Residual Income Through Membership Sites
Just a few short years ago, most of millionaire mentors were teaching some variation of real estate investment. Other mentors were recommending investments that promised very high returns, which typically meant they were high-risk investments.
In either case, the idea was that you would do all the work or investing up front and that you would be able to get periodic residual income from that investment, whether it was rental income or dividends.
Residual income is the secret of multi-million dollar incomes. Fortunes are made when you are able to separate the number of hours you work from the income you produce. Ever since the industrial age, people seem to study to become employees. We tell our children, go to college and get a good job. We never seem to think of our children as capable of starting their own industries because of the prevalent way of thinking in our society.
Great incomes dont come as wages for hourly labor; they come from ideas and technologies that break that mold.
Of course, there are CEOs that may receive millionaire salaries, but Im sure they are not filling out timesheets every week. Just like athletes and actors, they get paid from the impact the company, the team, or the movie has on society.
Selling Products vs. Selling Memberships
If you walk into a bookstore and go to the magazine section, it would be rare not to find on the floor, next to the magazines, the subscription inserts that come in all these periodicals. They make it easy to go from buying a product, the magazine, to buying a membership, the subscription. Magazines and newspapers know that a membership or subscription means residual income that they can rely on month after month. If you ever try to call a newspaper to cancel a subscription, the operator will transfer you to a department called Retention, where they will do all they can to resolve whatever problem you may have had to keep you as a customer. However, nobody is standing next to a magazine or newspaper rack trying to sell you the latest issue. The time of town criers is gone.
Selling one product at a time can be compared to being paid an hourly rate. Selling membership begins to break that relationship and to free you from the hours-for-dollars routine.
How Residual Is Membership Income?
If you buy home insurance from a company, it is very likely that you will keep that insurance for a long time, particularly if the payments are made as part of your mortgage payment.
The same may be true of health insurance, except that we change jobs more often than we change residences and the health insurance usually comes with the job.
Car insurance, on the other hand, is more under our control, and people are more likely to change carriers just because they saw a commercial with a cute lizard on the television.
Membership sites online are very much under our control and they usually are reflected monthly or yearly on our credit card statements. People are more likely to cancel their memberships.
I once tried to cancel a membership and was surprised when my mentor contacted me to do a bit of retention work, as the newspapers may do, he offered me a discount to stay in the program and I kept the membership for an additional year.
However, in the internet marketing niche, it is said that memberships typically last three months on average. That is not very good. It is equivalent to selling a shrink-wrapped package of three magazines at the newsstand.
The best cure for bad retention is great content. Dont insult your readers intelligence just because you want residual income. Give your readers true value. Give them great content.
I have been a member of Lynda.com for I dont know how many years and I dont plan to drop that membership anytime soon. Lynda will be receiving residual income from me for many more years to come.
Chris Farrell Membership Residual Income Ideas
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Creating a membership site is relatively simple. You install software that protects the content and processes the membership payments. As with everything else, you just worry about content and marketing.
Whether you create your own or promote other's continuity program, you can profit from recurring commissions and pasive income.