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Continuity Programs – Getting Started OnLine – Part 8

membershipcard.jpgPerhaps the “best” way to make money online – or offline for that matter – is to develop some sort on “continuity” program, where a recurring fee is charged to allow customers to continue to use that service.

The first example of this you would have already met online is your ISP (Internet Service Provider) who charges you every month so you can access the internet. And if you’re also in business online, you’ll need a web host, most of whom also charge by the month, and domain name (renewed yearly).

In both cases, these are something you just can’t do without if you want to be online!

So the concept of continuity programs is quite simple.

  • Find a product someone just can’t live without,
  • Sell it to them once,
  • And then keep taking their money at regular intervals.
Remember, the first sale to ANY customer is the hardest one to make.

But once the customer has made the decision to purchase, they will usually be quite happy to continue making additional “payments”, as long as the product continues to live up to (or exceed) their expectations!

In most businesses, much of the effort goes into attracting potential customers, and then converting them into paying customers!

If your business relies on “one-off” sales, you expend effort to attract a customer for the first sale… and THEN have to put in even MORE effort to attract new customers to REPLACE them the following month.

Let’s say you are selling a $15 ebook and are lucky enough to attract 50 paying customers every month…

Every month, you’ll make $750 ($15×50) worth of gross sales.

And that’s worth a grand total of $9000 in a year ($750×12).

But if you use a continuity model you’ll see the SAME effort is rewarded many times over, when each customer automatically “buys” again at the start of every month.

Now, one single buying decision results in multiple transactions.

Let’s use the same figures again… Again 50 sales a month at $15 a sale, only this time it’s recurring income, every month.

Mth 1: 50 new sales = $750 = TOTAL income this month = $750
Mth 2: 50 new sales = $750 + $750 from renewals = $1500
Mth 3: 50 new sales = $750 + $1500 from renewals = $2250
Mth 4: 50 new sales = $750 + $2250 from renewals = $3000
Mth 5: 50 new sales = $750 + $3000 from renewals = $3750
Mth 6: 50 new sales = $750 + $3750 from renewals = $4500
Mth 7: 50 new sales = $750 + $4500 from renewals = $5250
Mth 8: 50 new sales = $750 + $5250 from renewals = $6000
Mth 9: 50 new sales = $750 + $6000 from renewals = $6750
Mth 10: 50 new sales = $750 + $6750 from renewals = $7500
Mth 11: 50 new sales = $750 + $7500 from renewals = $8250
Mth 12: 50 new sales = $750 + $8250 from renewals = $9000

Now you have a yearly income of $58,500 from the continuity model, from the same number of “customers” over the year!

Granted, some people will leave and need to be replaced. You might also not be lucky enough to round up 50 new victims – sorry, customers 🙂 – every month…

But you should get the picture! Even with only 25 sales every month… the figures still look half decent! I know I’d love to be pulling in $4500 a month after 12 months from just one site!

The “problem” with continuity or membership programs?

First up, deciding WHAT to offer which is WORTH the recurring fee you want to charge, and then finding people who are prepared to pay it.

I’ve agonized over this quite often for several web sites that I operate, discovering that often there isn’t a useful membership model I can implement on those sites, now matter how hard I think it through.

So if you have difficulty coming up with substance for your model in the first place, think of what then happens in month 2… and month 3… etc.

And this is where most programs come “unstuck”…

By not CONTINUING to provide the same (or better) service every month… month after month after month.

In the info-products field, that means coming up with new, high quality and useful content every month!

In the service field, it means supplying the service (eg web hosting) without interruption or downtime, and possibly enhancing the service to encourage existing customers to stay longer and even more new ones to come on board.

Finally, don’t assume that because your customer is now a “member” that they will remain loyal to your service. I think of the thousands of people that “churn” from one ISP to another every month, thinking they’ll get a better deal or better service with a new one. Or transfer on a whim following a recommendation from a friend.

You have to work on that loyalty!

Essentially that means providing your members with responsive customer support, and also communicating regularly with them – to remind them that you still exist; to tell them how to best use your service; to inform them of improvements; to get feedback on areas for improvement – so they get to know you as a “friend” and trust your recommendations.

So when you are planning on how best to monetize your online presence, consider the “effort” involved in chasing “new” customers all the time for “one-off” sales to only earn an income around only one sixth of what you could earn with a simple continuity program (as in the example above)…

Consider carefully, and those “problems” should be very easy to overcome.

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