Courses VS Membership Sites & How to Decide Which Is Right for YOU (Transcript)
In this episode, I am going to explain to you the difference between Online Courses and Membership Sites and help you figure out which of them is the best fit for you, your business, and your goals.
I’m going to help you make that decision by sharing with you some of the pros and the cons of each, my experience with them, and which one is best for you, depending on your situation and your goals.
This is a transcript of Work Less, Earn More, Episode 19. Listen to the episode here.
In today’s episode I am going to explain to you the difference between courses and membership sites, and help you figure out which of these two types of digital products is the best fit for you, your business, and your goals. If you run an online business, or you’re planning on starting one, then most likely you are very familiar with digital products and all of the benefits that digital products can bring to your business. Selling digital products is a fantastic way to be able to work less and earn more, because they are relatively affordable to create.
Once you create them, you can sell them for months, even years into the future without having to invest more time and more money every single month into improving them or into additional inventory. Simply put, they’re something that you can create in your business that can generate profits for a long time to come. So, they are potentially a really smart thing to invest some initial time and money into, so that you can start increasing your profits without having to continually increase your work hours. Now, you may have already decided that you want to sell digital products in your business, or maybe you even already sell some.
Maybe you’re thinking about creating something that is a bit bigger than anything you’ve created in the past. Maybe right now you aren’t selling a digital product yet or you’re selling some small individual digital products like individual downloads, or PDFs, or other resources like that. But you’ve realized that if you create something bigger and better, a really substantial digital product like a course or a membership site, then you’ll be able to charge a higher price for it and earn a lot more money. But you might be feeling really conflicted about which of these options you should go for, because really they’re both great options. I’m sure you’re aware that either one is going to require some time to create and also time to effectively market.
Both of these things are necessary for you to start making money with it. And so, I’m sure that you don’t want to spread yourself too thin, try to do too much. Because if you do that, you might wind up not making any money for the effort that you put into them. In this episode I’m going to help you make that decision by sharing with you some of the differences between courses and membership sites, the pros and the cons of each, my experience with each, and which one is best for you depending on your situation and your goals. First up, let’s talk about courses and what exactly they are.
Most likely you have seen some courses online, but if you haven’t, basically these are similar to the sort of courses you might take at college, but they’re all online. They typically have videos as well as worksheets. Sometimes they have quizzes or tests and they often also have assignments. Unlike courses you might take at a college, the courses that you might create in your business wouldn’t be accredited. They would be courses that people would take for personal development, or courses to help people learn specific skills so that they can grow their business or accomplish other goals.
People sell online courses about all sorts of topics. Pretty much anything you can imagine. Someone has probably made a course about it, and many other things that you can’t even imagine people have made courses about as well. I’ve heard of people making courses about everything, from calligraphy, to digital marketing, to raising goats, to dyeing yarn, to many, many other topics. Pretty much, if you have any sort of skill or a hobby that you are good at, or an area of experience, be it professional or personal, most likely you can turn that into a course and monetize your knowledge.
Courses are typically sold for a one time payment, and the prices that courses are sold for varies greatly. I’ve seen courses sold for prices ranging from $5 all the way to $5,000 and beyond. The price that you can charge for your course depends in part on the size and the quality of the materials, but mostly depends on the outcome that you are creating for your students and how valuable that outcome is to them. Then, second of all, on how you market your course, how effectively you market it, whether you position it as a premium product or as a budget option, and how effectively you advertise it.
Okay, so now that we are on the same page about what courses are, let’s move on and talk about what exactly a membership site is. Now, as far as content goes, membership sites are actually pretty similar to courses. Just like a course, they typically have educational videos. Often, they have worksheets, sometimes they have assignments and quizzes as well. However, there are generally two main differences between the content you’ll find in a course and the content you’ll find in a membership site. First of all, the content in a membership site typically isn’t as comprehensive and complete.
Specifically, unlike a course that has a finite end or a conclusion, a goal that you reach with a membership site, the content is typically being added to every single month, so it’s more modular and ongoing. Your students aren’t going to get to the end of your membership site whereas they would get to the end of your course. The other big difference about a membership site is typically there is a strong component of community. Most membership sites have some way for the members of the membership site to interact with each other, and the relationships that are created and the conversations are actually a large part of the value of the program.
This is occasionally done inside a course as well, but it’s more common to see it inside a membership site. Aside from differences with the content, the other big difference between courses and membership sites is the way the payments are structured. Unlike courses, which typically are paid for with a one-time payment, membership sites are charged on a subscription basis, which means that the members pay a smaller fee every single month to continue to have access to the materials and the community. So, to put it another way, a course is a lot like a class you would take at a college, whereas a membership site is more like a club that you would join and pay dues every month to remain a member of.
Now that you understand exactly what a course is and what a membership site is, let’s talk about some things that are good about both of them, because they have a lot in common and there are a lot of benefits that they both have. The first benefit is that they are both very easy to manufacture. Because they’re digital products and specifically because they are information products, you aren’t going to have to work with a manufacturer. You aren’t going to have to get a prototype of your course. You’re going to be able to make this course on your own. You can sit down in front of a camera that you already own.
You can teach these lessons, you can write the worksheets yourself. It’s pretty simple. It requires work, but it’s pretty simple. Another advantage they both have is that they are both easy to scale. What this means is that it isn’t a lot more difficult to sell a thousand units of your course or a thousand memberships to your membership site than it is to sell one or 10. Of course, that’s not to say that there aren’t any challenges with scaling, but compared to scaling a physical product and selling more of the physical product, these digital products are a lot easier to scale.
The main reason for this is because these digital products are delivered digitally. So, you don’t have to worry about increasing your infrastructure to be able to ship out more units of your course to your membership site. With a click of a button or a simple automation you can send your course or offer your membership to thousands of people just as easily as you can, a handful of people. Another advantage they both have is that they can both earn you money 24/7. Because it’s a digital product, you don’t have to be present in order for the sale to be made. So, people could buy your course or sign up for your membership site on the other side of the world, in what is the middle of the night for you.
Finally, the last thing that I’ll mention that is great about both of these options is that they can be continually improved. Now, the reason I say that this is an advantage is because it means that you can create a first version of a course or a membership site now. It doesn’t have to be perfect, because in the future you can update your course, you can add to it, you can add additional modules to your membership site. You could upgrade your platform or redesign your website. Unlike a physical product, where you might have to go back to the drawing board, create a new prototype, it might be expensive to manufacture a new version.
You might already have a bunch of them in a warehouse, none of those are problems with these digital products. Okay, but I don’t want to paint too rosy of a picture here because there are definitely some challenges that come with each of these digital products as well. Whether you’re making a course or a membership site, first of all, it’s going to take you time and effort to create. Yes, it can be pretty simple to get either of these set up, but it’s going to require several hours of your work, probably several dozen, maybe even a couple hundred hours of your work in order to create the content for your course or for your membership site to get this content processed, to get it uploaded to your website, to figure out your payment options. All of that.
I firmly believe that pretty much anyone can do this if they are capable of operating a computer and they have something they want to share with the world, but it does take work. The second problem you can run into with a course or a membership site is that all of that work that you invest into creating the product can potentially be wasted time and effort if you don’t do a sufficient market research before you get started. The reason that I mention that this is a disadvantage of both options is because I’ve seen people who did one or the other. They created a course or they created a membership site and it didn’t really work out for them.
They weren’t able to get people to sign up for it, so they didn’t make any money and they ended up blaming the option they had chosen. They had made a course, but they said, “Oh, I should have made this as a membership site, because there wasn’t a market for this to be a course.” Or, the other way around. But generally, the problem in these cases isn’t so much that they picked the wrong option as it is the fact that they didn’t do enough market research ahead of time to validate their idea and figure out whether or not people really wanted to buy it.
If you want to learn how to do market research like a pro so you can validate your idea and ensure that people will be interested in buying it before you put in all the hard work to actually create the product, then check out Startup Society. Startup Society is the monthly membership program that I run that teaches online entrepreneurs how to grow their businesses more successfully. Inside Startup Society, we offer a step by step action plan on market research. It guides you through the entire process of figuring out exactly what your customers actually want, so that you don’t run the risk of investing time and effort into creating something that nobody wants.
If you’re interested in learning more about market research and becoming a member of Startup Society, just head to gillianperkins.com/startupsociety, or check out this episode’s show notes for direct link. Okay, let’s get back to talking about the problems you can potentially run into with a course or a membership site. The next one is that both of them not only take work to create, but they also take a lot of work to market. Now, this is really the case with any product you might try to sell. Whether you’re selling it locally or online, it’s tough to get the word out about products. It’s tough to stand out from your competition.
It’s tough to turn your exposure into actual sales, and the courses and membership sites are no different. Regardless of the type of product you make, it’s going to take work to market. I would say that this is even more so with digital products, because they’re not as tangible as physical products, and it can be more difficult to explain and demonstrate the value of a digital product to your customers. Then, because courses and membership sites tend to be on the more expensive end of digital products that you might be trying to sell, you have to work harder to really show that value, to convince people to buy it.
Like I said, this is a problem you’re going to run into with either of these options, but it’s definitely a problem that can be overcome, especially if you have taken the time to do the market research to prove that people do really want your product. So, as you can see, there are some amazing, fantastic things about both courses and membership sites, but there are also some potential problems you can run into with each of them. But I know that so far this hasn’t really helped you figure out which of these options is right for you. So, now, let’s get into talking about the unique advantages of courses and the unique advantages of membership sites.
Let’s get into talking about some of the unique advantages and problems with courses, and then, we’ll do the same with membership sites. So, the first big advantage that courses have is that they are one and done. You put in the effort one time, it’s a lot of effort, but once your course is finished, you can step back and you can sell it. You don’t necessarily have to do anything more with it in the future aside from continue to market it. Your product is finished and you can sell it for months if not years into the future. In a similar vein, courses generally require very little maintenance.
Because most people who create courses aren’t managing a community, when someone buys your course, you can just ship it out to them with a click of a button, or possibly even just with an automated process that you don’t have to touch at all and you’ll get paid. Finally, one more big advantage of courses is that they typically sell for relatively high prices. So, if you do a big launch of your course and you generate a lot of sales, you’re going to make a bunch of money all at once. This can be great if you need a big cash injection into your business for some reason. Maybe you need to be able to earn a large amount of money in a short period of time so that you can take your business to the next level.
Maybe you recognize that there are some people you need to hire in your business, or there’s some piece of equipment you need to invest in, or you want to invest in inventory of a physical product. But you can’t do that now if you’re waiting for the money to slowly trickle in over several months. Launching an online course can potentially solve that problem. Courses can be an excellent option, but they also have a few challenges. One of these challenges is that when you sell a course, you only get paid one time, and that means that you have to do some work for each sale that you make.
Once you make a sale, you’re not necessarily going to ever earn any more money from that customer unless you have some sort of value ladder type sales funnel set up that’s going to sell them more products in the future. You’re going to make a profit from that customer one time and then you’re going to have to work to find your next customer and make your next sale. Another potential problem with courses is that they can create a feast and famine cycle in your business. What I mean by this is that when you launch your course, you can make a large amount of money one time, but then you might not make any money from that course until you launch it again since you’re only getting paid when the initial sales are made.
Now, this problem can be solved or at least mitigated by creating an evergreen sales funnel that continually sells your product. That is another system that you will have to set up, but it can solve that problem. And the final problem that I’ve personally experienced with courses is that it can be really tough to get your students to actually complete the course and get the results that you’ve promised to them.
Most likely as a content creator and as a teacher, you care about your students getting results. You don’t just want to take their money and then never see them again. You want them to be happy with their purchase and to really get what they paid for, because when someone buys a course, they don’t really want the course. They want the result that you’ve promised to them. So, it can be really frustrating to struggle to get your students those results. Now, I know that this isn’t a problem that I uniquely have because I work pretty closely with Teachable, and they’ve shared with me numerous times that the industry standard for getting students to complete courses is somewhere between 10% and 30%.
So, that means that only 10% to 30% of people who buy a course actually complete it. Now, this isn’t that surprising because I think that we all have a tendency to try to solve our problems by just buying a product, but then convincing ourselves to actually do the work is another matter. Maybe you bought some courses in the past that you haven’t finished, or even if you haven’t done that, you’ve probably bought a few books that you haven’t finished, and for exactly the same reason. There are definitely some things that you can do to help your students become more successful in your course.
But it’s just something that I’ll bring up that is potentially a problem that you’ll run into with selling courses. This episode is brought to you by Startup Society. If you run an online business or you’re thinking about starting one, then Startup Society is the place for you. It’s a boot camp training program for entrepreneurs plus an incredibly supportive membership community. If you’re looking for a framework to make building an online business as simple and straightforward as possible, then that’s exactly what you’ll find inside Startup Society.
Every month we create a step by step action plan for our members to follow to create a specific result in their business so that they can keep moving forward and growing. Past action plans have helped our members write their websites, launch online courses, and hire their first employees. When you become a member, not only will you get access to our future action plans, but you’ll also get access to our entire library of past action plans, including the ones that I just mentioned. You’ll also get business coaching directly from me during our live monthly coaching sessions.
During these sessions, you can ask any business questions that you have so that you can make sure that you get the answers you need in order to be able to keep moving forward and not get stuck. As a member, you’ll also be invited into our membership community where you can connect with other online entrepreneurs who are crushing it, so that you can be inspired and make some lasting connections. If you’re interested in becoming a member of Startup Society, then there’s no time like the present to make that happen. To sign up, just head to gillianperkins.com/startupsociety.
Again, that’s gillianperkins.com/startupsociety, and as a listener of this podcast, I have a special offer for you. You can become a member of Startup Society for $10 off every single month. Just use code EarnMore when you are signing up. Again, that code is EarnMore, all one word, and it will give you $10 off your monthly membership costs. If you want to turn your online business into a success as quickly and as strategically as possible, then I would love to work with you to make that happen. And now, let’s get back to the episode. Okay, now, let’s talk about membership sites.
Here are a few things that are uniquely good about starting and running a membership site. First of all, membership sites create recurring revenue. What this means is that when someone signs up for your membership site, they won’t just pay you one time. They will pay you month, after month, after month. Now, of course, depending on how good the content in your membership site is, and how accurately you marketed it, and how well you serve your members, they may stay for more or less time. Maybe you’ll see that your average member stays for three months, or maybe you’ll see that your average member stays for 12 or more months.
But assuming that your membership site offers some value to your members, you’ll most likely be seeing your members stay for multiple months, which means that you’ll see more consistent income from one month to the next as those payments continue to come in. It also means that you don’t have to work quite as hard for every sale that you make, because when you land one customer, they are going to buy from you month, after month, after month. Very directly related is another advantage of membership sites, which is that your profits can grow one month after the next.
So, unlike courses where you’re working for every sale you make, and so if you put in a big effort one month and generate a lot of revenue, the next month, if you want to create the same results, you have to do that same amount of work again. But with a membership site, it’s a little bit different because you do some initial work and you get some initial members, but then each time you do more work, you’re going to be adding to your monthly revenue. So, your monthly revenue can actually be growing from one month to the next even if you are working less and less each month.
This is definitely one of my favorite things about running a membership site, and it’s one of the secrets that allows me to work in my business as little as I do. One more great thing about membership sites is that they really promote community and engagement, and this can mean that it’s easier to get results for your students. If your membership site has a community element, meaning that the members are interacting with each other in some way or another, then they are going to be continually logging into the program in order to continue those connections and those conversations.
This not only means that they’ll simply be coming in contact with the course material more often, but it also will help them to stay more motivated to complete each of the lessons. For this reason, I’ve found that it can be a lot easier to get member’s results than it can be to get students of a course results. Membership sites have a lot of good things going for them, but they definitely have a few problems as well. The first problem is probably the biggest one. It’s that membership sites really require ongoing work. You have to keep creating some new content for your members every single month if you want them to want to stay members of your site.
If you don’t keep creating content, then they’ll get to the end of the content you’ve created and they won’t have any reason to keep paying you. Aside from that continual content creation, you will also have some recurring maintenance. Because the product is more module based and you’re always adding new things to it and the members are engaging in the community, there will be things that will go wrong. Unlike a course that is a more static product. That means you’re always going to have to be fixing little issues that pop up. In a similar way, because your members will be more engaged and will be going through your content more actively, you will have more customer service to deal with.
Now, I’m not sure if this is exactly a bad thing, it’s happening because your students are more engaged with the material and are working through it and are getting results, which is obviously a great thing. But it does mean that there will be more customer service questions for you to answer, or that you’ll have to hire people to help you answer. Finally, two random little problems. One is that if you have a membership site, you can potentially run into problems with your payment processor. Now, technically, this can happen with a course as well, but because course sales are one time events, with course sales, if you have a problem with your payment processor, you miss out on a few payments, but it’s not really going to affect your future revenue.
It’s just going to cause you to lose a small amount of money right then. With a membership site, however, if you have a problem with your payment processor, it can cause your member’s subscriptions to be canceled, which can have an enormous effect on your future revenue. So, say you had 100 members who were each paying you $50 a month. So, your membership site is consistently bringing in $5,000 every month. You’re working every month to continue to bark at your site so that any members that you lose are being replaced and you’re basically maintaining those 100 members. But then, what happens if something goes wrong with your payment processor and all of your member’s subscriptions get canceled?
You’re going to lose all of that work that you put into initially marketing and continually marketing your site, and you’re going to have to start back at close to zero. I say close to because most likely a chunk of your members will resubscribe as soon as you explain the issue to them. Of course, the work that you’ve done to market your company and build your brand won’t be lost. So, you’ll have an easier time getting members your second time around, but this can still have a big impact on your profits. Payment processing issues like this are not an everyday occurrence. So, I don’t want to scare you.
I’ve never had an issue that was that big that caused me to lose a lot of members, but I definitely know people who have membership sites that have had at least some issues with their payment processors that have caused them to lose significant amounts of money. I bring it up because while it isn’t that common, it is a problem that you could have with a membership site that you wouldn’t really have with a course. The final random little issue with membership sites is that membership platforms aren’t currently as elegant as course platforms. Courses have become more and more common over the past several years, and some great options for software for hosting your course have been created.
One of my favorite options is Teachable. I have some of my courses on their platform and I’ve been working with them for a few years now. They make creating and managing online courses so easy, so user-friendly, honestly, almost effortless. You can create such a professional result and there are many other great options out there as well. Membership sites, on the other hand, well, there’s just not as many good options. These days, most course platforms like Teachable do offer an option that can allow you to use their platform as a membership site as well, but the platforms aren’t really designed for that.
So, they don’t provide the best user experience for your members. You definitely can use one of these options, but if you want your membership site to be as professional and to serve your members as well as it possibly can, then you may end up wanting a custom solution, which can mean that creating your membership site can be a bit more work and can potentially be a little bit more expensive than launching a course. All right, so that brings me to the end of all of the different advantages and disadvantages of courses and membership sites. But before we wrap this episode up, we need to talk about how to decide which of these two options is right for you.
Because as you can see, or perhaps as you can hear, each of these options have a lot of good things going for it, but also some challenges. Here are some things I’d recommend you consider to help make this decision. First of all, which of these two options would best serve your content and your customers? You need to think about how you want to serve your customers and the outcome that you want to create for them. If your outcome is a very specific finite sort of outcome, then a course might be the best fit for you because that is the sort of outcome that a course easily creates. On the other hand, if you want to provide more ongoing support to your customers, maybe they need continual encouragement for a process that’s going to take them a long period of time.
Maybe what you’re going to be helping them with is something that they need to work through slowly, or maybe the outcome that you want to get for them isn’t a very finite outcome. It’s not something that they will achieve and then be done with, but more something that they are going to keep working on for the long haul. If that’s the case, then a membership site will be a better option for your content and will serve your customers better. That’s the first thing you should consider. Would a course or would a membership site better serve your content and your customers? The next thing you’ll want to consider is what your personal goals are.
Why do you want to create a course or a membership site? What do you want to get out of it? There are three main things that I can think of that you most likely want to get out of creating a product like this. First of all, you might want to have impact. You might want to get your students, your customers results. If that’s the case, then go back to question one and to think about whether the course or the membership site would really serve your customers best and most effectively get them results. But beyond impact, another thing that might motivate you is you want to increase your income.
If we’re talking about working less and earning more, this would be on the earning more end of the spectrum. If you want to maximize your profits. In that case, I would recommend a membership site. As I mentioned earlier, with a membership site, you’re able to build your income from one month to the next. In my business, I sell courses and I sell memberships, and I’ve found that the memberships have a bigger impact on my business’s annual revenue. It’s easier to make more money with a membership than it is with a course where you’re having to work for every sale.
The third thing that you might personally want to get out of creating a digital product like a course or a membership site is working less. So, again, going back to work less, earn more, you might want to create this digital product that you can sell over and over and over again, and be able to have this profit in your business without having to work as much as if you were, say, serving your clients with a service product. If that’s the case, if you want to work as little as possible, either of these options definitely could work for you, but a course is most likely going to be less work.
Because once you do the initial work of creating the product and perhaps the initial work of setting up an evergreen sales funnel, you’ll be able to step back and make sales without necessarily having to do anything more. At the very least, you’re not going to have to continually create new content every single month, which can free you up to work a lot less. Now, I want to be really clear here that if you’re thinking about whether you want to earn more or whether you want to work less, it’s not really a black and white issue. It’s not an either or. Both of these types of digital products can earn you a lot of money, and both of them can free you up to work a lot less.
But they also both do require time and energy to get off the ground and to maintain, and both of them can potentially earn you no money at all if you don’t do that market research to make sure you’re creating a product that people actually want, and you don’t effectively market the product. So, don’t choose one or the other just because you want to earn more or because you want to work less. They both can do these things and they both can not do these things. It depends on how you create your course, how you market your course, or how you create and market your membership site than it does depend on which one you choose.
The final question I’d recommend you consider as you’re trying to make this decision is which option do you really want to create? Now, you might think at first that this isn’t really a helpful question because if you knew which one you wanted then you would just pick that one. But I don’t so much mean do you want to make a course or do you want to make a membership site? I mean, think about what each of these things really is and which of them sounds more appealing to you. A course is a packaged product. You create it, you perfect it, and you sell it. That’s it. A membership site, on the other hand, is a community.
It’s a living, breathing organism, something you have to maintain, but also something that can grow and develop over time. Neither one of these is necessarily better than the other, but they each have their own unique advantages and one of them probably appeals more to you than the other one. Okay, since this really is the crux of the issue, before we wrap this up I’m just going to recap these questions that you can ask to help you figure out which of these two options is best for you. First of all, think about which would better serve your content and your customers. Which would help them to really get the result that you want to get for them.
Second, think about your personal goals. What do you want to get out of creating one of these products, and which one would better help you reach that goal? Then, finally, what do you really want to create? A packaged product that you create, perfect, and sell, or a living, breathing community? As I mentioned earlier on in this episode, if you would like some help with your market research so that you can make sure that you’re creating a product that your audience really wants, or if you need help with the process of building your audience and finding the people to buy your product, then consider joining Startup Society.
Startup Society is the membership program that I run that works with online entrepreneurs to help them grow their business and sell their products. You can learn more about Startup Society and sign up to become a member at gillianperkins.com/startupsociety, or check this episode’s show notes for a direct link. If you enjoyed this episode, then be sure to let me know by leaving a review on Apple podcasts. Every single week I feature one of these reviews that our listeners have shared and the featured review this week comes from Tatiana_life in glow.
Her review was titled, look forward to listening to more episodes, and she wrote, “So glad that Gillian started a new podcast. I love her YouTube channel and have learned a lot through it. The title Work Less Earn More is exactly what I need right now, and some guidance here will be really helpful. A few years ago when I was rethinking my approach to starting new projects, both passion and for work, I realized that there are only a limited number of hours in a day and it is simply impossible to fit all those dream and goal projects into them. I realized that it is time to change my approach and really create some systems.
I’m still figuring it out. Anyway, I really enjoyed listening to all of the first episodes, especially the fourth one. Good luck on the podcast and I look forward to the next episodes and learning more.” Thank you so much, Tatiana, for taking the time to write that review. I really appreciate hearing from you and your great feedback, and I also know that your review will help more people find this podcast. So, I can’t say thank you enough. All right, well, that is all for now, but thank you so much for joining me today. I’m your host Gillian Perkins, and until next week, stay focused.
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