickly that it’s not for them, and they jump ship faster than they did in the past. However, each month thereafter, retention is much higher, for an average increase in member value of more than 10 percent.
This is a multiple six-figure increase in recurring revenue from the same marketing efforts as before. And, do you want to know the best part? The program generates tremendous results for members. There are hundreds of testimonials from members who have transformed their lives by implementing Perry Marshall’s teachings on the 80/20 principal into their lives.
You really can grow your subscription and membership revenue by focusing more on member retention and engagement. You’ll generate more money, your business will be more fun to run, and your members will get better results with what you deliver. Membership retention increases recurring revenue.