Memberships vs subscriptions

Memberships and subscription sites are often used synonymously. Both offer opportunities for recurring revenue and include similar characteristics. You can even turn a membership site into a subscription business and vice versa. With that being said, they are still distinct from one another.

Let’s look at the distinctions from a high level. In doing so, it may become more clear whether a subscription or membership site is the better model for you.

Memberships

• Usually include a focus on building a community with its members to keep engagement and retention high.
• Includes open access to a range of products or services rather than just one offering.
• Members gain access to a portal where they can explore content and products freely.
• Sometimes, membership sites include an application form to join.
• Often, there are different tiers of a membership site, with one often being free and higher tiers being paid.

Subscriptions

• Subscription businesses don’t have to include a community, but some do.
• Subscriptions offer both physical and digital products.
• Rather than having open access to a suite of offerings, subscribers often receive narrowly defined products or services for their recurring payments.
• Subscriptions are almost always paid.
• Subscription businesses emphasize customer service to keep subscribers satisfied and retention numbers high.

You can see that many similar characteristics overlap with one another.

Communities are a great example of this. Many businesses include communities as part of their marketing strategy. What better way to grow brand awareness than to be a place where your target market can come to learn and meet others like them?

Both subscription businesses and membership sites build communities. But in a subscription business model, communities are primarily used as a way to attract new customers to their subscription offering.

Conversely, the community with a membership site is much more important. Members want to connect with others. It’s much of the reason they’ll pay. Many membership sites, for example, will offer free content to attract their target market. Then, they’ll offer an exclusive membership community where they can meet others and have even more helpful content.

Unpacking the differences between membership sites and subscription businesses leads to the question of how membership sites make money.

How do membership sites make money?

An important distinction of membership sites from subscription sites is that not all memberships have paying members. Many membership sites are simply communities where people connect.

With that said, if you want to build a successful membership site, there are a few ways to monetize your membership.

Let’s look at a few of the most common:

• Offering free training videos while also offering a paid membership with premium content (a traditional membership site model).
• Selling access to an online course you’ve created and update regularly.
• Building an audience and offering paid coaching sessions.
• Building a high-traffic website and promoting affiliate offers to get a commission.
• Building a high-traffic website and placing ads that members can avoid if they sign up and pay.
• Creating a gated online community where members need to pay to join.
• Bundling digital products like training videos together for a membership fee.
• Combining any of the above strategies, like these top subscription industry experts.

As you can see, there are many ways to generate recurring revenue through a membership program. And how you price your membership depends a lot on the type of business you’re building and the features included.

So what are the different features of a membership site? Let’s fill you in:

What are the main features of a membership site?

Despite the diversity in the types of membership sites you can build, several distinct features are common.

Some features are core to what membership sites offer, while others are important to helping the business run.

Let’s look at them below.

A community or forum

As touched on above, many membership sites include a digital or real-life community. In these communities, members often share similar tastes and use a forum to ask questions, share how they use the membership, and build relationships.

Know that it takes work if you plan to nurture a community around your membership site. You’ll need to be actively involved in the discussions, so members stay engaged. But if successful, communities can add a ton of value to a membership site, strengthening retention and building a more resilient business.

Access to multiple offerings with additional perks

Membership sites often have a variety of offerings. Members get access to several products and services and can choose how they want to use them.

Costco superstores, for example, offer memberships to access their products. But it’s up to you how often you go there and what you buy.

The same goes for many membership sites. You should have enough content or products that members can self-serve themselves.

Include downloadable content or takeaways

A key feature of membership sites is letting members download and keep content. For example, if you’re running one or more online subscription courses, members can watch videos you’ve created and then download any additional readings, checklists, guides, or more. Often, these “extras” are only available to members on higher tiers, making their membership more valuable than non-members accessing only free content.

Harvard Business Review is another example. For members, they package up several popular articles around a particular theme and offer them as a bundle you can download.

Membership tiers 

A membership site will often have tiers as part of their pricing strategy. Tiers are a great strategy to bring in hesitant members at lower price points and slowly nurture them upward to higher tiers that offer more value. In short, people can upgrade as they want more value.

In many cases, to grow your audience, you’ll have to offer free content with opportunities for individuals to upgrade if they want to get more value.

This is very similar to the subscription business model that can upsell and cross-sell subscribers to increase their subscription value. The difference here is that for a membership model, an upsell or cross-sell is that it isn’t a one-time add-on. Higher tiers stack up benefits over time as they provide access to a host of new content or offerings. Some membership sites can even offer a lifetime membership where one can pay once for a lifetime of access (we’ll see an example of this below). Some, on the other hand, may offer a free trial of a higher tier.

A membership portal to track progress in membership

Members need a portal to keep track of their membership site and membership fees. This is the “site” part of a membership. For members to access their content, upgrade their tier, or access a community or forum, they need a portal. Many membership site platforms like Subbly make it easy for business owners to create portals for their customers.

Trials and discounts

Giving trials, discounts, and freebies are common to the membership model to sweeten the deal for members and re-engage them. A key growth lever for your membership business isn’t just gaining new customers but keeping the ones you have. To do this, periodically send “gifts” or promos to members that give them exclusive access to deals, new offerings, or information.

Affiliate opportunities

As members engage more and more with your brand, they’ll likely talk about their membership to their friends and family. This is word-of-mouth marketing, and it’s one of the most effective advertising strategies for an online business. So how do you increase word of mouth? One way is to offer affiliate opportunities to members. You can give them a unique link to share around with their network. If people use the link and end up purchasing a membership, they’ll get some kind of reward. Morning Brew, for example, offers merch for people who share their newsletter emails with others.

Different types of membership sites

Recall the pricing models and tiers we outlined above. The type of membership site you build will likely use one of those pricing strategies.

You can always expand into other pricing strategies as your membership business grows. Many sites do this to continue delivering value to their members and upselling them to the next tier.

With that said, let’s outline several distinct types of membership websites:

1. Online learning and training membership sites. These membership sites offer curated and original content geared towards helping individuals learn specific skills or gain certain knowledge. You’ll likely come across many online learning and training membership sites in your career. If you have a niche skill that others want, this kind of membership site is very accessible to create. 
2. Membership sites that curate and publish content. Similarly to training sites,  membership sites that curate and publish content may be broader than a specific training site. They can be an entertainment membership site or an educational one. What’s common to these online businesses is that they offer exclusive content not found anywhere else for their paying members.
3. Recreational and fitness memberships. We’re all familiar with gym and fitness memberships. Some gym memberships simply give you access to a space with equipment, whereas others offer custom training classes and even private individualized classes.
4. Service-based memberships. The best way to describe service-based membership websites are agencies or lawyers that are on retainer. For a predefined fee, customers can call on you for your services.
5. Coaching membership sessions. A coaching membership site is similar to a training membership site but requires more one-on-one time with members. Just like a personal trainer within a gym membership, you’ll work alongside your members to help them reach their goals.
6. Membership sites that offer exclusive access to products and services. These membership sites offer products to anyone. Nobody has to sign up to be a member to purchase them, but the company offers exclusive access to new products and discounts for those who are members. An example is makeup or cooking membership sites with cookbooks and generic makeup but specially curated boxes for members.
7. A hybrid combining two or more of the above. There are many variations of a membership site model you can create. There are many examples of companies experimenting with several of the above. For example, one company might have a training site but offer one-on-one coaching as a higher tier.

You can see there are many ways to start and grow successful membership sites. Membership and subscription website templates are a good place to start, but to make it more concrete, let’s look at real-life examples of membership website ideas to inspire your own membership site.

Best membership site ideas and examples

Below are some of the most inspiring examples of membership sites.

Online learning and training: Pencil Kings

Pencil Kings is an art education membership site with tens of thousands of aspiring artists worldwide. Their mission is to make expert-level drawing training accessible to anyone.

Their focus is on digital and print drawing, and they publish tutorials and mini lessons by art directors and designers at reputable companies like Marvel, DC, and DreamWorks.

Their strategy for growth is a simple playbook to follow. Although it’s simple, it takes time to build, and Pencil King has done well building a reputation that surely leads to loyal members.

• Start by offering free content or a free trial. Pencil Kings has a blog and podcast for those interested in learning art. Maybe you could start your own subscription box podcast?
• Offer one-time purchases of online courses. For eager learners that want to cut their teeth and see if drawing is for them, they can purchase any course from their library of original content for only $15.
• Offer full access to all courses. For dedicated learners that want to invest in their growth, Pencil Kings offers lifetime access to all their courses on a paid membership site for $499.

This is an expertly crafted marketing funnel for an online membership site. If you’re planning on offering training on your membership site, Pencil Kings has, and is continuing to, execute a great strategy worth copying.

Curating original content for members: Trends

Trends is a lucrative community and newsletter that sends out a weekly debrief of the latest rising trends and business opportunities. Along with a membership, they offer exclusive access to live lectures led by expert professionals, their database of 700+ small businesses, an invite to their private community, and more.

Trends also sends out proven business ideas for you. If you find yourself full of energy for action but no ideas, Trends’ subscription newsletter curates ideas for you with no effort on your part — all you need to do is execute!

To hook new members, Trends offers seven days of full access for $1. It’s not quite a free trial, but members can cancel at any time, so the commitment is very low. After that seven days, it’s $299 a year for the membership fee.

Their membership model is in stark contrast to many organic growth models that advise businesses to provide free content with an upsell to more exclusive offers. With Trends, you have to pay to get access.

In a time where there’s so much free advice, the barrier to entry catches the attention of their target market. It fans the flame of desire and makes their membership even more exclusive and desirable. For your membership site, if you can build enough credibility, you too, could put a paywall up right out of the gate.

Recreational and fitness memberships: Peloton

There are a plethora of fitness membership sites to draw inspiration from, but Peloton offers one of the greatest stories for successful membership sites. They offer a fitness app with guided courses, bikes, treadmills, and additional products like accessories and merch.

Although they’re a large company, their growth tactics offer a lot to learn from. Let’s look at the fundamentals.

• Community. Much of the craze about Peloton is the community all members have access to. Their in person workout classes feature thoughtfully curated playlists, expert coaches, and a room full of like-minded people. If virtual, they also offer online forums to connect with peers and engage in their fitness content.
• On demand and in person content. The exclusivity of their content helps Peloton stand out from other fitness memberships. Wherever and however you’re working out, Peloton has content for you.
• Tiers and financing. Peloton equipment is pricey. But Peloton knows they can get members in at low price points and move them up to different tiers over time. They offer financing for their equipment, and 30 days trials. This is a great reminder to offer low barriers to entry with different tiers.

Peloton may be a publicly traded company, but there are many fundamental lessons you can learn from to grow your membership site. These tried and true strategies got them where they are today.

Service based membership: Handy

Handy is a home services membership that makes it easy for its members to find vetted professionals for virtually every home service. They partner with leading consumer brands like Walmart and Wayfair to make it easy to purchase home goods like furniture or plumbing and then have someone come install it. For a weekly, or monthly membership, members can easily manage all their home services.

Handy’s competitive edge is that it’s convenient, reliable, flexible, and you know you’re getting an experienced contractor. They also offer a two-way membership where they can connect professionals looking for reliable work to service their customers.

Handy is a great example of creating a membership site that’s the middleman between two groups. If you find yourself craftily connecting different groups together for services, maybe a membership site that facilitates it like Handy is for you.

Why should you start a membership site?

Starting a membership site is a great way to build a sustainable online business that generates revenue consistently. There are dozens of membership site ideas and examples we could unpack further.

The goal, however, was to give you fuel for your inspiration for your own membership website. Now ask yourself some questions:

• What membership sites stood out to you?
• Can you see yourself starting any of them yourself?
• Do you have an idea you don’t see reflected above?

Wherever you’re at now, deciding to start a membership site is a big feat. In order to make sure you’ve got all your bases covered, it’s critical to have the best platform to run your membership site – alternatives like WordPress membership plugins are much more fiddly.

For that, you need Subbly.

Subbly’s subscription-first platform helps thousands of businesses grow their revenue while simplifying billing, making it easy to build a website with no coding experience, manage shipping and logistics, and marketing. Get started in minutes.