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When it comes to selling digital products – especially courses, there are a few routes you can take.
On one-hand, you can release your course as a one-off payment. The customer purchases it, and they have access to it forever.
On the other hand, there has been a rise in membership sites / subscription services – entrepreneurs offering access to all of their courses, for a recurring monthly fee.
I’ve spent a lot of time pondering what option I wanted to pursue myself, and had the opportunity to really dive deep into the pros and cons for each strategy.
In this article, I want to help you make your decision, by covering the advantages of disadvantages to selling online courses in a flat, one-time fee, vs a recurring membership option. I don’t think there is a clear best choice for everybody, so I’m going to help you decide what the best option is for you.
The Advantages Of One-Time Purchases
This is the strategy I’ve currently been taking for all of my courses.
However, that doesn’t necessarily mean it’s the best option. And for a while, I was seriously considering changing it.
There are a lot of advantages of selling things with a one-time payment though, and ultimately that’s why I chose to stick with this payment structure.
1. A Finished Product
First of all, let’s put profitability aside. Not all revenue sources are equal – especially if you’re trying to build a business that gives you true freedom in life.
When you create and publish a course, you for the most part, have a finished product. There is not a whole lot of ongoing, recurring work that has to go into it.
While I wouldn’t consider it to be passive income, it’s certainly much closer than a membership site is (more on that later, though.)
That being said, if you want to have the most success selling one-off courses, it’s important that you approach them with a ‘never complete’ mindset. The way I personally structure my courses, I never consider them to be complete. I will continue updating and adding to them as relevant topics enter my mind, and this only adds to the value of the courses over time.
However, since I’m not asking people to continue paying each month, there is a lot less pressure to come out with updates that have a deadline.
Membership sites don’t have this luxury.
2. Psychologically, One-Time Purchases Are Often Easier To Sell
This is true even if it ends up costing more money.
When you ask somebody to purchase lifetime access to a product, you are only asking them to make a commitment one time. When you wish to charge them a membership fee every month, you’re asking them to continue that commitment over, and over again.
I realized this when examining my own purchase behavior. I find it easier to spend $100 on permanent access to a product, than to spend $25 monthly to receive access to it – even if I know I’ll likely unsubscribe before I ever spend $100.
When you sell lifetime access to a product, buyers feel like they actually own it, rather than simply renting it.
That being said, pricing does play a key role here. Once your course price gets to a level where it requires significant thought – or even life changes to be able to afford it ($500-1000+, depending on your market) than pitching the large, one-time fee can become difficult again. In this instance, it may be worth offering a payment plan that allows customers to split the payment over multiple months, but ultimately own it in the end.
Analyze your pricing, your market, and yourself – what option would you feel more comfortable with?
[easy-tweet tweet=”When you ask somebody to purchase lifetime access to a product, you are only asking them to make a commitment one time. When you wish to charge them a membership fee every month, you’re asking them to continue that commitment over, and over again.” user=”JamesMOnline” usehashtags=”no”]
3. Less Customer Support
Because there is only…
- One payment being made
- One clear product, with a streamlined, obvious sequence to follow
- One place for the customer to go
…Customer support inquiries do not occur frequently, relative to the number of customers that you receive.
And when they do pop up, they’re almost always the same questions.
This makes it much cheaper and much easier for you to better serve each and every customer that does need help, which lowers your customer service costs (or make your business more passive, if you’re running everything yourself.)
4. Students Can Set Their Own Pace
Have you ever signed up for access to something, then went through it as quickly as you could to avoid being charged again?
I know I have.
While there are some cases where a sense of urgency can be a good thing, you want your students to engage more deeply with your courses, and actually retain the information that they acquire after purchasing your product.
People that feel incredibly happy with their purchase go on to tell their friends about it. They share their excitement with others, and grow your brand for you – for free!
Without the pressure that deadlines provide, students actually have the time to deeply engage with an even apply the knowledge they’re gaining as they’re going through your course.
That’s very powerful!
5. All Else Being Equal, You Get Paid Quicker
If you sell a course for $100, or you sell access to a membership site for $25 / monthly that retains customers for an average of 4 months, either way you end up with $100 / person.
The only difference is that in the 1st scenario, you get paid that full amount immediately. In the 2nd scenario, you have to wait 4 months to receive that extra money.
Meanwhile, you didn’t have access to those funds to reinvest into your business, improving your products and advertising to bring even more people into your marketing funnel.
There’s a reason most websites offer discounts for annual payments over monthly payments – having that money in advance is very powerful.
The Advantages Of A Membership Model
As mentioned at the start of the is article, there really are pros and cons to both options. Let’s look over the advantages that a membership offer has over one-time sales.
1. Recurring, Predictable Income
This is perhaps the most obvious benefit, and it’s what makes membership websites so appealing.
Once you sign somebody up, it’s very likely that they’ll continue their subscription for more than one month. This is especially true if you’re continuing to release new content throughout their subscription.
Churn is inevitable, and nobody stays signed up forever. However, as time goes on, you’ll have a rough idea on however long you can expect someone to remain signed up for – then takes steps to optimize it.
In an ideal scenario, new subscriptions vastly outpace the rate in which people end their membership, and your monthly recurring income grows steadily over time.
2. There’s Only One Product To Sell
Some may see this as a disadvantage, but I actually see it as a huge benefit. It was this point that caused me to ponder the idea of pursuing a membership model for my courses in the first place.
As your collection of products grows, it can be more difficult to manage the marketing to them. How do you know what product to promote in a given situation? What order should you present your products in? After somebody buys one product, what products do you promote next, and how do you set your marketing funnel up in a way to guide people towards the next sale?
It can be a huge headache.
Every time I release a new course, I not only have to go back and update old content to promote it, I also have to make drastic changes to all of my email marketing automations, create new ones, and change a bunch of other smaller things around.
Because I eventually believe I’ll be releasing 30+ courses (with the help of other experts), I can’t imagine what monstrosity of a system I’ll have to deal with as everything grows.
Membership sites don’t really have this problem. While you still have to change things around to adequately promote your new additions, you’re ultimately still selling access to one core product – your membership site, which contains all your courses inside of it.
3. Membership Sites Tend To Be More Engaging
If you’re trying to build a sense of community, or really engage your audience with your brand, there are advantages to running a membership site vs. selling one-off courses.
If people are going to pay for continued access to something, they’re going to justify that action by returning to your offering more frequently. New content is more likely to be consumed, and it’s easier to build a community of members because of that.
This may make it easier to up-sell additional services (like one-on-one coaching), but not necessarily – this would be something that you’d need to test.
4. You Don’t Need As Much Content To Start
Typically speaking, it’s good practice to raise the price of your membership site as its value rises – at least to new customers.
This also means that you can begin selling access to your membership site straight away, so long as you’re actively adding content to it, and you start your price low.
Then, you can raise it over time as content is released.
Or, you can also set content to be ‘dripped out’ after a certain length of time. For example, you could offer one month’s worth of content when the user signs up, then have the next month’s content done in advance – but not make it available to the member until they’ve been signed up for the 2nd month.
This also makes it possible to create an entire year’s worth of content in advance, making the membership sites a tad bit more passive.
Conclusion
Becomes there are pros and cons to both strategies, it’s up to you to decide which is better for your business, and your life as a whole.
Personally, I chose to publish one-time, digital courses as I feel it provides a better value for students, and gives me more flexibility to run my other companies as well.
At the same time, I still feel like I’m likely to publish a membership site one day – just with different offerings. I truly love the membership business model, and I’m sure a membership site will be one of my offerings in the future.
I’d love to hear more about the products you plan to create going forward, and how either one (or both!) of these will fit in your strategy.
Finally, if you have any questions, please do not hesitate to reach out to me.
To your success,
– James McAllister
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