Thursday, 5 July 2012

Coming Back for More - the Importance of Recurring Income

If you've been interested in internet marketing for any length of time,  you'll be familiar with the concept of back-end products - the idea that you start off by selling new customers something inexpensive in the hope that they will become loyal to you and buy more and more expensive products as time goes on.  Because, as the gurus are always quick to point out, you're never going to make a fortune from selling just one-off products at $29 each.  This is one reason, of course, why it's important to choose your products wisely (and, if you're an affiliate, to check them out for yourself before trying to sell them).  A dissatisfied customer who thought that the $29 product was poor value will not go on to buy a $97 product from the same seller.

Of course, no matter how good your products, there will be some customers who'll only buy once - for whatever reason.  Maybe the first product worked so well they've decided they don't need anything else.  Or perhaps they've lost interest in the subject.  Or it could just be that they don't have the money to spare.  So, while it should be possible to continue to get further orders from a list of customers to whom you've sold good value stuff, there are also other sources of recurring income that are worth considering.

The first of these is the newsletter - produced either online or published in the traditional way and sent through the mail.  They seem to work best in the fields, such as investment, where things are constantly changing and where people are looking for easy ways to keep up to date.  How much is charged for a newsletter varies from publisher to publisher.  Some on the subject of internet marketing cost $47 or even $97 a month, so the opportunity for making a good income is high.  However, unless you, personally, have all the necessary information at your fingertips and have the time and dedication to write about it for a monthly deadline, producing a newsletter entails the recruitment of experts and writers, who would need to be paid.

A less time-consuming (at least in the long run) and more cost-effective way to achieve a recurring income is to produce a training course of some sort.  Internet gurus are fond of pointing out that, while people may balk at paying $50 for a book which will teach them a new skill, they will often be happy to pay $20 a month for a course which is, in effect, that book broken down into bite-sized chunks.  Maybe it’s because it makes the information more accessible or because they feel that it’s more interactive but it certainly seems that, if you have the knowledge, it’s much better to write a course than a book. 

But better than either of these, to my way of thinking, is the membership site.  Certainly it will take some time to set up, and you need to invest in the appropriate software but it could end up running itself on all but the technical side.  I’m thinking here of a site that I belong to.  It was originally set up in 2002 by a woman in Australia, who wanted to talk about a subject that she was particularly interested in.  Over the past ten years it has grown steadily and now has 27,500 members.  Admittedly, not all of these are subscribers but, since the best parts of the site can only be accessed by those who have taken out a subscription, many of the twenty seven and a half thousand will be paying the $20 or so a year that it costs to join. 

There are three things that I consider to be very clever about this site.  First, the subscription is low and therefore affordable for most people.  Secondly, quite a bit of the site is accessible to non-paying members who grow to enjoy it and then want to see what it is that they’re missing on the rest of the site.  And thirdly, there’s a forum where members can discuss things related to the topic of the site - and, in the ‘chat’ section, anything else that they want to.  This has resulted in many people becoming friends (and, yes, I have met up with quite a few face to face in the seven years that I’ve been a member) and so engenders a loyalty to the site.  And, since the forum is now the focal point of the site (with, at the time of writing, over 150,000 threads and just under three million posts) it is the members themselves, rather than the site owner, who create the content.  Now, I’m not saying that any of this was planned by the site owner at the outset, but if you’re looking for a source of recurring income and you’re interested in a particular subject or hobby, this membership site could provide a worthy model to copy.

No comments:

Post a Comment