Which One Should You launch First: A One-Time Product or A Recurring Subscription?
If you have never launched a web site before or sold anything online, especially digital products, then I would NOT recommend starting with a subscription-based product right out of the gate. And on top of that, you should DEFINITELY not start with a high-ticket 1,000 dollar product. In the beginning, you will not have the copywriting skills, the marketing skills, the positioning skills, or the product development skills, or the ability to recruit JV's and affiliates, or the savvy to put it all together. No matter what kind of a superstar you've been in your day job, you simply won't have those skills when you are first starting out with your own membership site.
Let me quickly touch upon the 3 basic monetization models. I call these DIY, DWY and DFY. DIY stands for Do it yourself, DWY stands for Done With You, and DFY stands for Done For You.
DIY is the very basic level which is the basic fully automated online course where everything is delivered digitally. This is similar to the 1-site license we offer at DigitalAccessPass.com (DAP). Where the person who downloads the software can watch documentation videos and read how-to setup documentation and set up their web site themselves. Of course, we offer a lot of ticket-based support, but they don't get any 1-on-1 calls with us.
DWY - Done with you - is slightly more advanced where you do things WITH them - again, to give you an example of what we do ourselves, we set up our users' membership site by working alongside our Platinum users. We do it on a live 1-on-1 call. Either myself or my wife Veena Prashanth - we will get on a call with you and ask you what you want to accomplish, what kind of content, what kind of products you wish to sell, and we tailor the set up of DigitalAccessPass - DAP - to fit your specific needs. There is simply no other program that is better than the 1-on-1 coaching and consulting we offer. So that includes the software and the 1-on-1 setup and training. That's your classic DWY - Done With You. You can charge more for DWY compared to DIY.
And then there's the top-most tier - at least, it is top-most in most niches. Which is DFY - Done For You. We don't offer a Done-for-you option in our business at this time. In this model, the client does not want to do it themselves, they don't also want you to do it WITH them. They just want YOU to do it for them and tell them it's done.
So at the lower end of Done-For-You are SEO services, marketing funnel set up, setup of big CRM's like Infusionsoft, traffic generation, Facebook campaign set up, etc - they all fall under this umbrella of DFY. Now, to this same tier, if you add 1-on-1 coaching and consulting, where you work with your clients first, find out their needs, customize the solution specifically for their needs, and THEN ALSO offer the backend services to get it done FOR them, that's probably where you can charge the most.
So back to Keith. You said you are already selling a $1000 product upfront, followed by a monthly fee. That is absolutely a great model to follow. If you are already successfully selling a high-ticket item, then there's definitely no need to swap that out for continuity. What you are doing is already the best of both worlds - a big upfront payment, followed by continuity.
This is the DFY tier I was talking about earlier. So if you were doing marketing consulting, then the big upfront fee - whether it is $1,000 or $5,000 or $10,000 - all of that goes towards, say, your initial coaching and consulting where you work with clients 1-on-1, figure out their requirements, analyze their business, find areas for improvement, come up with a plan to optimize their funnel, get more traffic, get more leads, improve conversion, and so on. And that's what the initial 1000 or 5000 could be for.
Once that initial part is done, you could present them with a fantastic project report that summarizes all of the work done so far and tells them what they need to do next in order to get to where they want to be. And that's where your add-on services could come in, and you say, Hey Ravi, I have a team that can take all this stuff off your hands. And now here's 3 different tiers you could come in at for these services.
And that would be your continuity tier, where you create 3-tiers - say, Silver, Gold and Platinum, with each tier offering more benefits than the other, and that could include not just your team's time, but also your own ongoing consulting and review of the business roadmap.
Now, most importantly, remember this: Even if you launched a 100 dollar month program directly, your member would have to stay for 10 FULL months before you can earn that same 1,000 dollars from them. So 10 months of fees - if they don't cancel, if their credit card continues to work - if you keep delivering, if they don't lose focus - 10 full months of all that, at 100 dollars a month, would earn you 1000 dollars. BUT... if you are ALREADY charging that 1000 upfront, then your subscriber's lifetime customer value goes way way WAY up, because they are STARTING with a payment of 1000 dollars. And after that, all of the continuity payment you get from them is pure gravy.
Now, another thing we tend to forget, is that a 1,000 dollar customer's mindset is going to be WAY different, in a good way of course, it's going to be WAY better compared to a 100 dollars a month client. No offense to anyone paying less. That's just how it is for the most part. Who would you rather serve? The person buying at the dollar store? Or the person buying at Walmart? Or the person shopping at an expensive jewelry store? See what I mean? The more expensive your product is, and the more they pay you, the more fun they usually are to work with, they require less hand-holding, need less support, will bother you less, will praise you more, and will refer more clients to you. Weird, but true! I didn't make that one up, ok?
That means that if someone paid you 1000 dollars to begin with?? then the chances are very high that they will continue with your 100 dollar a month continuity afterwards. Because if they could afford to pay you that much upfront, then they definitely value their time... and what you are offering them in return. And they will not have a problem paying a small percentage of that to keep getting that value from you.
Now, if you - Keith - had said you're not converting enough people to your 1000 dollar program, and because they don't get in, they're not even getting to the point of continuity, then that's an entirely different issue altogether. I'm going to talk about that in a different episode, because this topic is way too important to be left unfinished.
Anyway, for now, the quick summary for you, Keith, is this: You are already selling the perfect hybrid model. Get a big chunk upfront, followed by continuity. This is probably THE BEST monetization model there is as far as continuty goes. Because the standard stick rate for the average membership is like between 3-6 months. That's like a very generalized number of course. But if you're getting lock in from them to the equivalent of 10 months upfront, and then add to that the mindset advantage you have with such customers paying for high-ticket items, then you now have the best kind of membership site there is.
Big Chunk Upfront - Plus Backend Continuity - Membership Thy Shall Maketh Successful, like Yoda would say.
All this and more in today's episode #14. Show notes available at http://SubscribeMe.fm/14/