Lessons, Tips and Tricks for Making Money With Interviews

If you think the subject matter you are considering for a membership site is too narrow, consider this. David Eedle started his membership site focusing on the theater arts back in 2000 and quickly grew from a simple email newsletter to over 25,000 paying members. What’s more, he had an astonishing retention rate of 85%-88% – renewal numbers anyone would be thrilled to achieve.

In this podcast and video, David tells us his story and give us his thoughts on everything from where to begin to where to start your pricing efforts.

He’s also written an e-book called Niche Content Millionaire that tells his story along with the valuable lessons learned along the way – a must read for anyone considering a premium content website.

Let me know what you think of this show in the comments. The transcript is below the video.

If you’d like to download the mp3 audio of this interview:
download or listen to the mp3 file. (to download, right click and then “save link as”)

Transcript:

MemberCon.com: Hello everybody. Welcome back to MemberCon.com. Thanks for joining us for another interview. The idea of course of all of these interviews we’re going to be doing at MemberCon.com is to give membership site honors and Internet entrepreneurs something to think about in your own businesses and maybe some tips and tricks and things that you can use in your own business if you started one already. And if you haven’t started your site yet, well, hopefully you get this education along with the education that I’m giving to myself here by talking to all these people have gone before and done this and had some success. And today, we are going to be speaking with David Eedle, and he has got a web site called NicheContentMillionaire.com. He has also got a great E-book there that you can download. But we’re going to talk to him today about Niche Content as it relates to membership sites cause he’s got some experience in that regard as well. So, David, thanks very much for joining me on the show today.

David Eedle: It’s good to talk to you, Tim.

MemberCon.com: Well, lets talk about your background. First of all, what was your first experience with doing membership sites?

David Eedle: I actually have a theater background so I started life back in the 80s working in theater and working on subscription fees and so not really a web site but it gave me the grounding for the idea that you could encourage people to pay for a recurring fee. So when we started our own web site and with a membership program, I actually drew on a lot of that experience: the thoughts, the techniques, and ideas to encourage people to sign up.

MemberCon.com: Why do you think membership sites are growing so popular these days in terms of business for the Internet?

David Eedle: I actually suspected it’s because everybody discovered them to some degree. Memberships aren’t new, of course. If you think off line, I just gave you the example of theatre subscriptions. But the easy example is the magazine or a newspaper subscription. So, the general population is pretty relaxed and comfortable with the idea of paying the regular amount of money to receive a regular piece of information. The challenge online has been to find a way to package up or put together content that would replicate that kind of an off line behavior. There’s no question, there’s an awful lot of Internet marketers out there pushing the idea and we can probably argue till we go blue in the face how valid some those programs are. In terms of simply tapping into a piece of human behavior that is already well established, it’s pretty easy to understand why membership programs online are working pretty well now.

MemberCon.com: A lot of content, of course, people expect to be free online. Do you think that pendulum is swinging on the other way now? Are we changing to an Internet where some of the best content will have to be behind some gates and you’ll have to pay for it?

David Eedle: Well, there’s obviously a really interesting debate going on right now in the newspaper world. Since everyday I pick up the newspaper. Actually, I pick up Google Reader, and see another story about yet another newspaper going bankrupt or folding, firing a lot of people. I mean in what you might call traditional media, there’s a great big debate going on about it at the moment.

MemberCon.com: You’ve seen obviously most of these membership sites from the Internet markets especially are about making money online. But I’m finding and in doing a lot of looking around that there is lot more Niche Content from people that have nothing to do with Internet marking and nothing to do with making money online. That seems to be growing as well.

David Eedle: Look, and absolutely and that’s the world that we come from. Our whole story started with a free e-mail list that we ran. We used to run a management consultancy business here in Melbourne, in Australia working with arts and entertainment organizations. And one day back in April 2000, we put together a little newsletter to send out to our consulting clients and we popped in a few jobs that we saw from the newspaper. We literally just read them out at the weekend papers but we thought might be of interest to that market place. So, people working, for example in entertainment management, I think there were 17 jobs in there. And we send it out really just as a promotion for our management consultancy. But within about four or five months, we had about 8000 or 9000 people sign up to this free e-mail list. And we had to put on a staff member and build a web site. So, in a way we fell into it by accident. But very definitely, what we were doing was focusing on a niche that we knew an awful lot about. So, we, my partners, Fiona and I have a long background in arts, entertainment, and media. So, I guess we were focusing on the things we knew about and to some extent, it was a slight fluke that we then fell in idea of building a membership web site around it and it really only came because of the demand that is that we had so many people signed up to the free e-mail list that gave us the impetus to then put together the membership program and start to charge for it.

MemberCon.com: So that’s a good question. You actually built the list first obviously and then gave some content away and in other words, those job listings. But if somebody wants to start today and they don’t have a list, do you think it’s important to put out some free content first there or should from day one I start with the membership premium area that’s only for members even if I’m just charging a small amount?

David Eedle: I think I’d probably do the last though, that is that I would absolutely you need the free content out there. You need show that you can walk the walk and talk the talk. I was listening to your previous interview with Jeff White, from the StockBandit and he makes the same point. I mean whilst he has a membership program, he is also clearly working very hard on creating good quality content that will attract people into his site. But I think, having said that, I think it’s important that you kind of set the tone to start with. So, even if you are only charging a small amount per month, I mean, say $4 or $5, what you’re trying to do is to set the agenda for where you’re trying to go. But there’s no question that good quality content offered for free will attract people into the web site. I mean, you need to establish yourself as an authority on your subject. You need to establish yourself as the expert and until you are able to do that, you’re going to find it pretty hard to sell a membership.

MemberCon.com: When I first started, I pulled out a number out of my head then I thought, “Here’s the number that I’m going to be motivated to continue to create this great content,” and that I thought would basically compensate me for doing it well.” I’m seeing a lot people that kind of seem to start too low. In other words, they’re worry that they’re going to be to too expensive and they really low ball and thinking, “Well, I’ll just make it up in the number of members.” But I think that’s kind of a risky move. What are your thoughts there in terms of pricing?

David Eedle: I think there’s an awful lot of elasticity in subscription prices. People are not “price-sensitive.” They’re “value-sensitive.” It’s the attitude I always adopt. If people believe that you’re offering a good quality value proposition, then I will pay the money. There are subscriptions online where you can pay for several thousand dollars year for a subscription. There’s one for example in the mobile phone industry and it’s targeted at executives and managers who work in cell phones and calling cards and things like that. I think a membership for that is something like $5000 a year. Now, they’re probably not going to sell a million memberships but if each membership is $5000 a year, then you don’t actually need a huge number of members to make a difference. The trick is to make sure that the value proposition is there. I actually get slightly worried when I see really large membership prices because they now start to wonder whether there is actually any value in there. So, I think people need to not be afraid of price and some experimentation is what’s needed. So, maybe try a couple of different levels of membership for example. I also worry when I see web sites that really only have one membership level. What you need to do is try to find ways to break it up. So, an easy idea, of course, is something like bronze, silver, gold memberships. What you’re trying to do is pitch different price levels to attract different parts of the market.

MemberCon.com: And one of the things I do with TraderInterviews is we offer a monthly subscription but then we offer a six-month subscription that is pretty well discounted from that monthly and that seems to really work. We find more people taking this six-month than paying more, which is great because we get more money in our pockets right away. So, I guess it’s another option too.

David Eedle: Yeah. Absolutely. I think you are exactly on the right track. We did some work with a stock market newsletter here in Australia a year or two ago that was extremely revealing. The standard annual subscription was $600 Australian dollars. And then, while I was working on their web site one night, I just, as an afterthought, I slipped a last membership in there at $4500 almost as a joke in a way. I never thought we’d sell one. The next day we sold one, and then the next day, and then the next day. Don’t be scared to experiment to see what you can do. And at the end of the day, what you’re trying to do is bring your cash forward. So, you’re quite right saying, well, you’re quite happily selling a six-month membership because it put the money in your pocket today and that’s a really good theory to pursue.

MemberCon.com: My only hesitation for doing a one-year or even a lifetime membership, was that I’m now committing myself to a lifetime of content I guess, and that was my only fear.

David Eedle: (laughs) Tim, you have to wonder…Look. I mean for a lot of those lifetime memberships, it’s a question of who forgets first, whether you forget to do your web site or whether they forgot the membership.

MemberCon.com: Right. Well, so, when you first started, did you look around to your industry, the theater industry, and say, “You know, this is what I think the market would bear,” or how did you decide for yourself?

David Eedle: There were very few examples around remembering that we started in 2000. So, nine years ago now. And, there were no examples of a subscription online for what we were trying to do. I actually just went with a magazine subscription price. So, the average magazine subscription in Australia, just a trade magazine or something like that back in 2000, I think was about $50. So, we pitched in about that same price. I might add it’s now a hundred and something dollars a year as a basic subscription for that web site.

MemberCon.com: And you recommend starting…is it easier to start low and then raise it later or should I start high and that if I don’t get the membership I want, lower it?

David Eedle: I think a bit of both. I mean, back to my original point that they’re not price-sensitive, they’re value sensitive, don’t be scared to put your price up. We actually had a regular price increase. We used to put it up at the same time each year. So, people get used to the idea of an increase. But at the same time, again, if you pitch a few different price points, you can them mess around with it. So, for example, if you find one of your price points isn’t working so well, then you can drop it or change it. Whereas if you find one that’s working really well, then you can bring that up front in your marketing and push that one. I’m not a big fan of discounts, for example. So, I tend to, back to this idea of value, I tend not to discount things. I tend to try to find a way to add new value. So, an easy example is you might have a marketing campaign where, “If you renew your subscription, we’ll add an extra three months on so you’re getting 15 months to 12 months.” I mean you’re still getting your cash in your pocket. The extra three months doesn’t really make a big difference to you but it makes a nice pitch message to the customer.

MemberCon.com: Right. That’s a good point. Now, I noticed with your recent E-book that you put out which is tremendous because it’s do comprehensive. You went with a single product you’d buy one time. Any reason why not to go with a membership site for that kind of content and with a one-purchase price time only thing?

David Eedle: Yeah. It’s not that we haven’t thought about it. I guess we have a little but the original point of the exercise for us was to write the book and to be honest, we simply just been asked about it by so many people. A lot of friends and so on had said, “Look, you know, you ran this things for seven years. You did pretty well out of it, you know. There must be a lot of stories you want to tell,” and so on. And that fired us up a few months ago to actually sit down and try and put a book together. Instead of leveraging it into some kind of membership scheme, I’m not saying no, we’re ruling it out. But I guess we just hadn’t really got to that point yet. We spent the last sort of the three months putting the book together. We’re now just starting on the marketing for it to make sure we are getting it out there and talking to people who like to sell and so on. In terms of moving forward, I think we will look at something. I mean we’ve already had a fantastic feedback. I mean, it’s really only been on sale for a week or so but some had some terrific feedback from people including, you know, family and friends we sent advance copies too and some reviewers and so on. If we can find something in there then we will. But I need to say, we’re not going to do something just for the sake of doing it and I get a little worried about some of the membership programs I see out there that really do seem to be just a question of trying to find a way to extract some money out of people and they’re not too fussed about how they go about it. I’d like to think that we put a bit more effort and a bit more truth and honesty into creating some kind of program and the when we’re ready, we can take that out to the market and see what people think.

MemberCon.com: That’s a good point in wanting to make sure you provide value there. It’s obviously a good tip and you’ve mentioned it over and over again. It’s critical. Now, another thing I’m seeing some people do is offering individual products for sale to their members. Have you ever talked to Fiona and thought about, “Do I add this in to existing membership?” or, “Is this something that I can sell to members who will pay for this?” I mean, how do make that tradeoff between adding more value to your existing membership and bringing it a little more revenue?

David Eedle: Well, the obvious thing is, you can do both. I mean the joy of online is the way that you’re able to mix up and create lots of different product points and packages and offer them out in different ways. So, the easy example is if I had an existing membership program and I had a product like this book then obviously I’d offer it in to the membership program. Some kind of member benefit may be as part of the renewal campaign, maybe add ten dollars on and get the book, and then be able to put the book out there as a standalone product. I mean it’s not a binary question. You are able to mix it up in lots of different ways and it’s the other reason why for example advertisers. If you’ve got a really great hold on the niche market, then advertisers start to get really interested because they are able to come to you to ask about how they can get their products into that membership group.

MemberCon.com: Now that’s a good point because you always think, “Well, if they’re paying for it, they’re less willing to look at advertising,” but there may be some situations that sounds like where you can have a sponsor of something and still offer to the membership and not make it, I guess, too much too sales, if you will.

David Eedle: Absolutely, and Tim you used the word sponsorship and for example that’s a really nice way to describe it. So, for example, if you have an e-mail newsletter that’s the part that goes out to you members then there’s no absolutely no reason why you shouldn’t be having that, you know, why shouldn’t get that sponsored. Even if you’re only charging, you know, a couple of hundred dollars per addition. If you you’ve got one addition per week and, you know, 52 weeks in a year, then there is a nice little extra income in it for you. But again, I think this is…I want to make the point that you get maximum benefit by treating your subscribers and members with respect. So, if you go about that kind of sponsorship advertising in a really a really respectful way, and make sure that you are only putting relevant products in front of them that it’s something that they might actually want instead of just spamming them, then I don’t think people will have a problem with that at all. In fact, we’ve seen really great response rates from those sorts of campaigns.

MemberCon.com: Lets talk about renewal. You have touched on it ever so briefly in one of your other answers. But as I told Jeff, and you probably heard me and I talking about this, I was really surprised when I first got into this business that renewals or the lifetime of a member is months. It’s maybe five months to eight months on the high and I was surprised by that. What have your experiences been with the renewals until they cancel?

David Eedle: Mine has been the complete opposite. The business we used to run still has subscribers who joined in 2000. So that’s pushing 10 years. And this is one of the things that gets me really angry about some of these membership programs I see out there. They seem to treat customers as quite disposable. They don’t seem to be too fussed if they lose one, and they assume that they’re only going to hold the customer for a short length of time. Well, in which case there must be something wrong with the product because if the product is compelling, then people will stay subscribed. The reasons that they will stop subscribing are things like maybe they lose their jobs, you know, they have a change in their financial conditions, or maybe they moved on in their career. If you’re providing a product that’s related to their work, or their business, then for example, maybe they move on their career or changed jobs and so on. But our renewal rate, consistently over the years, was about 85 to 88% of people renewed. And was the across the membership of about 25,000. So, you’re always going to have an attrition rate. That’s a fact of life. I mean you’re not going to have a hundred percent renewal rate. But these people who go into a membership program automatically assuming and structuring the program so that it really only encourages people to stay subscribed for a few months, I think that’s pretty short sighted. I mean you need be sitting down and saying, “How can I create a product and structure it and run it over time that it’s going to hold people’s attention in the long term?”

MemberCon.com: Yeah. And I guess that’s probably a function too. I’ve been seeing a lot more what they call membership size but really just a course that they take over a period of maybe three or four weeks.

David Eedle: Yeah. You’re right Tim. And we need to make that distinction. A membership site for me is what I would call a subscription content site. It’s like your site. I mean the idea is that the site is creating great quality content that’s compelling to a particular group of people. It’s doing it consistently. It’s doing it regularly and it does that over a long period of time. And if you’re able to achieve that, then you’re going to hang on to people. You know, there’s that old saying in advertising that dates back, you know, and is quoted all the time, you know. “It’s six times easier to hang on to an existing customer than it is to acquire a new customer.” I mean I don’t understand the logic in some of these people’s arguments that they are going expend all of this energy and cost to acquire just to hang on to somebody for a few months. I mean I would have focused on how I’m going to hang on to them for two years, three years, and five years. And our experience is you can achieve that if you get the product right.

MemberCon.com: Did you ever have tough points and thought, “I’ve talked about everything I could possibly talk about on this site.” Or was it easy to find content to post all the time?

David Eedle: There are days when you all sit there looking blankly at your computer screens wondering what you were going to write. I have to say we’re in the fortunate position that by the time, you know, towards the end of our ten-year with the business, we’d grown pretty large. So, we have a full-time staff, in-house of 16 or something. We had an office in London with a couple of staff and we had about 40 contract writers around the world producing content for us. So, I need to be honest. It wasn’t a question of David or Fiona sitting down in front of a computer screen everyday wondering what it was we were going to write about. I can understand what you’re saying. If you are a small operation and there’s just one or two of you, it can be difficult to maintain the enthusiasm. It may be not even a question of, “What am I going to write?” It’s question of whether I want to write, you know, and having to get up each day. And I guess, I mean, it’s a point we make in the book somewhere is that running a successful business is actually quite boring you know in one way because what you’re trying to do is replicate over and over and over again exactly the same thing. Because that’s what your customers have signed up for. So I guess stamina is a trait that comes mind.

MemberCon.com: Good point. Trying to keep that quality at the same level and that’s what the question I’d like to ask you next is: In what point did you decide to start hiring some writers and people to create that content and how did you keep that quality the same as you wanted to be when you were doing it yourself?

David Eedle: One of the first positions we ever hired was an editor. So, once we built up some kind of membership and things were starting to get a little bit busy, pretty much the very first position we hired was a writer-editor person. So we were able to designate somebody specific to take charge of the content on the daily basis, to edit what was going out to staying in control of what was being displayed on the web site even if it was coming in from multiple sources. So, somebody specifically to guide, shape the content and that sort of person on our content site is your number one asset.

MemberCon.com: Well, after all those years, I’m sure there are a hundred lessons and thousands of lessons that you’ve learned. Anything you would do differently that would say, “Okay, if I was starting today, I would do this differently now.”

David Eedle: Probably about a million things, Tim. As always, you live and learn. So, you learn your lessons as you go. I think starting was a big issue for us. I said to you that one of the first positions we hired was an editor but we made mistakes in the early days. When the money started coming and we thought, “Okay, well that’s great, you know. We can take a step back a little bit,” because we were pretty much working seven days a week and we sort of got all enthusiastic and hired a big bunch of staff but they weren’t necessarily the right people for us. And, you know, for example we moved out of our…we started the business in our lounge room and after a while, again, because the money was rolling in, we moved out to a separate office building and all of those sorts of things. But, on reflection, we really should have just stayed at home. We would have made a lot more money. So, I guess the point I’m trying to make is that too early on, we incurred much higher overheads that we needed to because we thought that we were under the misapprehension that was what you have to do when your business was growing big. But that’s a reality check with, you know, all the fantastic technologies we’ve got available for us today. I mean you really can run your business from your lounge room. You don’t have to have an office with 50 desks in it. We’ve got Skype and all the other great remote work tools. So, I think trying to hold those overheads down. That might be a relatively boring part of the story but it was actually a key one for us and a big lesson we learned.

MemberCon.com: Well, to be fair to you, probably back in 2000 and 2001, there wasn’t a lot of people doing freelance writing for the Internet. I mean that was still kind of getting started.

David Eedle: Well, no, and our phone bills…and we didn’t have Skype and our phone bill was $2000 a month.

MemberCon.com: Wow. A lot of things have changed since then in just a short time.

David Eedle: They certainly have and I mean that’s the exciting thing. I mean we did it with, you know, there were very few other examples of what we were doing and I guess, to some extent, we went in and went a little naively but that was because there weren’t other examples around. These days, coming on to 10 years later, there are some terrific technologies around. There are all sorts of resources and ideas out there for people to grab and we’re seeing, you see as a consequence, you see some really fantastic sites coming through and really fantastic content and some people doing, making a pretty big success of it.

MemberCon.com: Well, hopefully we get a chance to talk to a lot of them and I appreciate you David taking the time to talk to us today. Listeners, of course, you can go to his site. It’s NicheContentMillionaire.com. We’re going to link to it in the description and in the transcripts as well. David, thanks so much for talking with us on the phone.

David Eedle: Tim, you’re welcome. It’s been great talking to you.

site marketing, starting a membership site