The Road Map to Starting a Membership Site From Scratch

How to start a membership website

Follow these steps to set up your business’s membership website and start building a loyal customer base.

1. Select a niche.

Choosing the right niche is one of the most important things you can do. The wrong choice can result in a lot of time and money spent chasing a goal that won’t materialize. But the right choice, coupled with solid execution, can catapult you to success almost overnight.

Some niches will limit your growth because they are too small or don’t have enough buyer intent. For example, custom butter sculptures may be an interesting concept and get a lot of attention, but it’s doubtful you could build a large business in that niche. Conversely, personal and business finance is a niche that gets a lot of attention and money.

So how do you settle on a focus that can help your membership site reach your goals? There’s a two-pronged approach:

1. Go deeper into popular niches to find ones with potential.
2. Further evaluate the niches’ potential against certain criteria.

Countless niches are available today, but they’re usually a segment of a larger market. The most common niches are wealth, health, beauty and entertainment.

If you were to create a membership site around health in general, you would be competing with established giants and have no clear focus because the niche is too large. Instead, you could choose a subtopic, such as healthy eating. At this point, you’ve gone one level deep into the major niche, which is a good start.

But then, go a level deeper. Target a specific kind of healthy eating, such as paleo or low-carb diets. Now the niche is getting more defined, and you may be able to build something from that concept. It is even better to go a little deeper or find a unique angle — for example, paleo dieting for busy professionals. Drilling down in this way will help you develop better marketing materials and gain traction more quickly. You can expand the purpose of the website over time.

Shortlist the niche ideas you like, and move on to the next step: further evaluation.

After you’ve shortlisted a few niches and angles, it’s important to do further research. If the niche holds up favorably against the criteria below, you have a solid chance of success. If it doesn’t, you can remove it from the list and move on to the next one. Ask these questions:

• Is there existing competition? Many people who haven’t started a business may discourage you to abandon your business idea because there’s already competition in the space. In reality, competition is a good thing. It means the market is already spending money on products and services in that area. If you don’t find competition, it may be due to a number of factors, such as strict government regulation, a lack of demand or challenging distribution models. When you come up with a new angle, you won’t be competing directly with existing players, so competition is more of a proxy for viability.
• What kinds of existing products are there? A membership site thrives when people sign up to learn from you and interact with each other. It’s important to look at the niches you’re interested in to confirm what kinds of products are already available. How are the products being distributed? Are they all physical products? Is there space for what you’re trying to accomplish?
• Is information being sold? People may say any number of things about an idea or whether they’ll pay for something, but actions speak louder than words. Make sure people are already buying information. It’s the backbone of your membership site, and you’ll develop a large body of content over time. Before you start, be sure it’s what people want.
• Does the market care? To establish and grow a successful membership site, it’s essential to have a core group of true fans. These are the people who will buy your membership, your coaching, your masterminds and everything in between. This is how you build an extremely profitable business. To find out if there’s a passionate user base, visit forums dedicated to your niche. Do people have strong stances on specific topics? (For example, vegans and paleo dieters are often adamant about their way of life.)

2. Create your monetization strategy.

If you want to turn your membership site into a profitable business, you need to create a monetization strategy before you build the site. Start by analyzing your competitors. Ask these questions: 

• What does their membership include?
• Are they selling additional products or services?
• How do they present those offerings?
• How much do they charge? If there are multiple price tiers, how are they structured?
• How large is the community for each competitor?

Most membership sites charge a monthly or annual fee to be part of the community. However, your price point is the biggest driver of how much perceived value you will need to present to your members. Expectations are completely different for $7 a month versus $500 a month. Also, the more you charge, the more susceptible you are to cancellations.

It’s also important to understand the value of an established audience or membership versus a nascent one; someone is more apt to invest in a membership that has a long-standing, active and thriving community with years’ worth of content than in one that is just getting its feet wet.

While you don’t have to make your membership pricing the lowest in the market, which can sometimes backfire, it’s important to understand price sensitivity. Even giving your membership away for a short period and then surveying your audience on how much they would pay per month is a good starting point.

Also think about how you can introduce expansion revenue into your membership site. Essentially, how can you increase the amount each member pays you over time? Each member has financial limitations, depending on their income and needs. Some may have the means to pay you more for additional value (e.g., one-on-one consulting, private group coaching and in-person masterminds), so as your membership starts to mature, find ways to upsell to increase the lifetime value of your customers.

3. Find product-market fit.

If you have conducted your initial research properly, there should be some certainty of product-market fit, which is when there is a proven need for your product or service in your particular marketplace or niche.

The goal is to create a minimum viable product (MVP) so you can go into a marketplace and ask people to pay you for your product or service. For example, if you’re planning a membership site that teaches people how to play the guitar, test the viability of this idea by selling bundles of private video lessons. If you want to build a paid coaching community, do a trial run with a series of group coaching calls, supplemented by a private Facebook group.

Try creating some “flagship” training that helps your target audience overcome their main challenge, which is the primary reason they joined your site. This training, along with some group or private coaching, is a great start to your MVP. From there, you can expand to additional training, workshops, interviews and case studies, all of which provide value and support your flagship training.

4. Create the content engine.

When you’re selecting tools for housing your content, keep it simple. Membership platforms such as FreshMember, Kajabi and WishList Member make it easy to create membership levels, add and change content, and more. Additionally, start a private Facebook group that you can use for your regular interactions with members.

When it’s time to create your actual content, make sure you understand how to organize and structure the membership site, take a look at resources such as LinkedIn Learning and Dummies.com (known for its “For Dummies” books). Both sites allow free previews of their tables of contents on different topics. These are virtual goldmines because these companies invest a lot of time and money in figuring out the best way to teach their topics. You can use their tables of contents as your guide for structuring your own course content.

On these sites, you can also find resources for these important steps:

• Structuring the member area navigation
• Generating content training
• Finding guests or industry experts to contribute
• Determining the pain points and challenges of your audience

Next, consider what type of content you will create and how you will create it. You should never create content just to create it; you must have a specific purpose for it. Whether you are building premium courses, live trainings, downloads, discussion forums or any other type of content, figure out the best medium or format for your content and keep a specific goal or purpose in mind. Aim each piece of content at one topic.

Don’t be afraid to leverage content you have created in the past, including blog posts, whitepapers, webinars, articles and videos. Sometimes, it can be as easy as changing the format of a piece to freshen it up — for example, repurposing a blog post into video or vice versa.

Once you have generated your first 25 to 50 members, allow them to fuel the content you’ll create next. Through frequent surveys, ask them, “What challenges are you facing that we haven’t covered in the program?”

5. Handle payments, subscriptions and churn.

Here’s where the headaches begin. Keeping up with even a few member subscriptions can be mind-boggling. Juggling 100 or 1,000 is all but impossible without help. Who signed up and when? Which rate did they get? Was a discount or coupon involved? When will the next bill be sent? What happens when someone wants to upgrade or downgrade? How do you handle bounced credit card charges? What if the subscriber complains and wants a refund? Subscription billing and subscriber management could take up all your time, leaving little room for working on your offer and serving your customers.

Shopping cart software that can integrate with your favorite payment gateways, such as Stripe or PayPal, makes it easy to accept payments, manage subscriptions and automate the technical side of your business.

As a membership site owner, you don’t want to be worrying about things like creating coupon codes, updating expired payment methods, processing upgrades and downgrades, and adding members to your site. All of these tasks should be done for you automatically so you can focus on your members and business growth.

Your shopping cart software should be able to automatically perform these functions:

• Accept all payment types, like credit cards, PayPal and ACH
• Add a member to the correct membership plan or level (removing them if they request a refund or cancel)
• Add a member to your email marketing tool for future follow-up and communication [Read related article: The Best Email Marketing Services and Survey Software of 2024]
• Create coupons for time-sensitive offers
• Reach out to your customers to update their billing information when payments fail (this is called a dunning sequence)
• Track affiliate partners and pay commissions for referred members
• Monitor the health of your membership with key metrics, like new sign-ups, monthly and annual recurring revenue, and churn
• Handle legal and tax compliance
• Send surveys to customers for feedback and suggestions

It’s important to have software that can handle all of these functions, saving you from paying for costly custom design and development. 

6. Build your followers and brand ambassadors.

Most membership sites are simply drip-fed content, with little or no input from the owner or members. Don’t be like those membership sites. The difference between these sites and successful ones lies in member engagement. Depending on your membership, that could take any of these forms:

• Live seminars or webinars where members can ask questions via chat or phone
• Forums where you post regularly to provide help and support for your members
• A Zoom or Slack channel where you hold “office hours” or similar events
• A private Facebook group where you interact with members
• A Q&A section or forum that allows users to ask questions and gain feedback from subject matter experts
• An annual or quarterly live event

All in all, it’s about communication, engagement and results. Ask questions. Feature big wins from people in your community. Invite members to speak at your live events and webinars. Make them feel part of something special. [Read related article: Why Brand Ambassadors Could Be Your Best Marketing Strategy]

7. Know when to expand.

Do not worry about scaling and growth until you accomplish these tasks:

• Establish product-market fit. If you haven’t established product-market fit yet, you could be creating something that there simply isn’t a demand for. 
• Understand your target audience. If you don’t truly understand your target audience — what challenges they face, what keeps them up at night, what prohibits them from reaching their goals — it’s going to be hard to push your target audience’s hot buttons enough for them to join.
• Achieve low churn. If you have high churn rates, that means customers are canceling. It’s your job to figure out why. Was the price too high? Was your marketing misleading? Was the product not what they anticipated? Was there not enough value in your content? Did they have a poor customer service experience? 
• Maximize customer value. If you are not maximizing customer value, you are missing out on additional revenue and growth opportunities. With a smaller return on investment (ROI), you’ll have less to spend on traffic, customer acquisition and content creation.
• Know your key performance indicators (KPIs): If you don’t know your KPIs, how will you know how much you can spend to acquire a new customer or how much a new customer is worth?  

Until you have mastered these five important aspects, don’t worry about new traffic sources or customer acquisition channels. Focus on providing your members with high-value and edifying content. In short, make people want to be members of your site. 

The benefits of starting a membership site

If you’re wondering whether it’s worth your time and effort to go through these steps, consider these benefits of starting a membership site.

Reliable income stream 

With a membership site, your business can rely on monthly or yearly subscription fees, along with other purchases, as a source of guaranteed income — as long as members don’t cancel. A membership can turn a one-time customer into a repeat customer, without much additional work. 

Business growth

Content creation is beneficial for almost any company because it’s a way to market your business and get your message out. If customers are happy with the membership services and perks you offer, they may refer friends, and with no limit on how many individuals can participate in a membership program, those numbers can continue growing. This kind of referral network is a great way to increase your customer base and build your business while providing useful content and resources for your members. 

Community creation 

A membership site is a great place to form a community of like-minded people, as only those who are truly interested in your niche content would pay for it. By creating a place for people with those same interests, you can establish a community with your business at the center. 

Members can use your site to talk with one another via direct messages, forums or other avenues and use your provided resources to learn more about the topic. In addition, establishing the community allows you to access a marketable and well-curated group of customers who can test out new products and ideas, provide feedback and more. 

Credibility

By creating valuable and informative content for a membership site, you can establish your business as a credible thought leader in its industry. A membership site demonstrates your expertise and proficiency to customers through the content you create, and members can look to the site as an established and expert source where they can go to learn more.

Content monetization

Many businesses are already creating content on social media for free, but with a membership, you can monetize your content and create exclusive members-only perks, leading to a greater ROI.

Sean Peek contributed to this article.