#154 Why Memberships Don't Sell Out On Launch Day
There's a conversation I've had 3x in the past couple of weeks with strategy clients... they say something like, "I want to replace my 1:1 client work revenue with membership revenue".
This can make a lot of sense! If you love working with groups, want to support your clients for the long-term, have a framework your clients can work through, and are a natural community-builder, a membership can work great for you.
Of course, there's lots of factors I'd want to discuss before making this decision, but I'm a big fan of the membership model (obviously).
But something we don't talk about enough is that membership revenue is a long term strategic move. It's not something that is going to be a success overnight (in the majority of cases). And yet most founders launch expecting it to replace their income right away.
You've probably heard of the Innovation Adoption Curve. It shows how quickly consumers buy new offers or products. The easiest example to visualize is that when Apple releases a new product, not everyone buys on day one. But we all know that one guy in our lives that gets the new Apple drop every year on the day it comes out, right?
Rogers’ Innovation Adoption Curve (in purple ofc)
Your membership works the same way. It's a new product in the market, and people need time to decide if they trust it.
Your founding members are your innovators and early adopters. They’re roughly 15% of your most hungry audience. They're excited to jump in before there's proof. But the other 85% aren’t saying no. They’re saying “not right now.”
The next 68%, your early and late majority, are watching to see what happens after you launch.
They want to know if your early adopters are raving about it. They need to see people talking about it before they commit.
That means your best chance of hitting the peak of that curve is pouring all your energy into making the beta experience incredible.
Co-create with your founding members. Make it easy for them to talk about it, share it, invite people in. They are your flywheel.
When we create membership strategies with clients and build out the financial projections, most of them are hitting their revenue goal somewhere between 8 and 12 months.
So if you aren’t hitting your revenue goal on launch day, don’t panic. You’re just not at that part of the curve yet.
Pricing Projection Example
Let's take a look at a pricing projection for one of our clients. His goal is 20k/month revenue for his membership, but in our projections we don't hit that during the launch year.
Assumptions for the projection
June (Launch Month)
50 Founding Members @ $47/mo
10 VIP Members @ $500/mo
Starting July
25 new Tier 1 members per month @ $77
15% monthly churn on total active Tier 1 members
Churn applies equally across all Tier 1 members
Founding members remain at $47
VIP Tier
10 members @ $500/mo
This screenshot is a pricing table in our client's strategy doc based on the above assumptions
We create these projections so we can have a discussion with our clients about what's possible. And we work backwards to make a plan to reach our revenue goals. There's always levers to pull –
Inclusions & value adjustment
Higher tiers that have added service
Launch strategy (lots of subcategories here, of course)
My biggest problem with memberships is that people give up too fast, but if you can create an incredible experience that drives growth, it is one of the most sustainable & rewarding business models out there.
If you're interested in a strategy from us, whether you're launching or scaling, and want to figure out pricing projections, book a free call here. We only have two strategy spots left in May.
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