S9E1 | memberships and recurring revenue models
Sandra discusses memberships and recurring revenue models, and how various businesses have embraced these strategies to create predictable income streams.
“Another reason why recurring revenue is just so fantastic is it lets you predict how much is going to come in, and you’re still making money whether you’re on the beach in the Maldives or grocery shopping in your town. There’s money coming in.”
It’s the start of a brand new podcast season, and we’re rebranding our name to the Membership, Launches, and Community Podcast. In this season, we’re going to dive into the fascinating world of memberships and recurring revenue models.
We’ll be exploring how businesses across various industries have embraced these strategies to create sustainable, predictable income streams from subscription-based services, to loyalty programs, to everything in between, and we’ll uncover the secrets to building a successful recurring revenue model.
In this episode, we’re talking about the power of recurring revenue. Wouldn’t it be fantastic if you knew how much would be coming to you each month? It would make it so much easier to grow your team by hiring someone to help you with a certain aspect of your business, because you know how much is coming in.
Or, you could spend that money on education, so you can learn more about a certain strategy or tool that’s come out. Maybe you want to hire a coach to get you to that next level in your business. Knowing how much you’re bringing in each month helps you to make other investments, like vacations, as well.
If you look around, recurring revenue is everywhere, from Netflix to gym memberships. Sometimes courses are even available through a subscription model.
Not all recurring revenue models are monthly. There’s something called MRR, which stands for monthly recurring revenue, and there’s something called ARR, which is annual recurring revenue.
If your membership rate is on the higher end, like $600 a month, it would be a high level MRR membership. If you have a lower rate for membership, like $10 a month, you’ll need a lot of members to create a high monthly revenue rate. These types of low-rate membership do really well at the start, but typically they aren’t able to sustain themselves. Lower-rate memberships actually take a lot of work because of the volume of members you need to make it worth it.
If you want to learn more about high level or low level MRR, I have a Recurring Revenue Workshop that you’ll want to check out! We did these workshops a couple of months ago, the recordings are there, and they’re extremely valuable.
In our next episode we’ll get into the benefits and challenges of having a membership, so be sure to tune in!