Memberships are often positioned as the ultimate recurring revenue solution, but what most people don’t realize is how long it actually takes to replace existing income. In this episode, I break down why memberships are not a quick win, how to think about revenue projections, and what’s really happening in those early months after you launch. I walk through the innovation adoption curve, why only a small percentage of your audience joins at first, and how to use your early members to build momentum toward sustainable growth.

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Today I want to talk about everybody's favorite topic when it comes to memberships, which is the recurring revenue aspect and why people often launch memberships because it is such a smart, sustainable, strategic move in a business to create that baseline recurring revenue that compounds over time.

But a lot of times people launch memberships with the intention for a membership to replace other revenue in their business.

So for example, I was working with a client who wanted to replace services.

So they are running one to one services and potentially, you know, in this example they have like coaching programs and they're doing a lot of like one to one stuff and they want to cut that out and just have their membership because they know that they love working with groups, they want to serve people longer.

Uh, the transformation that they're serving takes six months or more, sometimes over a year.

And so a membership is a great model for this.

But the problem is that oftentimes when we want to replace a service revenue in our business, either either one to one services that are pretty high ticket or we want to replace program like high ticket program revenue with an ongoing membership, this doesn't happen overnight.

And so I get a lot of like my membership, I launched this membership because I want to replace my one to one income.

But it hasn't happened yet.

This is a common program problem.

And what, so I want to talk about this.

Like when somebody launches a membership, there's a lot of factors that go into how we project revenue around what this model is going to look like.

And the reality is that memberships aren't really a quick win, they are a long term strategic move for sure because we're getting that compounding recurring revenue over time and we can continue to grow that.

But it's not something that usually like out the gate replaces a lot of revenue.

When our clients do strategies with us, which is always like the first step for, you know, any kind of like new membership strategy we're doing, we put together these financial projections.

So we talk about pricing, we talk about revenue goals, we talk about, you know, like okay, what kind of money are you looking to replace in your business?

Or what kind of revenue stream are you trying to add?

What's your revenue goal here?

How big is your audience?

There's all these factors that go into pricing.

So then we run the numbers, like what does this actually look like?

Okay, if you have this many X number, number of founding members and then new members every month and a percentage of churn and all of this factors in.

And then we do this projection to show like here's what your revenue could actually look like.

Does this excite you?

Does this work?

Do we, what do we need to tweak?

What levers do we need to pull to change this?

Because obviously you could increase price, you might have less members.

Like there's lots of levers to play with.

Usually they're hitting their revenue goal in months, like 8 to 12.

Okay.

So it's not like it takes years and years.

I mean, depending how big your goal is.

But it, it isn't something that usually happens in month one.

So why is that?

Right?

Like that's what I want to get into today.

So the members that join first, when you launch a new membership, this is a completely new offer.

It's an ongoing product.

Think about it like it's a little bit different than a program or other things.

It's like a new product in the market that is now exists and is an ongoing thing.

We, we see this with like e commerce brands.

Like there's a new product in the market, we kind of want to see how it does in the market.

Think about like every time Apple releases new offers.

So your founding members, your people that join in the beginning, these are your early adopters.

You may have heard of the Rogers innovation adoption curve before.

So what the curve looks like is like basically like it's low in the beginning and it goes high in the middle and then down in the end.

And I'll probably put this graphic on my social media so you can go stalk me and find it.

But you've probably heard of this innovation curve before where the early adopters are essentially like 15% of your most hungry audience that are going to be excited to join when you first launch.

So you're not going to get all your people in the very beginning.

And even I experienced this just launching my membership for membership builders for like our past clients and our current clients.

Like I had this list of people that I was like, for sure these people are going to join.

And like 10 of them didn't.

And they, they didn't say, no thanks.

They said, I'm really excited about this, I'm going to join later.

Right?

And so of course we can talk about marketing strategy and creating more urgency and whatever, but the reality is that product adoption is not 100% in the beginning.

So you can expect 15% may join for your founding member launch.

So the next sort of stage after that is what's called the early and late majority.

So, so this means that the majority of people are gonna join after that period after your, after your initial Launch.

After that first 15% come in and they get to test the waters and find out if it works or not.

So each of these next stages is roughly like 34%.

So your early or your early majority and your late majority are each 34%.

So 68% of your members that are going to join, come in a little bit later.

Okay, so let's take a step back.

We know that 15% are going to join in the beginning and that 68% are really the next.

34% Are watching for what happens to decide if they want to join.

So that means your best chance of experiencing the peak of that innovation adoption curve and getting the majority of the people in that you expect to join is that you need these early adopters to be raving about the product.

They need to say like, this is an incredible experience.

They need to be talking about it online.

And what that means is that you need to have creative this like amazing beta experience.

You need your, you know, flywheels going where they're sharing online.

You need easy ways for them to talk about the membership, to invite their friends into the membership to give you feedback.

Because you have to pour all your energy into improving this product and making it incredible using your, you know, co creating it with this early adopter group so that then we actually make it to the next stages of the curve.

Because if you don't have that, if your early people aren't ecstatic, then it's going to be a lot harder to get more people in the door.

And this is usually why memberships flop.

Okay, so what does this actually look like and how can we actually be successful here?

So the first thing I want you to know is that the sooner you get out your product, the sooner you can learn, the sooner you can get feedback and the sooner you can make it to that like 68% of your people joining and you're hitting your revenue goal a lot faster.

In order to get there, you need to design an incredible beta experience, which means we need to understand who we're serving.

We want to set a clear revenue goal, we want to set a member goal, we want to understand what they need, we want to design this incredible experience and we want to serve them really, really well.

So a membership product is not necessarily a quick win product.

It's not something that is going to be a success overnight in the way that any valuable long term product is in the market.

Membership revenue is a long term strategic move and that means you need a solid strategy to get it started and to get it going.

So that you can really experience the peak of adoption in that first and second year.

So if you're interested in getting our support with creating your membership strategy, if you've been thinking about launching one, or if you're in those early stages and it's not quite working and you need help kind of like fumbling through it and getting it to that next level, then book a discovery call with my team.

It's absolutely free.

The link is in the show notes.

We would love to talk to you about about what you're thinking about building and give you some ideas and direction and talk about what a strategy face looks like with us.

Okay, thanks so much.

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