Want a passive recurring income? Consider setting up a subscription-based website. You put up valuable content, your members pay each month, and the site runs almost on autopilot, making you money all the while. Follow these tips to learn how to start a membership site.

Deciding What to Offer

With so much free content on the web, customers don’t pay monthly fees for just anything. You have to provide value — something they can’t find on their own for free. So what should you offer? To figure that out, follow these steps:

• Make a list of niches where you have something of value, such as knowledge, expertise, physical products, or access to influencers.
• Make a list of niches with hungry buyers
• Finally, make a Venn diagram using both lists, and focus on the niches that overlap

Suppose you have a finance background and know lots of places where credit-challenged borrowers can find business financing. That’s a hungry buyer's niche. Many entrepreneurs want to grow their businesses but can’t find the capital to expand. That’s where you come in, offering a membership site that provides tutorials on financing or direct access to lenders.

Why go this route? For starters, once you get this type of site running, it’s much less labour-intensive than one-off services. Even better, as long as you keep providing value, customers keep paying, month in and month out.

For an example of how this works, consider WishListProducts.com. It’s a membership site for membership site owners. Members pay $20 per month and receive access to start-up guides, case studies, webinars, and more.

Building the Site (or Piggybacking on an Existing Site)

Once you have a plan for a subscription-based website, it’s time to build the actual site. You can either build it from scratch or piggyback on an existing website. If building from scratch, start by asking yourself how much you’re willing to spend and whether you have sufficient web design experience.

If you’re willing to spend a little and want to leave the design work to someone else, hire a web developer. If you prefer to keep costs low and don’t mind hands-on work, the internet offers lots of free resources to create your site.

A highly popular website builder is WordPress. Though this builder has a slight learning curve, plenty of online tutorials can help you get around it. One benefit of WordPress is its massive library of themes for a ready-made website layout. Several WordPress themes cater to membership sites. Some themes are free, but others cost a bit, usually $50 to $100. Many well-known membership sites, such as Copyblogger.com, were built using WordPress. If you want to keep your site even simpler, try a drag-and-drop site builder such as Wix, Weebly, or Squarespace.

What if you already have a website? You might consider piggybacking your membership site on it. Suppose you’re a guitar retailer and your business already has a website pulling decent traffic. You could integrate a membership site offering online lessons and tutorials and direct your existing traffic to it.

Marketing the Site

Your first goal is to get your site up and running. Second, make sure you have plenty of valuable content for future members. After that, it’s time to market your membership site.

Marketing is a numbers game. A certain percentage of people who visit your site are going to become members, which means you have two ways to increase sign-ups: get more visitors, and convert a higher percentage of visitors to members.

To get more visitors, your site needs exposure — and lots of it. For higher conversion rates, it needs to draw people in and compel them to sign up. That means your website should be highly engaging. You can also improve conversion rates by targeting the right people with your marketing. Try this three-step process:

• Identify your target customer, namely anyone who needs what your site offers
• Locate that customer, whether online or offline
• Reach out to the customer by running targeted ads on social media, and use Google AdWords to bid on keywords your target customers are searching for.

If you search “diets online,” for instance, the top sponsored result is often a diet membership site or weekly meal delivery service. These companies are positioning themselves exactly where their customers are looking.

Also, don’t discount traditional marketing methods such as direct mail. Done properly, these tactics still work, especially since most of your competition has abandoned them.

Keeping Your Subscribers Happy

The point of a membership site is recurring income. For this, you need happy subscribers who stay subscribed. Otherwise, you’re starting from scratch each month, which isn’t much different from a one-off service.

How do you keep your members happy? Try these tips:

• Make sure you’re continuously adding fresh content, and never stop providing value
• Build a forum or message board so members can form relationships
• Run members-only specials

Consider the Montreal-based membership site BeyondTheRack.com. It doesn’t charge its thousands of members monthly fees. Instead, it keeps those members constantly logging on to shop for products, and it does this by running “daily events” just for members, which involve discounts of up to 90 percent.

Getting a membership site up and running takes hard work, but the payoff is worth it. You can make a passive income for years to come.