Tips and Tricks for Making Money with Interviews

Here is the first in what will be a series of interviews and discussions with membership site owners about how they launch, maintain, and grow their membership sites.  I broke the interview into two parts and this is part one.

I’m new to the membership site ownership game myself so I thought the best way to find out what it takes to be successful would be to talk with folks already well on their way.  The questions I ask are truly ones that I want to know the answers to personally.

If you’d rather read the transcript, you’ll find it below the video on the individual post page (click on the title of this post).

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

Please let me know in the comments what you think.

Transcript:

MemberCon.com: So, I’m talking today with Jeff White. He’s got a membership website called TheStockBandit.com where he does, obviously, a membership site for online traders about stock picks and what he’s trading. And I want to talk to Jeff about how he does his membership site ’cause he’s one of the first guys that I saw doing this, and when I first started getting interested in maybe starting a membership site of my own. So, Jeff, thanks for being on this first episode here, I guess, or whatever we’re going to call this. I appreciate you being on the phone with me.

Jeff White: Yeah, thanks for having me, Tim.

MemberCon.com: Well, let me get some background first on you. When did you decide to start the membership site and how did you know that this was a possibility? Just give me a brief background.

Jeff White: Sure, yeah, I was…I’m a full time day trader and so, I trade stocks all day, and I…few years back was subscribing to some other websites to get some ideas and I got to the point where I felt good enough in my own trading, and I felt like I knew what I was looking for and kind of overlapping with that, I was at that time trading in an office full of other traders and so, I have plenty of interaction with other traders. Well, around that time, I stopped commuting to that trading office and began trading from home. And around the same time, I felt more confident about my own trading and felt like one way from me to kind of produce that interaction with other people would be to start a website. And so, it kind of overlapped in that regard. But what I did was decide that I could put out a nightly newsletter of what I’m looking at for the market for the following day and just kind of test it out as a hobby, you see, if there is any demand for that out there.

MemberCon.com: Did you have a list or a following that you could kind of capitalize on or did you start from zero?

Jeff White: No, I actually started from zero which, you know, today I don’t know if I would do it that exact same way. I think there are ways to purchase lists from organizations or other companies or just sort of piggyback on to maybe create a partnership with another existing website. But at that time, I had no list, I had nowhere to start. I actually started with friends and family and began sending it out that way, and it just kind of evolved into something where a word of mouth travels pretty quickly in my industry if the trading world is kind of a small world. And so, it wasn’t long before I started to get other people mentioning me on whether it was online forums or in chat rooms on other websites, and so it sort of took off that way, but I really began with zero customers and not exactly knowing what to expect from it.

MemberCon.com: Did you give away your stock picks initially? Was it free?

Jeff White: Yes, I did give it away for about a month or so. I just…I felt like that would be an appropriate test period for me to kind of workout the kinks before I had something and had a good clear vision for what I thought my product would be. And then once I have that, I decided to go ahead and just launch in a membership style format, and it was very raw, I guess, at that point. That was quite a bit I learned over the next few years from where I started to where I am today, and I think I’m still learning a lot, I’m still trying to learn a lot, and I want to continue to evolve with the web in that way.

MemberCon.com: If you had to do that over again, would you start by maybe offering some teasers and then go right away. I mean, did you get any, you know, push back. I know a month is not a long time to start to develop and follow and get used to your free stuff, but was there any push back from that when you did start to charge for it?

Jeff White: There really was not much of a response initially. It took me about three weeks before I had my first subscriber. And so, what I did was I was offering a free trial period. So, I did have, you know, kind of a steady growth in sign ups or registrations but before I actually got paid by someone was about three weeks after I decided to begin that model. So we’re probably looking at about seven weeks from the time I started my very first newsletter with friends and family. So, it did take some time.

MemberCon.com: And did most people before those three weeks, did they just take the free trial and then they canceled or what did they do?

Jeff White: Yeah, you know, what I found was, you know, this is a little bit embarrassing, but one thing I was doing wrong initially was I wanted to take it and make it as simple as possible for people to sign up. And so, what I was doing was collecting email addresses and allowing them to register simply with an email address. And I quickly realized that, that’s just going to spark a lot of abuse by people who want something for free. They could sign up with one email account, take it and get something for free for that trial period, and then they could simply cancel that and start up with a new email address, and it could be the same person, and it may look like a dozen different people, but as long as they could generate a new email address then, they could sign back up. And so, yeah, that was part of my initial learning curve. I was just realizing that I needed to find a better way to qualify my registration so that I was getting real people and that I was actually limiting that to one per person as oppose to allowing a handful of people reuse the thing over and over.

MemberCon.com: So, what have you kind of settled on now as then your happy meeting. You probably tried different timeframes of free trials and can you guide us through how your evolution went to where you got to where you are right now?

Jeff White: Sure. Initially, like I said, I started with just email addresses then I realized that I could setup a recurring subscription through Paypal. So, I began doing that and I felt like that was a good way to do it because Paypal limits their accounts to one per person. So, I felt like I could sort of piggyback their way of limiting abuse and let that work in my favor. And so, I started off with a one-month trial and I did that for a little while, and I found that so many people were canceling after…in the latter portion of the trial. And so, I realized that they probably are going to know whether or not they want this product pretty early on in the cycle, and so, I cut my trial period in half and it went to two weeks, and for the next several months, I really started keeping pretty close ties on when did people register and then when did they cancel. Because the way that my trial period works is they begin the trial and that at the end of the trial, they’re going to get charged for their membership, and they know that on the front end. So, anytime during the trial period, they can cancel before they’re charged and which is a different model in some sites which charge upfront and then offer a refund period after that charge. So, what I was doing was giving them this free phase and then following that as soon as they’re going to get charged. And I started studying and tracking exactly when does the average quitter leave, and what I found was it’s really around day seven or eight. And so, at that point, I felt like I had enough metrics to kind of really hone in and really reduce my free trial period, and I actually cut it in half once again from two weeks down to seven days, and that’s where I’ve been for the past couple years with the seven-day trial because, again, I had the data to backup. I realized that most people who want my product will know it in the first week, and if they don’t want it, then I don’t want to continue providing that to them for free.

MemberCon.com: There are two schools of thought here now that I’ve looked at it in researching membership sites. One, and I don’t see a lot of this, is they sign up and you can sign up without a credit card, and then you would basically get charged after you give them the credit card. And I don’t see a lot of people doing that for the obvious reasons. I think you get a lot of people that just don’t sign up. But I wonder if it would convert just as well as getting the credit card upfront and then not having them canceled. Do you follow what I mean there?

Jeff White: Sure, yeah, I do, and I’ve wondered that, too. I simply haven’t tested it. The way I’ve kind of operated is to validate…and by the way, I since stopped using Paypal because I was on the recurring payment system. I did encounter some problems with Paypal in terms of recurring payments, and we can touch on that momentarily.

MemberCon.com: Sure.

Jeff White: But, for me, I did shift to a payment processor in a credit card processor who authorized that net gateway and so, that’s what I currently use. But what I do during the registration process is when someone enters all their information, we do ask for credit card info upfront. And what we do is simply preauthorize that card for the term of their membership. And it’s simply a way to validate that that billing is correct and valid. And so, I do get some questions from people who say that they’re a little bit concerned about in putting credit card information for something that they’re wanting free which is my trial, but the response to that is generally that it’s kind of like holding a reservation at a hotel. They’re going to ask that you to put a credit card on file with them so that they can validate that you are for real, and they’ll preauthorize that credit card. It’s not going to get charged until you go and stay at their hotel or until you’re beyond their cancellation policy. But, for us, what we do is preauthorize the card initially, and then if they do wish to go ahead and become a member after the trial period then it will charge them. But that way, we’re protecting ourselves from abuse and the user is, of course, simply proving that they are a new and unique user.

MemberCon.com: Yeah, and I totally get that whole being able to give the credit card upfront, I guess, for a lot of members what I found, too, is that you mentioned the hotel, example, Hyatt is a huge, you know, probably Fortune-500 company that I know ultimately. They’re probably not going to rip me off but on the line, I’m just an individual guy that nobody’s every heard of. What do you do to kind of help to build trust with the end users so they trust you the same way they would if they give a, you know, credit card to a hotel?

Jeff White: Well, you know, I think that that really goes hand in hand with how you build an audience to begin with which is once you are perceived as an expert or you become known in your field, I think people naturally will allow a little bit more trust to you. The other thing is if I encounter someone who’s really concerned about it and they email multiple times that they’re really interested in taking, you know, in signing up for my product but they’re not confident in putting their billing info, I just suggest that they contact their credit card company and ask about their rights as a consumer because generally, the credit card company is very much going to go to “go to bat” for their cardholder and there is a lot of protection offered from the credit card companies to their cardholders.

MemberCon.com: That’s definitely true. I’ve had even with other businesses experience of those charge backs which is basically saying they’re just speeding the charge.

Jeff White: Right.

MemberCon.com: The money immediately comes out of my bank account before I can even respond to it then I have a chance to respond and then they decide whether or not to honor the charge. Almost always, it goes in favor of the cardholder which as a card owner myself, I want, as business owner, it can get a little frustrating at times, but.

Jeff White: It certainly can and I’ve encountered that some in the past on. Fortunately, it’s been pretty limited here. We go to great links to try to make crystal clear what is expected and what the process will be from start to finish. And so, the people who do agree to that, we do collect that data and so, we know exactly what date and time they agreed to our terms; and in that way if we ever need to prove that, then we’ve got it on hand. But it can certainly be frustrating when you get hit with one of those charge backs because typically from a lack of communication with that customer in particularly from them to you as a business owner. If I’m a consumer and I feel wronged by a business, the first thing I’m going to do is go to that business and see if they’ll make it right. If they won’t, then I might consider contacting my credit card company. But in the case of charge backs, with us, it seems that it’s occurred when we’ve never heard anything from that customer who either misunderstood the process or simply just went over our heads and never even attempted to give us the chance to make it right which, of course, we’re happy to do. But it’s certainly frustrating to feel like that merchant account provider, I guess, the bank is allowing you, as a business, to process credit cards. You certainly want to remain an honest business in their eyes, especially, so that they continue to allow you to do that. That’s your lifeblood and if you don’t have that then it’s very frustrating to, I guess, have to go out and try to find another one to replace it.

MemberCon.com: Yeah, and it totally agree with you with the communication. One of the things we do on our sales pages, I’ve got my direct phone number right on there, right at the bottom of the page–

Jeff White: Right.

MemberCon.com: –as well as my email. It say “call me anytime”. I knew that for somebody who does a home business, that’s a little tough, I mean, I work at an office, and so, it’s easier for people…I can give them my office number, but I would really highly suggest anybody doing that. You’re going to get…the first thought is I’m going to get thousands of calls. Well, as much as I would love for that to be that case ’cause probably it means I’m getting thousands of members. It just isn’t the case. I don’t get called a lot unless they have something to say or, you know, they’re on the verge of buying and they have another question. In that case, I don’t want them to be able to call me.

Jeff White: Right.

MemberCon.com: So that I can put them over the top.

Jeff White: And I totally agree. Think that whether you’re operating from a home or an office, it’s very inexpensive to go get a post office box somewhere as it can operate as your business address. But even on any website that’s conducting business on the Internet, it’s very important, I think, to place contact information rather than just send them to an email address or to a contact forum. They can have at least place the address of your business on there and, of course, if you have a business phone number, then place that on their, too. It really adds a lot of confidence for prospective buyers to know that you are legitimate enough to actually put down a physical location even if you’re solely operating online.

MemberCon.com: Well, let’s get back to that free trial and then converting them to a paid membership. In percentages, what are you finding in terms of…well, first of all, tell us how much your membership cost, and then what percentage do you think are you converting right now between the free trial over to the regular full membership.

Jeff White: OK, yeah, my monthly membership is a hundred dollars that’s $99.95. And, you know, on free trial that we probably convert about 25% to 30% of them. Though, you know, there are more people who take the trial who cancel then who actually go on and pay for the service.

MemberCon.com: I think 25%, that’s incredible. I mean, I don’t know what the standard is, I guess, we’ll find out and kind of my journey to talk to other outsiders, but that seems tremendous.

Jeff White: Well, you know, for me, I don’t mind when people cancel on their trial. I think that that period is set up of both of us. It’s for them as a possible buyer to know whether or not this is something that they want to pay for. So, I think it’s certainly advantageous to them to go ahead and kick the tires and give it a test run and see if it’s something that you’re looking for. But for me, I do spend ample time trying to interact with my members, and I’m always available to them to answer questions or help them out when they need it. And so, for me, if I’m going to invest that time on the backend of a sale or of a conversion from free trial to paying member, I want it to be with someone who plans on being around long enough to utilize that help. It’s nice to make that one conversion from someone coming from free trial to paid member, but if they cancel on the first month or so, then obviously, they’re not happy with what was provided. And as a business, we’re not really helping them either. And so, you know, I want them to cancel if it’s not for them. I want them to stay onboard if it is for them, in that way we can continue to build that relationship and help explain the things to them that they’re here to look for.

MemberCon.com: That’s another good point talking about how long they stay a member. I’ve heard in my research online, three to four months is pretty common which when I first start looking at this, I thought, “Man, that is awfully short.” I mean, when you think of membership, you think of somebody becoming a member for a year. I guess, it’s just not realistic and that’s just maybe the short term. What has it been for you, have you found out…kind of your average?

Jeff White: Yeah, I think my average is just bitterly longer than that probably around five months. But, again, it’s not, you know, it’s not a lifetime type of thing, and that’s actually not what we’re trying to do here at TheStockBandit.com. The aim here is to try to teach people, you know, what I look for in a good trade. And so, if I’m doing a really good job then I think that these people are learning it pretty quickly, and they get some feel for what I’m looking for right now, and then the aim is for them to go out and do it on their own. I’m trying to equip them to be able to this for themselves.

MemberCon.com: That’s an outstanding sales point, too, and I’m going to steal that from you, Jeff. I think putting it on my sales page saying, “Look, I’m not trying to make you a member for your lifetime here and collect $99 a month from you. I’m here to teach you to do what you wish you would get on and then do your own trading.” I think that’s fantastic. I think that’s fantastic, so if that puts somebody over the edge and to try you, I think that’s a great idea.

Jeff White: Well, and there certainly are some people who are here simply so that we’ll do the work for them. Maybe they don’t want to invest the time to learn it themselves. They would rather, you know, pay for the fish instead of learn to fish, and that’s OK if that’s what they want to do. They can stay here as long as they like. But the ideal person is someone who’s coming here to learn a skill and work on that for a little while, and have some interactions, and back and forth learning, and then go on out and attempt to learn it on their own. And sometimes, they’ll come back for, you know, maybe call it a refresher course or something for a couple months after they’ve done it on their own for a little while or possibly when the behavior of the stock market changes a little bit, they may want to come back and learn something a little different. But, you know, there certainly are that follow into both categories of short term versus long-term members. So, I try not to read too much into the duration of their stay.

MemberCon.com: Do you email them when they do cancel and say, “Hey, is there somewhere we fell short for you or is there something I could do differently, can I get you back?” Do you offer them a lower pricing? It’s like four questions right there in wonder.

Jeff White: No, absolutely. I do contact them when they do leave. If they’re a trial user, then they’re automatically emailed from our database. It detects that they’re in a trial and that sends them, basically, a generic email that says, “Thank you for giving us a try,” and, you know, “you’re welcome back anytime.” But if it is someone who has paid me and they’ve been a paying member, I will send them a personal email and I will ask those questions. I do not offer them a lower price to come back, and I don’t try to incentivise them to return, but I do want to seek their feedback as a paying member because I feel like theirs is the most valuable. Their feedback is the most valuable. If they’re leaving because of something that changed in various situations, then I certainly don’t want to pry and learn too much about their personal situation. However, if it’s us then I definitely want to know if we promised something and didn’t deliver it, or if their expectation was different than what they found here and so, I think it’s very good for me to seek that feedback from people who leave. And sometimes it’s simply because there is not a fit, you know, maybe they found that it’s just not something that’s for them and that’s perfectly fine, too. But it helps me as a business owner to know what needs work and what is probably doing OK and it let’s me continue to know what may need adjustment and what may need to just continue as is.

MemberCon.com: You know, one of the things I saw when I was a Netflix member a couple years ago when I went to cancel, they’d offer me a lower rate for a shorter amount of time. And I was wondering, so, if I was paying $17 a month, they offered, you know, OK, how about if we drop up to $10 for the next three months. So, I think I stayed and it caught and they got me to stay and I always wondered if that might be an interesting strategy to try with a membership site as well.

Jeff White: Yeah, that is very interesting. I think that may just boil down to exactly what you’re providing and how much ongoing work is required from you as the owner of that membership site. If it’s something like I’m doing where I’m putting out fresh new content on a daily basis, I’m not willing to reduce my prices in order to gain them back. But if it’s the type of thing where I’ve produced the content for members and it’s simply now my job to maintain it, then that may be something I would consider.

MemberCon.com: When you first started, did you have a forum for your members? That seems like a big deal a lot of membership site owners talk about starting a forum and that’s a big way to keep people subscribe. What are your thoughts?

Jeff White: You know, I think it can be a very double-edged sword to be honest, and I actually have had a forum in the past and currently do not have one, so I can kind of just walk you down that road. I think that a forum is great when it has people engaged and when it’s lively and moving. And when you visit a forum that’s alive and it’s got a lot of activity, it’s very easy to engage and it’s easy to learn and notice that this is a thriving community. If the forum is very quiet and it’s not being bumped along by people who are visiting it frequently, then I think it can actually drive people away. For me, what I found when I implemented the forum was that the wrong people began to use it or I should say the right people began to use it for the wrong reason. It was never abused which, initially, was maybe one of my concerns implementing a forum. How closely will I need to monitor this and moderate this thing and make sure that language is appropriate and that the topics are appropriate. What I really found what that people were using it not so much to network with each other but to hit me with a lot of questions. And I found it very demanding on my time, and so if I were to implement another forum, I would do it in such a way that there are other moderators in place on a volunteer basis who are there to help out to where as a site owner, I don’t have to be the guy that answers so many different things. What I found for me personally was it detracted from my midday trading, and so, there were trades I was missing because I’m busy typing an answer on the forum, and that was causing me a lot of money and opportunity. And so, I found that it was just going to be best for me to close the forum for that reason so that my focus could be where I wanted it to be, where I knew it should be during the day.

MemberCon.com: Yeah, that’s a good point, and it’s a chicken of the egg thing, too, how do you get the forum started and look busy without a whole lot of members, too.

Jeff White: Right.

MemberCon.com: So, it’s definitely something to consider.

End of Part 1 of 2. Stay tuned for the second half of this interview.

starting a membership site, website launches