In this episode of our Mastermind Series, we are comparing annual versus monthly payment options for your membership, and how you can create a payment plan that fits your income strategy and financial commitments.
We are also sharing, based on our experience, how to deal with the money that you are receiving from your different payment plans and what common mistakes you should avoid staying out of financial trouble.
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3 Big Take Aways
- The benefits of annual vs. monthly payments
- How to create payment plans that fit your income strategy
- How to spend your income from these plans to avoid financial trouble
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Melissa: All right. So let me call on Megan. Next.
Megan: So my question is I was at a BNI meeting this week and someone made a really good recommendation to me. I was telling them that I looked at noon and some of my clients were saying to me, you know, I tried new and you can't get ahold of anyone.And I was paying 60 bucks a month. just wasn't worth it.
And that's why I looked up, you know, finding a nutritionist. But then someone at BNI said to me today, you know what noon does, don't you? And I said, no, what? They said, they offer them like, it's like $60 a month,but it's like $450 for the whole year. Is anybody doing that in memberships. I've seen it done in other things, but so I know nuMe is doing it.
Is that something that you guys would recommend to do or not do in a membership?
Paul: So going from a monthly option to a one-year
Paul: Yeah. So let's open that up as anybody do that and or do they belong to a membership that you're doing a one-year option versus a monthly?
Melissa: Laura?Go ahead.
Laura: So the last two launches that I've done for my membership, I added in the full pay option versus the month.
And that's how every single person bought.
Laura: And I resisted it for years.
Laura: Who knew?
Megan: Thank you. Thank you so much.
Paul: So Laura, I'll tell you, you need to up your price.
When you say a hundred percent of people took the angel.That means there was too good of a deal there. So you could, you need a little percentage there. So you probably left some money on the table. Let's let's go over to Lisa. Thanks, Laura.
Lisa: Yeah, I was going to say that with ours, we did a founding members launch and we offered three.
So you can join monthly,you can join yearly. And then we actually had a lifetime. Now we're never doing a lifetime again. Lesson learned, we had only a couple people take us up on it. So it's not the end of the world. had a number that did lifetime and then we have some that are doing monthly and it's kind of nice financially because it gave us an influx of cash.Those that bought, like I said, lifetime don't do that though.
And the people that joined yearly was nice as well because again, an . Influx of cash. But then now to have this reoccurring amount, every month has been really nice. Now, unfortunately it's not enough, but it gives me hope that we can, you know, have a good mix of both of those.So I would definitely recommend it because there's going to be people that can't afford the yearly amount, but when you break it down into something smaller, it gives it to . Them in easier bite size pricing.
So that's what I would recommend.
Megan: Thank you, Lisa.
Paul: And let's go over to Sarah,
Sarah: Hi there, yeah, I do the same. Can't tell you the exact figures of how many signups are nearly and how many monthly, for me, it's more monthly than annually but last lady said, it's a really lovely influx of a bit more money coming in, in each launch, but then the recurring is great. So I would say it was probably, if I get 60 new members in launch,then probably five or six of them will take the annual option.
So that gives an idea the amount.
Megan: Well, it really varies among everybody, so I'll just let Paul Melissa speak.
Melissa: I think it's good to give people options.I mean, just at the end of the day, it's, it's good to get people options.
I'm kind of like what Laura was saying. Like she didn't have that option before and you just never know where people are financially. And also to some people, they appreciate the monthly because that's something that they can plan for some people,if they have just like the extra cash, they don't want to be on a payment plan.
They just want to have that option. So I don't think it can hurt to have it as an option.
Paul: So I'm gonna just going to get a different, different things to think about with this as well. Cause we've done this in the past with different memberships that we had on one end, what is good about it and it was mentioned is that you do have this influx that comes in and you need to be very prepared.
Melissa: If you have financial commitments that you have ongoing, you need to take that money, put it in a separate bank account and amortize it over the, over the year. Otherwise you're going to spend all of it.And then you're going to be like caught up because we were paying for external things and support teams and things.
And if you'd like spend that money, like it's golden fingers in the moment, you know, cause you don't have that bump that extra bump. Now also what you have is these people sometimes forget that they have a yearly membership with you. And when it rebills,you potentially, you're going to get a lot of emails saying, Hey, I want a refund.
I don't know what this is. Who are you? Why are you scamming me? You know? Cause they, they might've just tuned out through the year so that you just need to make sure that you have a processing set up. We actually recommend that you have a pre email that goes out.That makes them aware. Now, if you do a launch and you know, you have a, like if you are in the launch lifestyle and you are like have a big event and bring a lot of people in and you open up at like one or two times a year, know at that date is okay because you purposely could hold something like an event on the other side of that annual and rebill that is very attractive to the annual people and they have to renew in order to get access to that event.So then what that does, because this is the hard part, is that for all of us, when you get a 30 day payment, what happens is in your mind, psychologically you rewind back the last 30 days, did you get an exchange of value?
Because we all know if you haven't used something in a while or you haven't made time, you're overwhelmed,you feel behind or whatever, you're going to rewind back. The last you don't care. Like if you got the major help, that totally changed your life three months ago, you're looking at the last 30 days and you're like, okay, am I using this or not?
You know, I would say over the years, not re not this past year because of what's happening,but we went in and out of having Netflix through the years until we cut the cable type thing, you know, it's like, are we really on Netflix? But now it's like part of our life. So, but so in a different sense though, also is that for some of you, this is going to be a income strategy that I want you to look at this differently because yes,internally you'll be like, Oh, like some of these, there's a good percentage of these people that are not going to want to rebill.
Okay. But if you, over a period of time, you see that on a monthly end that your natural lifespan of a member is like seven months. Then if you can get 10 months equivalent, cause you made a discount on it.As an example, you're actually giving yourself a three month raise by offering the one year. Because if your average person only stays seven months, does that make sense for everyone?
So it's . Like, so if your average churn of a member is like, they only stay seven months anyway, it's like by offering that option, you are just increasing your average lifetime value of a member just by having that annual option because it was people would have been gone most likely anyway,and you wouldn't have received as much.
So, but I will say is that if you're counting on that annual, like if you're like going towards that finish line and you're like, Oh, there's like 50 people and they're all going to rebill the annual. I'm going to have all this big money come in. Don't spend that money when it comes in,because some of those people are going to have a shocker and some, and I'm letting you know, cause we've done this for many years.
Some of them we're gonna hit you up and say, my mortgage is going to bounce. If you don't put that money back in my, my account, you know, like they just did not plan for it.They forgot about it. It's like a decision they made a year ago and totally out of their head. So that's just the only thing if you're doing annuals, I definitely would recommend that again, you put something that's high perceived value on the other side of that.
And also that you, you send out a reminder email right before rebills that it'll, it'll minimize your chargebacks and minimize your refund requests on that.So hopefully that, that different perspective helps out.