Latest / The Boujee Multipreneur / The Membership Model Makeover: Why Recurring Revenue Is the Future for Service-Based Businesses

Transcript

The Membership Model Makeover: Why Recurring Revenue Is the Future for Service-Based Businesses · The Boujee Multipreneur

• 0:16
  SPEAKER_00: Welcome back to the bougie multipreneur.
• 0:19
  SPEAKER_00: I'm your host, Dr.
• 0:20
  SPEAKER_00: Hillary.
• 0:21
  SPEAKER_00: I have this podcast for driven business owners who want to build wealth, create freedom, and still have that life outside of their business.
• 0:30
  SPEAKER_00: That's me.
• 0:31
  SPEAKER_00: I'm the coach.
• 0:32
  SPEAKER_00: I'm the multipreneur, and I'm kind of bougie.
• 0:34
  SPEAKER_00: I like things in the luxury fields.
• 0:36
  SPEAKER_00: So today we're going to talk about subscription and membership models.
• 0:41
  SPEAKER_00: I've thought of this recently because I have signed up for a couple and I keep seeing it everywhere.
• 0:47
  SPEAKER_00: I'm in Indiana.
• 0:48
  SPEAKER_00: I'm in Caramel.
• 0:50
  SPEAKER_00: Maybe it is just my area.
• 0:52
  SPEAKER_00: Maybe it's everywhere.
• 0:53
  SPEAKER_00: But it seems like from the research I've been doing, it is everywhere and it's in every industry.
• 0:59
  SPEAKER_00: And especially for service-based industries like chiropractic, wellness spas, salons, um, even coaching and event spaces, get these membership models and subscription models going.
• 1:12
  SPEAKER_00: So let's look at some of the research that I've found and see if this is something that we might want to do, right?
• 1:19
  SPEAKER_00: Like, is this something that you would want to do with your business?
• 1:22
  SPEAKER_00: Um, and what the research says.
• 1:24
  SPEAKER_00: But apparently these membership models are everywhere.
• 1:27
  SPEAKER_00: So if you're looking into anything, you'll see Netflix, Amazon, your gym, just the apps that we have in general, meal kits and beauty boxes.
• 1:37
  SPEAKER_00: I could like say yes to all of those that I have memberships, right?
• 1:40
  SPEAKER_00: If I think about it, I don't even know if I could list all the memberships I have.
• 1:44
  SPEAKER_00: But we are in a membership economy because we as consumers, we love it.
• 1:50
  SPEAKER_00: It removes like the decision fatigue of what to get when, and it makes us feel like we are VIP.
• 1:57
  SPEAKER_00: I do love that.
• 1:58
  SPEAKER_00: I, as a bougie multipreneur, I do love feeling like I'm VIP.
• 2:02
  SPEAKER_00: I can't complain.
• 2:03
  SPEAKER_00: Um, our membership is predictable.
• 2:05
  SPEAKER_00: I find that's easy for my brain too.
• 2:08
  SPEAKER_00: And this is the big part is that it lets us think that we are investing in ourselves and it's consistent.
• 2:17
  SPEAKER_00: Like, for instance, a lot of like the gym memberships and sauna memberships that I have.
• 2:21
  SPEAKER_00: Like, I do feel like when I have these memberships, I'm doing really well at investing in myself, right?
• 2:29
  SPEAKER_00: It's not about like the discount for the membership, it's about the consistency of it and the experience that I get.
• 2:36
  SPEAKER_00: And if you are a service-based business like I am with chiropractic, this is gold.
• 2:41
  SPEAKER_00: This is what people want.
• 2:43
  SPEAKER_00: They want the consistency and the experience.
• 2:46
  SPEAKER_00: So let's talk more about the membership models and maybe how we can add it if we don't, right?
• 2:53
  SPEAKER_00: Um, traditional service-based businesses, they have like zero, like their money starts at zero, right?
• 3:02
  SPEAKER_00: Their rent's the same, the payroll's the same, the bills are the same, but the revenue can fluctuate and that sometimes can create anxiety.
• 3:10
  SPEAKER_00: I know that there's certain times and seasons of the year where money and revenue changes, right?
• 3:17
  SPEAKER_00: But memberships can help with that.
• 3:19
  SPEAKER_00: With a recurring revenue of a membership, you could start every month ahead because if it's on the first of every month when these memberships get paid out, you're gonna have a large chunk of money at the beginning of the month.
• 3:32
  SPEAKER_00: It will have less like stress for cash flow on you throughout the month, and it will also help with like your client or your patient's accountability.
• 3:41
  SPEAKER_00: It will um improve like their retention of their care with you.
• 3:45
  SPEAKER_00: Um, and it could help lower your like overall marketing costs because fewer people will fall off because they're already committed to a membership program.
• 3:55
  SPEAKER_00: So, specifically in the chiropractic field, um, we can, you know, let them know about the consistency with chiropractic and not to come in only when it hurts.
• 4:06
  SPEAKER_00: And, you know, let's continue this wellness care plan to keep your body functioning at its best, right?
• 4:11
  SPEAKER_00: So if that is part of your um philosophy and your business, then the membership only makes sense.
• 4:19
  SPEAKER_00: Let's look at some maybe different types of membership models.
• 4:23
  SPEAKER_00: Maybe for um chiropractic, I know, and other service-pace-based individuals, they might have like a maintenance membership.
• 4:31
  SPEAKER_00: So, for instance, chiropractors might do like one to four visits per month.
• 4:35
  SPEAKER_00: Maybe they get a discount if they add on a therapy or they get priority scheduling or a member-only perk.
• 4:42
  SPEAKER_00: I don't know, like a free adjustment on your birthday or a free therapy.
• 4:46
  SPEAKER_00: I don't know.
• 4:47
  SPEAKER_00: But this would be just to keep them maintenance because, again, chiropractors, we love health and wellness.
• 4:54
  SPEAKER_00: Um, there's a credit model for membership, which would be similar to what you would see like at a spa or like a massage therapist or your estheticians, where they might have a number of credits each month and they can use them for different services where it's still flexible, but it's still recurring every month.
• 5:10
  SPEAKER_00: And people would have a choice of what they want to do without the complexity of it.
• 5:15
  SPEAKER_00: Now you can think of theirs also would be like a hybrid bundle where you could do, um, for instance, chiropractic care plus dry needling, plus cupping, or something like that, where you would be adding in a therapy plus your chiropractic adjustment because you could customize it or you could rotate therapies and each month you have a different therapy.
• 5:35
  SPEAKER_00: I don't know, but you could hybrid these bundles too.
• 5:40
  SPEAKER_00: One other great one would be like a VIP, like an annual membership, where it would be a upfront payment for the year.
• 5:46
  SPEAKER_00: So that would be great to start off, you know, your Q1 with a chunk of money, right?
• 5:52
  SPEAKER_00: You're you'd have all that cash flow there.
• 5:54
  SPEAKER_00: It would be a great commitment to your patients or clients because they would be locked in for the year.
• 6:00
  SPEAKER_00: Um, and it would be easy to market like as a gift to give or a new year reset, that type of thing.
• 6:07
  SPEAKER_00: So let's think about what would make the membership successful if and when we did this, right?
• 6:13
  SPEAKER_00: It needs to solve like a real problem.
• 6:15
  SPEAKER_00: So, for instance, chiropractors, the problem might be to keep them well and stay out of pain, manage their stress long term, and just really like optimize their performance.
• 6:26
  SPEAKER_00: Uh, for a different service, care provider might be something, just a consistent self-care.
• 6:30
  SPEAKER_00: Like I think of like my sauna membership or gym or um massage, it might help with their accountability and then improve their results long term.
• 6:40
  SPEAKER_00: I mean, literally for the gym, right?
• 6:42
  SPEAKER_00: The more you go, the better you you do look and feel.
• 6:46
  SPEAKER_00: Um, the membership must be easy for them to understand.
• 6:50
  SPEAKER_00: If you confuse them with the membership and all the little levels, you're gonna lose them.
• 6:56
  SPEAKER_00: I would say like one to two levels is plenty, and that's what the research shows too.
• 7:01
  SPEAKER_00: Like, just sometimes short and simple, right?
• 7:04
  SPEAKER_00: It also needs to be priced correctly.
• 7:07
  SPEAKER_00: So we don't want to discount everything so low that we're actually gonna lose money at the end of the year, but also we don't want to price it so high that we only get like three clients to join up, right?
• 7:19
  SPEAKER_00: So where's the sweet spot?
• 7:21
  SPEAKER_00: Somewhere between this feels worth it and this feels luxurious, right?
• 7:26
  SPEAKER_00: It's not something that every single person is maybe gonna sign up for because um of the price point.
• 7:33
  SPEAKER_00: But for the membership experience, we as like the business owners need to remember that um it's not just like they pay monthly and they come in.
• 7:43
  SPEAKER_00: We need to make sure that we have like a member-only event or surprise gifts for them, uh, priority access to scheduling.
• 7:50
  SPEAKER_00: Um, and then they might be identified as something different, like, oh, you're one of our wellness members, you also get this perk today, where they get like a sense of belonging because they're in the membership.
• 8:02
  SPEAKER_00: That we need to remember that like people don't like join products, they join communities.
• 8:08
  SPEAKER_00: And so make sure when you're creating this membership experience, you are creating and putting into this community.
• 8:16
  SPEAKER_00: Some of the things that you and I might have like thought of like, oh, I don't know, I'm not a gym, I'm not like I can't do a membership, I'm not a gym, or you there might be like a negative connotation in your mind.
• 8:28
  SPEAKER_00: You can do memberships.
• 8:29
  SPEAKER_00: Um, if you are a service business, people do return for care, and that's why memberships exist.
• 8:38
  SPEAKER_00: Another um fear might be well, what if people abuse it, right?
• 8:42
  SPEAKER_00: Um, you have to set the clear boundaries, um, clear usage rules, and good commune communication.
• 8:50
  SPEAKER_00: And this might include, you know, having an attorney drop a contract that they sign so they know exactly what they're getting and legally exactly what they can do.
• 8:59
  SPEAKER_00: Um, what if no one signs up, right?
• 9:02
  SPEAKER_00: Um, I've this has literally happened to me.
• 9:05
  SPEAKER_00: I created what I thought was this great package, and I think I was, well, I know for certain I was on the edge of over luxurious because I had so much in this package.
• 9:14
  SPEAKER_00: It was pricey, but a lot of my patients were paying so close to it already per month that I just added more and you know, I had this price planned out.
• 9:25
  SPEAKER_00: No one joined.
• 9:26
  SPEAKER_00: So, lesson learned, right?
• 9:28
  SPEAKER_00: And this was a couple years ago.
• 9:30
  SPEAKER_00: There's a lot more research out there now.
• 9:32
  SPEAKER_00: Um, if you know, you don't need a hundred members to join.
• 9:36
  SPEAKER_00: Like, what if you just had like 20 members for your membership at$149 a month, and now you've got close to$3,000 extra every month before you even open the door.
• 9:48
  SPEAKER_00: Like that's on the first of the month.
• 9:50
  SPEAKER_00: So the memberships could um be scalable like very quietly and steadily until like you have 20, 40, 60, 100 members signing up every month.
• 10:02
  SPEAKER_00: So when you are ready to launch your membership in your business, I would suggest picking one membership offer.
• 10:10
  SPEAKER_00: Um, remember, if you over you have all these separate offers and you've got these six ideas, like it's a lot.
• 10:17
  SPEAKER_00: I know personally I feel that way too.
• 10:18
  SPEAKER_00: I love when it's just like one or two offer, and I'll be like, I'll pick A, done.
• 10:23
  SPEAKER_00: Um, but maybe have a members-only perk, even if it's something simple like a priority scheduling.
• 10:29
  SPEAKER_00: Um, train your staff how to use it and how to explain the membership.
• 10:34
  SPEAKER_00: And then you could run like a two-week, like a VIP, like founders' launch where you could do a party or an event.
• 10:41
  SPEAKER_00: You could celebrate them in some way.
• 10:42
  SPEAKER_00: Um, and then, you know, even celebrate the members um publicly if they'll let you put on social media, like your founding members, and then um make it part of your onboarding to new clients to opt in for this membership.
• 10:56
  SPEAKER_00: So it's not about locking them in.
• 10:59
  SPEAKER_00: Um, it's about giving your best clients an easier way to stay committed to you.
• 11:05
  SPEAKER_00: So again, if you are a service-based business owner like myself, you know, I've got two chiropractic clinics and you are looking for some stability, some scalability, and to sustain, right?
• 11:17
  SPEAKER_00: Because the memberships, the monthly payments that could get auto-deposited into your account on the first of the month would be great for your revenue.
• 11:26
  SPEAKER_00: Um, you could stop chasing the end of the month to make up for your overhead.
• 11:30
  SPEAKER_00: And you could just create some freedom inside the business instead of running like a hamster wheel every month, right?
• 11:38
  SPEAKER_00: So thanks for listening to the bougie multipreneur.
• 11:41
  SPEAKER_00: I'd love to know if this episode sparked some ideas for you.
• 11:45
  SPEAKER_00: Send me a message or something.
• 11:46
  SPEAKER_00: I'd love to hear how your membership is working.
• 11:49
  SPEAKER_00: We've all tried and we failed.
• 11:51
  SPEAKER_00: It doesn't mean we can't keep trying, right?
• 11:53
  SPEAKER_00: Whether it's for chiropractic or coaching or another service business, um, feel free to reach out.
• 11:59
  SPEAKER_00: I have love helping business owners.
• 12:01
  SPEAKER_00: I do coaching um with hjconsulting.com.
• 12:05
  SPEAKER_00: So until next time, stay bougie and be a money magnet.