Many people measure the success of their membership according to vanity metrics…
They focus on the amount of followers they have rather than the level of engagement they generate…
Turnover rather than net profit…
And the number of members they have as opposed to how many members they retain in the long-term…
So to many, success is defined by attaining those big numbers…
But is this how you should measure the success of your membership?
And should you be aiming to build a BIG membership or it is ok to create a smaller more intimate community of highly engaged members?
In other words, how big does your membership need to be in order to be considered successful?
Let’s explore this in more detail…
First, understand that it’s contextual
Every business owner out there can attest to the fact that they’ve been told once…
Or a couple of thousands of times…
What being a successful business owner looks like…
But what does that actually mean?
It’s important to begin by establishing that success is a relative thing that varies from one person to the other based on personal goals…
If your idea of ultimate success is running an intimate membership of 100 people, having enough income to pay your bills, and taking a vacation every now and then, that’s valid.
It’s also alright to strive for more members and more income, as long as that’s what you truly want…
And that’s paramount – You need to follow your own journey, not do what others tell you to do to become their version of successful.
Think about it this way…
It’ll be a lot harder to work 23 hours a day….
Miss out on time with friends and family…
And juggle monumental amounts of work if you’re simply doing it because someone else said that is what will make you successful.
When you consider your membership successful…
It needs to be an innate desire…
And once it is, you’ll have more fuel in your tank as you power through.
Bottom line: success is not measured by the size of your goal and there is no right answer to this…
It all really comes down to what type of membership you want to run, what your goals are, and what success means to you.
So how big does your membership need to be, to become the type of membership you want to run?
Before you answer this question, you need to scale through a few more.
First, what’s more important to you?
- A high number of members
- A higher lifetime value of those members
- A high profit margin
- Or is it a lifestyle?
While the list goes on, knowing which of these lies at the core of your definition of success will help determine what drives you…
But, then again, that’s just the starting point.
For instance, if you’re driven by numbers and money, it’s important to consider whether you’d rather have 1,000 members with a lifetime value of $100 each…
Or 100 members with a lifetime value of $1,000 each…
The money in the bank is the same…
But what if the profit margin in both of those scenarios was only 50% because you had to spend money on ads or other things?
In that case, would you rather have more members versus fewer with a lower cost and the same income?
These are key questions to keep in mind…
But, again, there is no right answer…
It depends on your personal goals and vision for your business.
Let’s imagine that you’ve settled on having 1,000 members with a lifetime value of $100 each.
The next pertinent question to ask yourself is, how do your quantitative goals relate to those figures?
Even more, do they overlap seamlessly with your qualitative goals?
No doubt, if you’re gunning for more members, then that involves a lot more work to deliver value and keep your retention rate stable.
So, are you willing to trade a few hours of Netflix for a measure of increased profit or high subscription rates?
These are all things that you need to think about…
It’s important that you don’t allow others to determine what your measure of success should be.
How many members do you need to have to hit financial goals?
Typically, the bigger your membership gets, the less scope there is for really ramping up that average lifetime value.
Why?
Well, because you end up tied up in serving your core member base…
And in doing so, the marketing necessary to get that kind of growth will feed into the time for things like developing upsells or improving engagement and retention.
However, with a smaller member base, you end up with something a little bit more intimate and exclusive.
And guess what?
There’s value in exclusivity.
This allows you certain luxuries such as:
- Potentially charging a little more as experts want access
- Being more attentive to a higher proportion of your members
- Putting a higher price tag on increased accessibility
- (In some cases) not needing to do as much to deliver sufficient value
However, the same way bigger isn’t always better, smaller isn’t always the best either…
Try not to limit yourself all in the name of exclusivity.
If you’ve followed us for a while, you’ll have heard us mention Kevin Kelly’s notion of ‘1,000 True Fans’…
This states that it only takes 1,000 highly engaged fans to buy what you offer and help you to become successful…
And is an ethos we follow in our own business…
Whether it’s more members spending less or fewer members spending more, both paths are entirely valid if you’re largely driven by the financial side of things.
Final verdict: It’s entirely up to you
Whether you end up pursuing higher subscription rates in order to hit your goals…
Or focusing more on increasing your customer lifetime value…
It’s entirely up to you!
While you can’t downgrade the value of advice and general pointers to success, it all starts with what YOU want for YOUR business.
So, feel free to temper the ambitiousness of your goals to better serve the lifestyle you want, temper the number of members…
Or pull back on income expectations so you can work less…
As long as that’s what you want to do.
Remember, these are your shoes and no one else knows what it feels like to walk in them but you.
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