How To Grow And Scale A Successful Membership Site (with Matt Inglot from Tilted Pixel Inc.)

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Ben Aston

Welcome to the Indie Media Club podcast. I'm Ben Aston, founder of the Indie Media Club. We're on a mission to help independent, bootstrapped media entrepreneurs succeed, to help people who create, promote and monetize through content, do it better. Check out indiemedia.club to find out more.

So today I'm joined by Matt Inglot and he is the founder of Tilted Pixel. They are a membership website strategy and development services company. Now I know Matt personally because he's helped us develop our own Digital Project Manager membership. So I know firsthand, this is a guy who really knows what he's talking about.

And today we're talking about membership, about how to do it better. So keep listening to today's podcast if you want to find out how to learn, how to grow and scale a successful membership site. Hey man, thank you so much for joining us today. 

Matt Inglot

Thanks so much, Ben, for having me on. Good to see you again.

Ben Aston

Yeah. So I'm wanting to kind of go back to the beginning with Tilted Pixel was a development company and you've pivoted for the past few, quite a few years now, actually into focusing on helping people develop all ideate membership sites, grow, develop membership sites and really you've built out this membership capacity to serve people who want to build memberships. Tell me about how you decided to go down that route. How did that start? 

Matt Inglot

Yeah. It happened very organically and the road was not at all straightforward. It's not at all what I expected. So going back 15 years now it started as just me freelancing, trying to pay for my tuition and trying to get through school and I happened to know how to build websites. So it was either a build websites for people or start flipping burgers. And so I went with websites and yeah, I was just a stereotypical freelancer building websites and, you know, underselling them massively but making lots of money as far as being a student goes and over time we sort of fell into it by accident. So even though this started as me freelancing, I always kind of knew I wanted to build it into more of a business. I always, I wanted a business. I wanted something that I could build. And what happened is I started hiring people while I was still in school and getting an office and everything. And eventually, we would end up with a few clients that had some sort of digital product business. And I found those to be the most exciting ones to work on because I've had my own digital products I was playing around in that space even before starting this and it's just such a cool, fun, interesting world.

So those are the clients that I always enjoyed working with the most, but at that time I still saw us as a web development company. So I took tons and tons of other clients on like the amount of sites that we built that were just like your general, like, go here. Here's the homepage, here's the services. Here's how you contact us tons and tons of those and they just, they were fine, but they just weren't as exciting. They weren't as interesting and maybe most importantly, I found we were just didn't have as much of an impact for the clients cause like, let's say you're a concrete company, for example, your website's kind of important, but it's not nearly as directly tied to the success and growth of your business.

It's just something you kind of almost have to check off the box and say you have, and there's like a minimum standard that you meet need to meet. Whereas these businesses, it was so different because the more we kept working with those business owners, the more they actually needed us. And the more we were actually able to contribute to their success and it started as a purely development thing. Like let's build new features, let's build new functionality and then very quickly it became more because I started seeing the patterns between different clients and seeing what was working and seeing what wasn't and fast forward a lot for years, we've just done it enough now that we just kind of know what works and what doesn't, and obviously we're always learning and expanding that knowledge, but that's what I think gives us a very interesting advantage is it's not that I've built one successful membership site. It's that we've actually worked with a lot of clients who have built six and seven figure membership sites, and we kind of have to blueprint for it now.

Ben Aston

Awesome. So, I mean, tell us a bit about some of those memberships that you are helping to architect to strategize and then build an implement.

Matt Inglot

Yeah, absolutely. I mean, we've done so many interesting sites and they've been in a lot of different categories. So one I particularly like is Stock Photos. So you sign up and you get a membership to continue accessing a library of highly curated stock photos. And we've done a similar thing in the Craft Space. We've got clients in the finance space, like investing and stock information and things like that.

That's a really cool niche because that information changes constantly and that's really well suited to a membership model because you always need the latest content. You always need the latest market updates and so on, and, yeah, that was like one of the earliest spaces I was involved in. So it's been really fun to see that evolve we've done hobby things like Gems, for example, and similar types of things. It's anything where people are willing to pay some sort of regular fee in order to access information, access a community, access something that is able to provide them ongoing value. 

Ben Aston

Right. I mean, let's dig into that a bit. So, membership, a successful membership site is all about people being willing to pay for access to something that they perceive as being valuable. So. What are the types of things that you found are most successful from? And let's look at it from two different lenses, from an acquisition perspective and a retention perspective. What are those things across the board that you see that people are generally willing to pay for access to that helps acquire new members, but also helps retain existing members? 

Matt Inglot

Yeah, absolutely and I'll start with retention cause I think acquisition, as far as the membership model goes is actually easier but it's the retention that's really important and that can be, it goes back to the idea that your membership site has to be able to create some sort of ongoing value for people. That's really important where you see membership sites wipe out a lot and end up with really high churn rates and just struggling is they might provide amazing, beautiful, informative content, but it's stuff that never changes. And basically people join your membership site, usually to solve some sort of problem, right? And they might not always articulate it that way, but there's a yearning, there's a desire. There's something that they want to achieve and if it's a consumer, usually get better at something, whether it's advancing their career, advancing their hobby or something else where it's a business, it's access to knowledge or some sort of resources like Stock Photos are a great example. Which is why like that it's just such a natural recurring membership.

But it's that problem they're trying to solve but the promise is if you're a membership site, doesn't, if it's not a problem with that needs an ongoing solution, then it's not much of a membership, right. So people wipe out because they'll create a course and they'll say, well, I'm just going to charge people, you know, 20 bucks a month for access to that course and what's going to happen is that's going to work great for three months. And by then the person will have either gone through the course, or they'll never go through the course and they'll eventually canceled their membership.

They're not going to keep paying that monthly fee and that's where like the savvy membership sites are either based around content that does change, which again, the financial space is awesome or that, I mean, there's an entire industry of new content that gets produced every single day because the markets are always changing, right? So that's fantastic. Or they go and produce really strong communities, or even like tools and functionality that people can use. So that it's an ongoing it's an ongoing experience rather than I've solved my problem and that's, and now I no longer need you. And that's why I say like, retention is actually harder than acquisition because for acquisition it's like selling any other digital product you have to solve a problem for somebody that's willing to pay for it, but because it's a membership, it's actually easier because that upfront fee tends to be lower, right? If I can get you to sign up for a membership site for 20 bucks, well, that barrier is pretty low and you can sign up and you can grab all my content and then, you know, some people well will cancel and they'll cancel very quickly if that's all there is. Yeah. 

Ben Aston

So, you gave some really good examples there of financial information being something that has I mean it's constantly changing. Therefore people want access to it, stock photos, they keep on adding more photos to it. People keep on needing stock photography are there tell let's dive into more into what doesn't work. What have what type of information have you seen membership sites try to provide people or what resources have you seen membership sites trying to update and stay you know being an ongoing helpful partner to people solving their problems but just has failed for whatever reason. Maybe because it's not fresh enough or because it's too hard to keep producing this fresh content where we've talked about the things that work what ha what hasn't worked? 

Matt Inglot

What has it worked, ultimately comes down to this problem set don't need an ongoing solution? And the best illustration of that comes back to courses. I love courses and you can make a lot of money in the Course Space, but of course, doesn't always have to be a membership site. Sometimes you can do much better selling the course for a one-time fee than you ever will for a membership because if you charge someone 20 bucks a month for access to a course, and they cancel on three months, you've gotten $60 from them. 

That same person might be willing to pay three, four or $500 for your course one time. So it's a massive difference and where I see people again, struggle is they'll say, okay, no problem I'll go create more courses and I'll basically become the Netflix for XYZ, right? Whatever problem it is that they're solving and Netflix has an amazing business model because we basically, entertainment basically is an unsolved problem. If you solve my entertainment needs today, I'm still going to have the same needs tomorrow and that same need the next day, right? 

So I'm always going to, we basically have an insatiable appetite for entertainment, and that's why Netflix's model works very well. But you don't necessarily need an endless stream of tutorials on, let's say Photoshop, right? You've learned it or you haven't, and that's basically it. And at some point, what happens if you adopt that model, as you keep adding to your course library thinking, Oh, if I just keep giving them content, they're going to stay. They're going to want the latest content. 

The reverse is actually going to happen. You're actually going to overwhelm them. And you're actually going to get them turning faster, because you're going to get people joining on day one and there's, you know, now there's a hundred courses somehow related to Photoshop. Who can go through all that? And then every month, there's another one, and another one, and so that's detrimental to the member, but it's also detrimental to you. Because it's extremely expensive to produce that content and therefore extremely expensive to run your site and that those are just scenarios where you either have to pivot that model and find another way to provide recurring revenue or you have to be okay with saying maybe this isn't a membership model. Let's charge 300 bucks for this course and then when we make the next course, let's charge 300 bucks for it as well. You'll make way more money and you'll be working a lot less.

Ben Aston

Yeah. So it seems that the most successful memberships that you've seen are information-based memberships or asset resource-based memberships, where we were able to continually solve people's problems. One thing you haven't really touched on that I'm curious on is, and I see this kind of as a different category information that changes assets that you keep needing the community side of it. Which where we facilitate people, where we bring people together and maybe the community itself becomes something that's worth being part of because in that community, they find solutions to their problems. Tell me about what you've seen working with that model and what doesn't work with it. 

Matt Inglot

Yeah. Community is probably that third one and I think we even did mention at the start, but admittedly, not very much. Yeah, absolutely. Community is another thing that people are willing to pay ongoing access to and communities are particularly challenging, I'll say because you get this nightclub problem where no one wants to go to an empty nightclub, right? So that's why you have this, you know, nightclub promoters. They'll have people like lining up through like, you know, all the way down the block and it's empty inside because they need a certain amount of people to go in there for it to actually be an enjoyable place and it's the problem of a community.

If a community doesn't have a lot of people, then there's no exchange of ideas, there's no participation, nothing really happens. But how you do you get that critical mass? The nightclub promoters again, they form a huge line and then get everybody in there at once and they basically try to make it look like the most popular thing ever. You kind of have a problem with your community that you, if you don't have like that beginning critical mass, then it kind of tends to fizzle out or never really get off the ground. And you'll end up with a very small group of people, occasionally posting something, but maybe you'll get a couple posts a day or a couple interactions a day and it's clearly just, it's not what you envisioned in your head, which is probably much bigger and more interesting. And it is, I'll say like one of the biggest challenges. And the thing that I've seen work for that is couple of strategies. Ideally you start off with just a community that's already successful and you bolt on some sort of paid membership to it. That's perfect because you already have a ton of free users. It's already one of the popular places to be, and now they can buy some sort of premium membership and get some sort of premium access, whether that's additional community functionality. 

They don't have access to like private forums or just status or anything else like, one of the biggest, possibly the biggest aside from Facebook, maybe community site on the internet is Reddit, right? That's a giant community. And they have something called Reddit Gold where you can gift people additional perks and stuff or if I think possibly buy it for yourself as well, but it doesn't really stop you from using Reddit if you don't have gold and yet they make tons and tons of money off gold because you get those extra perks and things. So that is probably the most proven model is already have a free community that's doing well or start one, if you don't and then bolt on those additional features and that's a little well, quite a bit easier than just trying to build from scratch and having something paid. Two other things. I'll give you two other things on it should work actually. So one is if you have a big audience, that really helps to be honest, if you're starting a community from scratch. If you don't have a community, the next big best thing you can have is a big audience, because then you do have that power of basically waving your magic wand and because you have enough followers, enough people paying attention, that club will fill up right away. And therefore people will be interacting, they will be engaging. And you'll basically have a community overnight where again, if you don't have that email list or some other source of an audience, then you lack that ability to create that immediate powerful effect as you can't just have members dribbling in month by month and hoping you'll reach critical mass because you'll be losing them faster than you get them.

Then the third thing is go high end, right? So, instead of trying to create like a general community and charging very little for it, is to create a small community and charge a lot of money for it and that's a model that's actually become really popular in the last few years. I mean, it's always existed, but it seems like everyone has that and it's usually branded as like some sort of mastermind. But you get a bunch of people together that pay a lot of money to access it and now it's a small group, but it's a heavily invested group. And I mean, I've been part of them I mean, there, there is there's communities that'll charge like a grand a year and they'll be like a hundred people or there's communities that'll charge like 10 grand a year and there's only 20 people, but it's 20 people that you're heavily invested in, connecting with and for those, you don't necessarily need a giant audience. You don't need, you don't have that whole nightclub issue. You just need to be connected enough that you can curate the right people, get them in the room and there you have a community. 

Ben Aston

Yeah, that's great. So we've talked about different types of membership resourced based in memberships information-based, you talked about community-based. Broadly speaking in the membership space though, as you've seen it evolving. And I would say that becoming increasingly popular over the past five years or so. What have you seen as things that have begun to work better or things that are working less well? What's changed in the membership landscape that you've seen over the past five years or so?

Matt Inglot

I'd say the biggest thing is I'll call more alternative membership models. And this whole idea along with ads become easier to pay for things online and people are more willing to pay for things online.

So the biggest membership site that I can think of that people don't even necessarily think of as a membership site is a site called Patreon. And that's this whole idea that you can now pay a few bucks a month to artists that you just want to support. An artist is like this incredibly broad word, a lot of YouTubers, for example, use it.

So if you want to support a YouTube channel, what are things that you can do is you can donate a few bucks a month and in exchange you do get value cause you get like little perks or you get access to some sort of community or something else in addition to your money. So it's not a true donation, but it's been so interesting because up to that point, that donation model like just stunk, like it really did. Like if you ever put a PayPal donate button on your site, like back in the early blog days, no one used that. No one gave you money and now suddenly Patreons become so cool and everyone's using it. And now like you'll have YouTubers that are getting tens and tens of thousands of dollars coming in via Patreon with relatively small audiences like we're not talking like PewDiePie or anything here, but people have like a couple hundred thousand YouTube subscribers. We'll just have these giant Patreon incomes and they're all based off this like micro model where people can pay a few bucks and it's partly, it's become cool. Partly it's just become easier because Patreon handles all the challenges of collecting a few bucks from someone and when someone signs up for Patreon, chances are they're going to support more than one creator. So it just removes a lot of payment friction and at the same time, people have just become way more willing to do it. And similar to that as paid newsletters, again, these things have existed for ages, but recently they've just become this hot, new thing.

There's a bunch of new services for creating these newsletters easier, more and more email services are following suit, adding paid subscription capabilities. So you can just get paid for writing your newsletter, right? And get, and that's fantastic I think, because people are seeing the value of that and creators can actually get paid.

Ben Aston

Yeah. And I think it was a great, I mean, the hustle is a great example of that and substack have a platform like dedicated exactly to that. I think there's another one called Ghost, which is a bit cheaper, but yeah, if you, the new blogging is paid newsletters, I think which is a really interesting membership model, which is actually really quite easy to maintain but I'm curious to know, I'm obviously you worked with a whole bunch of different membership sites. 

There might be people who are listening to this who already have a membership site. I'm curious as you ask, well, maybe evaluate different membership sites as you kind of analyzing what the quick wins are for membership sites that you strategize with. What do you consistently see is the big wins or the low hanging fruits for people with membership sites? Where, what are the leavers that you think a membership site owner can can trigger or pull to generate quick wins, low hanging fruit across the board?

Matt Inglot

Yeah. So there's definitely a few that we look at so obviously every site's going to be different, but if we just pull up a random membership site, there's a good chance, almost certain chance that you're going to find value in at least one of fees, right? Most of them are doing some of these right and some of these not so right, which is music to my ears because that's pretty opportunity rise.

If you've optimized everything to the level of Amazon, it's a lot harder to create lens, but most membership sites aren't there. So. A few examples one is billing frequency, which was one that was really surprising to me because it's a result that I didn't expect and the only reason I know about it as having been involved in it so many times now, and it's the fact that usually when you go to a membership site you'll chart, you'll see you have the option to subscribe monthly, or you can have the option to subscribe yearly, usually at some discount, like 20% off. What we've done over the years as we've calculated the value of monthly members versus yearly members over lots of different membership sites and going back to years and years of data. And we conclude, we consistently found that a monthly members were probably about half of a yearly member. And again, it'll vary between sites, but that's usually the ratio we find and because of that difference, right? Between the value of a monthly member, cause they're just going to cancel sooner and a yearly member almost always it actually makes sense to just get rid of the monthly membership. Take the loss and subscribers because you'll more than make up for it by huge sums of money with the yearly plan and like most of the time that works really well. 

Other things pricing in general is usually not optimal so there's deciding on a price, but there's also deciding on membership tier. So people will sometimes do like bronze, silver, gold, or something like that. And those are usually created pretty arbitrarily, right? The membership site owner, I'll just sit down one day and come up with, okay, bronze people get this, silver people get this, gold people get this and I mean, that's one way to do it, but the problem is that doesn't really have anything to do with who actually is your audience and what are they willing to pay for. And what we usually do is we'll go back to first principles. We'll actually talk to the audience. We'll do customer interviews, we'll survey them and we'll try to map out who is actually in this audience and we'll usually find there's a few groups and usually those groups have a different enough problem or severity of problem, and a different enough willingness to pay to solve that problem, that you can build your tiers around that. So, the example I give that's fictional would be like a car repair site, a person fixing their car in their driveway has a very different willingness to pay and a different problem than a professional mechanic or someone studying to be a mechanic, like person that driveway just needs to know how to do basic things and how to do it on one model of car.

Whereas a professional mechanic needs to do more advanced things and they need to do it on a lot more cars, right? So you can see how it's a very different audience and that can often lead to a different segmentation, which can then lead to different tiers. And then, I mean, I could keep going. I'll give one more, but we can keep going into it. But email marketing is usually a pain point for a lot of membership sites and it often starts with collecting emails. So, a lot of membership sites will either not be collecting emails or they'll do something that's relatively weak, like sign up for my newsletter.

The problem that is your email list is usually the source of your sales, right? It's actually a funnel. So people come to your site. Some of them might sign up for your membership right away, but most of them are going to go to your newsletter first, right? It's the lower hanging fruit, it doesn't cost anything and then through reading your content, they'll eventually get to know you, like you and sign up for your membership. So if you're not doing enough to attract people to your email list, unless your website's so good, that they're all signing up for your membership right away, you're losing a ton of perspective people. And then following that, of course, getting them to sign up is not enough. It's important to have a really good nurturing sequence that's hits on all the points you need to hit on so you're actually moving them along in this idea of knowing you, liking you wanting to solve their problems through you and signing up.

So, these are all things that honestly I'm not going to say they're not a lot of work because it takes some effort to uncover, but like you can experiment with monthly versus yearly overnight, basically and then some of these other ones it's a lot easier to do these things and get them right than to try to get more traffic.

Traffic is always the most hardest and most expensive part of the equation. So the more you can be doing to get everything you can out of every single visitor to your site, then the more successful you'll be and then the easier it will be to pay for traffic or get more traffic because that traffic's worth more to you.

Ben Aston

Right. Yeah. So I think that's such good advice in terms of yeah, filling the holes in the leaky bucket before you start trying to pour more water into it so that you yeah, figuring out your retention issues and make sure that you're actually converting people before you start putting oil on that fire and just seeing 'em, start spending a bunch of money on Facebook ads and they don't do anything. So I'm curious that you're talking about changing your billing cycles, changing your pricing tier, filling holes in email marketing. You've talked about and from a strategic perspective as well, you know, making sure that we're actually fixing through our membership people's problems because people are willing to pay to have their problems fixed. And I think at the heart of what membership is all about, that's what the theme has been today. Whether or not that's an entertainment problem you have a, and so you want Netflix, whether or not that's then financial information problem you have, which is why you subscribed to your financial membership, or maybe it's tech news.

So you subscribed to the hustle or another paid newsletter, but in terms of deciding, I mean, there's loads of different things you can do to try and improve and grow and scale your membership but how do you decide on that first thing, the most impactful then? Where do you start in prioritizing these different things that we could fix, that we could change? How do you groom that backlog of items and prioritize them? 

Matt Inglot

Yeah, absolutely. And that's really important because as you said there, there is a lot. So I'll tell you what we do and then I'll give you a couple of shortcuts. So when we come in, there's a few things that we'd look at. First of all, we do our audience research.

That's really important to us that goes back to first principles. We don't make assumptions there. We want to survey the audience. We want to talk to them. We actually want to find out who those people are because oftentimes the membership site owner, either hasn't done that, or they're not asking the right questions, which means they're getting answers that the people being asked the questions think you want versus the real answers and the real truth.

So we want to get to the heart of that and then for us, there's a couple other things we do. We look at a whole bunch of financial metrics and that's probably the one that's hardest for someone listening to this podcast to replicate without us, because we find, unfortunately, a lot of membership platforms don't do a great job of it. They'll give you like an overall churn rate. That's maybe correct. Maybe it's not, but there, there is a lot that they're not calculating and they don't give you any means of diving deeper into that information, but we look at things like customer lifetime value.

 We look at churn, we look at how those change among different audience segments and we try to start saying, where does that financial piece break down compared to what we expect to see our conversion rates really low is turn really high. Do we think the customer lifetime value feels low compared to what you should be able to get in this particular segment? There, there is a, there was a lot of looking at that to give us clues about where the weakest parts of a site are. And then we do a qualitative aspect as well. We just objectively look at the site and we have a general sense of what's probably had a lot of effort and time put into it and what hasn't. If your email opt-in is sign up for your newsletter, then that's a red flag for me that's probably an area of interest.

I bet you, if I looked at your opt-in rates, they're probably not very good. And there's probably a lot of opportunity to improve that by having a very specific lead magnet. So something they receive when they sign up for the newsletter and a very specific call to action. So instead of sign up for the newsletter, you know, get my top 10 tips on how it affects X, Y, Z, where XYZ is the exact problem people are coming to your site to fix.

So that's sort of qualitative judgment is really important and it really informs our work as well. And those are usually like the three big areas we look at. And if you're trying to look at your own site certainly it's a little bit harder because I mean, one, you're sort of in the weeds of it all, and two, you might necessarily not know what to do in all these steps.

So a couple of shortcuts are, one is try to look at it qualitatively first Where have you spent the least amount of effort? You've just listened to this whole podcast. What stuck out to you as, Oh, I should do that. That's probably a good chance that might be a high value area to focus on because then you're basically starting from scratch, right? And then the second thing is I think everyone should be serving their audience and talking to them. And some data is better than no data. So start asking questions. You can send out a survey tomorrow to your whole list. You can present people with surveys when they first sign up to the membership site, you can survey them again in six months and in 12 months, there's entire customer feedback chains that you can create, but just get some data coming in and start using that to inform your decisions as well.

Ben Aston

Yeah, a hundred percent. One of the things that we recently implemented on our membership was immediately after someone's signing signs up, ask them the question, Why did you just sign up? It's a really, it's a really obvious question, but I think sometimes we can be blinded by hooray someone signed up.

I've got another member and actually what's more useful in terms of retention is finding out, okay, well, what was it that caused this person to sign up is what we're creating in the membership, actually going to meet what they're looking for. So it's interesting from an acquisition analysis perspective, but also in a retention perspective.

What's going to keep them here? What were they looking for? So we get people to rank stack the the different things that we offer in the membership. And now we're slowly beginning to get a better picture of what people think is worth paying for? What are the problems that they're trying to solve? And so we can make sure that we're focused on solving those first and really streamlining the membership to be based more around that. So, a little quick type form surveys gonna stop you guessing and anticipating, which I think is what we do too much. And and actually give you some real data.

Matt Inglot

Oh, totally. Yeah. That's a huge one because yeah, you're going to get surprised by those answers. They're either going to give you a completely not what you expected or it's going to be subtleties about them that you didn't expect. And the other interesting thing is those answers may change over time, right? 

A member that just signed up might give you different answers than the member three months into their membership or six months into their membership, because hopefully as they're going through your membership, they're leveling up, their needs are changing and that does change what's still important to them. 

Ben Aston

Right. Now I'm curious one thing that we haven't talked about, but I know Stu McLaren talks about this a lot in his program, which is called TRIBE and he he's a big fan of these membership journeys, which to me sounds quite a lot like a course. But it is trying to it's more about outcomes is memberships that are based on outcomes, which is kind of related to solving a problem like someone joins your membership because they, you know, they want to be entertained or maybe because they want to become a financial coach. Let's just say. So there, the outcome they're trying to get to is I want to be a coach and I want to find, I want to go through the steps, go through the process to becoming that.

So it's kind of like an elongated course but there's a learning journey and we're trying to solve one particular pain point with one persona. And hold their hand through that process so that they go through the process. We know the different pain points they have along the way, and we provide them with the resources, with the community they need to get from A to B are, we are just part of their journey. 

Have you worked with any memberships that are more of that? Because I think you've been kind of pushing people. Hey, if you've got a course, do a course. If you've got a membership, do a membership. If you've got kind of information or assets or community that you are, that you can keep solving people's problem. Have you done any memberships that are based more on this outcomes or journeys?

Matt Inglot

Yeah, absolutely. Freelancers would be one where I worked with, I had my own freelancing products at one point myself, but I also work with another person in the space that had more of a membership model, I would say. It wasn't quite like an infinite membership, but I guess that's kinda the point but even in generally so let's take freelancers. When you get into freelancing, everything is new and you're trying to work it all out and it's very complicated, very difficult and it turns out actually doing the work for the clients is maybe the smallest part of it. I have to learn how to be a business owner.

So, what is that journey look like? So if you want it to go a purely course fruit, then you might say, okay, let's create a course on freelancing. It's going to be an amazing course. It's going to teach them about pricing. It's going to teach them about positioning. It's going to teach them how to find clients and let's go create that course and let's charge a few hundred bucks for it. And you're probably going to be very successful as long as you have that audience. What if you try to now take that course and unroll it into a membership site? What does that start looking at? Well, I'd still make the argument that just trying to relabel a course as a membership site is not going to work. And I don't think Stu is making that argument either. 

He's a really smart guy. But if we try to unroll that into something that could be a membership site, well, what's going to change? You're still possibly going to have some content on how to do all those things, find clients how to price your work and so on but as a freelancer, what would then become more valuable from a membership is starting to be able to solve, for example, your specific problems, like how do I get help on this proposal, right? So you start getting into like a coaching or community aspect of it where people can get help for more experienced freelancers. 

So for example, that goes back to what I was involved in. I did I taught like actual lectures, but I also did office hours and things like that and I was one of the experts that you could access and that was like a very different experience for students versus just having a static course, right? Cause it goes back to the same prompt. If you have a static course, they're not going to continue paying you for it because they have it, right? It's done and if they haven't gone through it in three months, I'm sorry they probably never will. So by having access to like a community or experts, then you've actually got a much bigger chance of succeeding and you've got a very different experience that probably is worth paying an ongoing price for. And then the sad part of all this is, not every membership journey is infinite, which I think is really what you're getting at. So Netflix is pretty much infinite because our appetite for entertainment is infinite. But maybe at some point someone goes from being a beginner freelancer to an intermediate freelancer.

It may be perfectly okay that resource and site is no longer for them. In fact, no membership site has members generally that last forever. What you do is you look at how long people stay on average and you're trying to expand that and you're trying to expand your customer lifetime value. But it's never going to be endless. It's never going to be infinite. That's where people that claim like membership site or some magic passive income resource, I don't really buy into that, right? It's more, they're a very nice business bottle, but you still have people that ultimately cancel and eventually everyone's going to cancel. So those beginning freelancers, they become intermediate freelancers.

If your resource isn't for them anymore, that's fine. But in that case, what do you want to do? You can let them go and that's okay but if you have other offerings, if they can ascend, and they can keep learning from you, then that's even better, right? Maybe you have a higher priced community for people that are now more advanced or that are now agency owners, or you have some affiliate partnerships somewhere where someone doesn't just disappear and fly off, a that's obviously better.

So I don't think the membership journey concept is incompatible at all with any of this. It doesn't mean that you just get to create a course and charge monthly for it and expect that you'll somehow make more money from the course because we know from experience that just doesn't happen. 

Ben Aston

Yeah. I think another interesting aspect of it is looking at your customer lifetime, average customer lifetime duration and thinking through. Okay, well what, how what is that? Is it 12 months? Is it 18 months? What happens during those 18 months? What transformations take place? How can we just accept that as fact this is what happens when they come in and six months later they've something has happened?

Some transformation has occurred. So how can we build the membership around that and embracing that rather than trying to fight against it? I think can be a good way of looking at it. Now, one of the things that, that you've mentioned a couple of times in terms of metrics. It's customer lifetime value.

That's the kind of a main one I've heard you're talking about. So I'm curious for you, what is the best metric? If we have three, three of your favorite metrics for assessing the health for membership site when you're looking at, is this working, is this not working? What future potential does this membership have? What are the key metrics for you in deciding whether or not this is healthy or unhealthy or has potential or not? 

Matt Inglot

Yeah, if I had to have three, I would say conversion rates, customer lifetime value and churn, for sure. But in those three metrics, the one I really care about the most probably is customer lifetime value, because that's the sort of the fundamental metric and it's the metric that most people completely ignore.

So, when someone signs up for your membership, we just had this whole big talk about how that's not an infinite relationship. At some point they will leave and so what you want to be able to do is you want to be able to tell, so from the moment they enter their credit card to when they stopped doing business with you. What is that customer worth? And there's a lot of reasons to know that. One, because a lot of the improvements are going to be making somehow affect this metric in the end. That's the ultimate goal, right? The more you get from each customer, the easier marketing becomes the easier everything else becomes because you have to do less of it to reach a certain profitability, certain revenue number.

So for example, if you're going to mess around with your prices, why are you messing around with your prices? Well, it's probably because you ultimately want a higher customer lifetime value, right? Or possibly like, also conversion rate as well. Five factors into that, right? Can have a really high customer lifetime value, but low conversions is bad too.

But it is trying to get higher customer lifetime value. If you're trying to reduce churn, why are you trying to reduce churn? It's because you're trying to increase your customer lifetime value. Why are you trying to get people to upgrade, right? Why are you producing new content? Why are you doing anything?

Somehow, customer lifetime value is part of that reasoning. And that's why we look at it so much. And if we see a site where the customer lifetime value just isn't adding up to like all the other information we have and what we would expect it to be. Then we know that there's a lot of potential there for improvement and hopefully that means that hopefully that's a good thing. 

Hopefully that means that there's a lot of growth ahead of it. Conversion rates then is probably the second one because you want people to be able to purchase your product at some reasonable predictable rate. So if you get a thousand visitors to your site, how many of those will ultimately sign up to a membership site?

Well, if it's a one person coming to the site out of a thousand, well, then you have a conversion rate there, right? And it's 0.1%. If a thousand people come to your site and let's say, a hundred of them sign up to your email list. That's a 10% conversion from getting them from coming to your site, signing and then signing up to your newsletter. And then of those hundred, let's say one person buys, that's a 1% conversion on the newsletter. If 10% of them miraculously buy, that's great. That's a 10% conversion. 

So it's looking at what percentage of people take action at every step. And if those numbers are too low, then I mean, one, it's a chance for improvement but two, if they're massively low, there could be more fundamental issues there. Like just a lack of product market fit, or you're just targeting the wrong audience because the audience is saying, man, I'm not really interested in that. 

So that's so huge. If you have a site with reasonable conversion rates, then you can usually increase those quite a bit and make a lot more money and then you go and you increase your customer lifetime value alongside your conversion rates. That's how sites grow from having a hundred thousand a year to 500,000 a year. People assume it's because they get five times more traffic. That's not really true. I mean, obviously, hopefully the traffic is growing too, but it's not, it doesn't necessarily have to be a five X increase.

A lot of I can just be achieved by just all of these other pieces. And then churn rate is just the obvious. We talked about how retention is the hard part of a membership site versus acquisition. So churn measures, how many people are leaving every single month and it goes back to that leaky bucket idea.

If your churn rate is too high then you're spending a lot of time and money just replenishing that water in that bucket instead of having actual growth. And it's also very scary because if your churn is high, and your customer acquisition decreases very quickly, you could be in a downward spiral where your membership is actually losing money and members every single month.

So maybe you made a hundred thousand last year, and now you're only going to make 80,000 this year. That's really bad like that sort of death spiral you want to deal with immediately, or you're not going to have a much membership site. And basically like in an ideal circumstance, like you'd want a churn rate that's around 5% or less in terms of monthly churn.

And as you start going past 10%, that's when the alarm bells start ringing. And what's interesting is a lot of membership sites don't meet that criteria. You're going to find memberships, or they have a 15% churn rate, 20% churn rate. And usually there's very specific things going on where you haven't quite gotten that recurring value, right.

It is more of a course model where they'll sign up, they'll learn a bunch of stuff and they'll leave. And when you have a 15, 20% churn, it's just so hard to grow your site because those holes in the bucket are so big. It just gets very difficult. So yeah, those are, those are three metrics and they can tell you a ton and that's really where I spend a lot of my time as somehow tie to those metrics.

Ben Aston

Yeah. Yeah. I think so much of what you're talking about starts with the underlying membership strategy where we're defining, what is the product-market fit? What is the recurring value that we can provide to people that is worth paying for? And I think so often we focus on the marketing the market message fit because that's an easier thing to fix, but it's not rooted so much in the fundamental insight of the product-market fit. And so, as we're thinking about our memberships, I think it is so worthwhile taking the time to understand, okay, what are the, what's the value that we can provide?

What is the customer needs that we're going to address? Can we provide enough recurring value to that need, to address that need to make this membership worthwhile in the first place? Then we can start thinking about what are we talking about this in the right way? Are we communicating this effectively? And then we're going to see those changes to the metrics. Then we're going to see the customer lifetime value increase as we're able to retain longer as we able to price it better. As we were able to reduce attrition and our churn rates, because people aren't leaving because they're not surprised by what they get in membership, we'll find they don't use it.

So thank you so much, Matt, for your insights there. I want to close off with a lightning round and I want to know what's the best advice that you've ever received.

Matt Inglot

he best advice I've ever received. Yeah, I mean, that's a hard one because obviously there's just so much out there, but when, you know, a few things come to mind and I think one of the better pieces of advice I've received, this one that I didn't understand at the time, which I think maybe is sometimes how it goes, but I was being advised by a gentleman that had sold a pretty massive business and was now advising entrepreneurs. And he talked about the importance of telling a story around whatever it is that you're selling. And I kind of sat there and I smiled and I nodded yeah, story's important and everything. And it took me years to really understand what he was saying that it's about more than just saying, okay, I'm going to go ahead and start a web development company, for example. 

You have to actually build a story around why you're starting this web development company, who your customer is, how you're going to help them and start attracting this group of like-minded people that really want to work with you. And that really feel like you're the right fit for them. And that in turn allows you to stand out from the crowd. And I bring this one up in particular, because that is as important as that is in the agency space. It's probably 10 times as important in the membership space because it's so influencer focused, right? Which is somebody who's like new buzzwords, but it is usually people gravitate to either like a certain individuals persona or a certain brand persona and the ones that do really well have a fantastic story behind them. 

There's a real reason for people to rally around them to believe that they're the expert, that the ones that can do it. For example, one of my favorite websites, once I kind of clued into this whole story thing has nothing to do with membership sites, but it's called Saddleback Leather and I keep coming back to it as just like this fascinating site. So you get to this site, it sells leather products and they're big, they're heavy, they're like very old school and they have a tagline that says they'll fight over it when you're dead. And the idea is that these things are so tough and so strong that they're going to outlive you and behind that they just have pages and pages of story of how this brand started and why they're making these things.

And because of that, like they've transitioned from just like an apparel brand to really like just this community of like-minded people that are just into the super tough, super rugged, somewhat impractical I'd argue, leather goods. And it's just so cool and I mean, I mean, I own one of their briefcases and it just, it's just so fun and that's so powerful versus you just starting a website and saying, Hey, I sell a really tough quality leather.

Why should I believe you? Why are you different than anyone else and everything else that I've done in my career ever since closing into that lesson, I've actually paid attention to that. Like not just for myself, but for my clients as well and I think it's just an under utilized and really key piece of advice for business owners.

Ben Aston

Awesome. Can you share, and maybe membership-related, an internet resource or tool that within the world of membership that you use regularly?

Matt Inglot

Yeah, absolutely. So a tool that we use a lot is called Psychometrics. And it's a really interesting tool because I talked about getting things like churn rates and customer lifetime value, and some of the difficulty around that. What is cool about this tool is it'll connect across all the different pieces of software that you use and it'll combine that data and merge it together. So the most important thing it'll do is if you're using a supported payment platform like Stripe, for example, it'll take your data in Stripe, all of your payments and it'll merge it with whatever email system you're using, like MailChimp, Drip, whatever it might be. And that way you actually have a ton of really difficult to get information about your members.

 So for example, it'll tell you customer lifetime value, but it can also tell you customer lifetime value for a particular tier. It can tell you customer lifetime value for people that signed up for a particular offer. It can tell you the performance of a particular offer. It can do all of us deep data analysis. That sounds like it should be easy to do, but basically before SegMetrics, it was all Spreadsheets and like all sorts of weird stuff we are doing in order to get that same information. And that's just made it so much easier. So it's not the cheapest tool in the world, but if you're making any sort of real revenue of you're membership site, it's a game changer for being able to do any of the things that we discussed today.

Ben Aston

Cool. I want to ask you, what are the membership platforms that you rate most highly? Some of them, some that spring to mind that are very popular in the, that I see being banded around are things like Podia, Kajabi, 19 networks we currently use MemberPress, we use Circle, but I'm curious, where do you see any correlation between the platforms and the success of membership? What platforms out there are really good and that people should take a look at? 

Matt Inglot

Yeah, it's a tough question. So I'm going to weasel out of it a little bit and talk in generalities. We're actually a surprisingly platform agnostic. And I don't necessarily think there is a single platform that is the right solution for everybody, but let's look at your general options. So the first set of platforms you have is what I'm going to call like the SAS platforms, the one that do it for you. And that's where you had mentioned some, but the ones where you'd sign up and pay a monthly fee and they have everything, right? They host the site, they do the payment processing. There is a nice content editor. You can upload your lessons and whatever else, and then you can charge people. It's a membership site in a box, and that can be excellent.

If your membership site needs are pretty simple and you don't have a lot of technical or design capability and you just want to get something off the ground. Those are the ones that I usually recommend for beginners. And then you sort of go on to the next level, which I'll call Membership site, the easy start where you have you have an existing website, it's built on WordPress or some other platform doesn't really matter. And then you want to add membership capabilities. One option is to install some sort of membership plugin, and there's a whole bunch of them, but another one is you there's actually SAS platforms that will integrate into your site more directly one that comes to mind as MemberSpace. And I will give them a shout out because we've done a bunch of work together but it's very cool because you can keep your existing platform and system and have membership capabilities overnight, and it's still relatively easy to manage. 

And then you do get onto like the proper plugins, let's say usually WordPress based, and then you do get things like MemberPress, MemberMouse, Restrict Content there's a lot of ease. And to be honest, if you, I think a lot of them do the job and then what becomes really important is what are you actually trying to build? And what's going to play most nicely. What if your existing infrastructure and your business model. And that's why when we say, Oh, do you want this? Is this plugin better? That plugin better? I don't know. I honestly genuinely don't know because every person's situation is different and usually the best plugin for you is the one that's going to let you start selling as quickly as possible, testing your business. And then, you know, if you don't like your plugin, I don't care because you can change it, right? Whereas if you don't like your business model, that's a lot harder.

Ben Aston

Yeah, totally. And I think so much of the conversation that I see and hear around membership is around tools and platforms. Which should I use? Should I use Kajabi or Podia and it's not around, is there a product-market fit for this, and how can I test that product-market fit?

How can I test my market message fit? And I think so often the easy thing to choose, or it can feel like the easy thing, because you know, you just subscribe, you've then become a member. You subscribed to Kajabi. You've become a member, anything. Huh? I've done it. I've got a membership, but you haven't got a membership until you've really understood how you can provide that reoccurring value that's worth paying for. So yeah, a good reminder. 

Matt Inglot

And it's totally understandable because we've all been there. I mean, I've been in, I've been there, right. And anytime I've started a new business, that's where my mind used to go, right? Cause you have this, when you're an entrepreneur, I think you're naturally a bit of an empire builder. You have this fantastic vision for your business and you assume that it's so important to get the foundations right. Which it is, but a problem is you're assuming that the foundations is your tech stack. And I guarantee your tech will change over time. So, what's way more important is that you choose something you can be happy with work with. That's not going to bankrupt you and worry about expanding and changing that over time.

 I mean, we had one client that built an impressive business. I'm not going to mention numbers cause I don't know if they want me to but really impressive. And they basically started off with Dropbox links, like, and then just like this like shared password system and like just the most simplest, most basic form of membership that you can imagine. They didn't start with any fancy membership platform. And they built a business that was big enough to be able to hire us to then build them something bigger. So the idea that you're going to stay on one tech stack that you're going to build this foundation that is still going to be there in 10 years. I think there's a fallacy. And it's like you said, it's the other stuff. It's the strategy. It's the product market fit. It's getting that right. It's getting money coming through your door. It's iterating that's way more important. 

Ben Aston

Definitely. Well, Matt, thank you so much for joining us today. It's been great having you with us. Can you tell people where they can find out more about you and what you do?

Matt Inglot

Yeah, absolutely. You said the main site is tiltedpixel.com and what you might want to do is go to tiltedpixel.com/course because that's how you get on our email list. And you will get a series of lessons that dive deeper into some of the topics that we talk today and specifically our aim to deliver some of those quick wins that you can try on your own website.

Ben Aston

Awesome. Well, I hope you like what you heard today. If you did, head over to indiemedia.club and subscribe and stay in touch, but until next time. Thank you so much for listening. 

Matt Inglot

Thanks so much for having me on.

If you've ever wondered how influencer marketing can work for you, here's our podcast on it which we're sure you'll find to be very helpful: How To Leverage Influencer Marketing & Manage Influencer Relationships