The e-learning industry is a growing market. Just to give you some context, the firm Market & Research said that by 2025, the revenue associated with this industry will be around $325 billion dollars. Now, there is a big difference between the creation of a course and the creation of an e-learning platform that customers will pay every month to have access to. 

My guest today, Matt Inglot, CEO of Tilted Pixel, a marketing company that helps membership sites to grow faster, will tell us how, in 2020, an e-learning company needs to operate to have success. Matt, thanks for being on Social Selling today.

(Matt) Thanks so much for having me on.

(Antoine) So before we discuss the e-learning industry, can you tell us how you started your company and also why you decided to specialize in membership sites?

(Matt) Yeah, absolutely. So we've been in business for 15 years and it's been quite the journey to get here. Even before I started Tilted Pixel, I loved, basically, digital products, online learning – the whole digital space. I had a software product I had written in high school that I sold. I had, like, gaming websites that I ran and I basically had very few real jobs because, at an early age, I just got sucked right into the Internet and everything that it made possible.

And of course, as time went on, both the market size grew – as you explained – there’s, like, however many $300 billion dollars in the e-learning space. And I ended up realizing that the skills that I had acquired early on were now the skills that were suddenly in demand as other people are trying to sell their online products and establish their businesses. 

So back in 2005, I started Tilted Pixel. And to be honest, it just started as me freelancing. And at that point, it wasn't even specialized on membership sites or even e-commerce of any kind. It was basically a website development company. But of course, as many people that start these things start to realize, there is huge value in specialization, a huge value in understanding a customer's actual problem and solving that. And I gradually realized that the real money, the real growth, lay in the stuff that we were best at. So over time, we focused more and more on marketing and strategy and lead generation.

And over time that morphed into, ‘Wait a minute. All of our best success stories, all of our best clients are some type of membership or digital product company. So, let's just focus entirely on those altogether.’ So then we made that switch and here we are 20, 15 years later. And that's the space that we operate in. That's the space that we love and that's the space that we have deep expertise.

(Antoine) And to give a little bit of context for people who are listening today – when did you do this switch? Is it something that happened two years ago, three years ago? So when did you decide that you need to specialize your agency?

(Matt) That's such a tough question because it's been kind of a gradient. If you were to say, ‘When did you officially do it?’ Basically, about two years ago, we said, ‘Okay, let's do it.’ But unofficially, it was happening for much longer, right? And we just started only getting those types of clients.

For me, really, the switch happened probably in 2015. We had always had digital product clients, but 2015 was kind of where I ended up moving out west and all of my local business clients stayed with us, but I wasn't acquiring any more local business clients. And instead, all of our new business was coming in remotely through the Internet, through networking and all of that kind of stuff. And that's where gradually, that ended up attracting more and more of those kinds of companies and less and less of the other companies we were working with. So, unofficially, five years ago. But we finally said, ‘Okay, let's look at the reality here. Most of the clients we serve are digital products and memberships anyway. Why not actually brand around that?’ 

(Antoine) Of course. Of course, that's the best thing to do. The smartest thing to do [is] to specialize, especially when you're an agency. Because, right now, there are just so many agencies. If you cannot find exactly where you're good at, it will be hard for your customer to understand what you're good at if you don't even brand your company or something like that, right? So I think it's a must in 2020. There are just so many services.

(Matt) 100%. And you can't do them all. Like, again, when I started, I mean – first of all – we were a website development company. I almost feel like that category doesn't even exist anymore. Websites have kind of become wrapped up under the broader marketing agency, and now oftentimes it's whoever maybe does your pay-per-click campaigns or something will set up a simple website for you to bring people from the campaign to the site or it's your branding agency or it's somebody else. This whole ‘we build websites’ category doesn't exist as much as it did before. 

And at the same time, agencies themselves have gotten, like you said, super, super specialized. So back in 2005, you had companies that literally did it all. And we tried to at some point. I mean, we tried to offer pay-per-click services. We tried to offer web development. We were designing logos and brochures and stuff like that on top of it all. And who knows what else we were providing! 

But that was actually a pretty normal business model. It was possible to be like a full-service digital agency, whereas these days, no. Unless you have incredible scale and can navigate and run a company at that scale, you really gotta specialize. And like you said, that makes it easy for people to figure out what it is that you do and are you the right fit for them. 

And it's not just about the skill set, but like – for example, again – we focus on membership sites and the strategy and marketing around it, right? So if you're a membership site owner, well, it makes sense for you to talk to us. But at the same time, if you're not, then you immediately know we're not the right agency for you. 

(Antoine) Exactly. I think that's a win-win for both sides, right? It's just easier, [and] faster for everybody. That being said, like you said, you specialize now (your agency) in helping membership sites to grow faster.

I would like to know [as my] first question: What in 2020 did you find [...] is the biggest challenge that you saw with these membership sites right now? Is it something related to the acquisitions of their customers, keeping these customers? Because a lot of people think that this space is amazing because people will pay you every month. You will just need to create a course one time and then automatically it becomes recurring. [They think] it's like a SaaS company, but you and me, we know that it's not. So I would like to know, from your perspective, what is the biggest challenge that you see right now with membership sites in 2020?

(Matt) Yeah, the challenges vary depending on the size of a membership site. That's kind of the first thing to understand. If you look at the industry as a whole, I would say the top challenge is a poor membership site business model, where, as you kind of alluded, people view it as the idea that you can create a course and then you can charge people monthly for it into infinity and you've got amazing recurring revenue and passive income. And you can retire to the Bahamas and lay in a hammock all day. And that never, ever happens, right?

What you have to realize is that if you're building a membership site, you have to be able to deliver recurring value. That's why people are paying you on a recurring basis. And the flip side of that is if you don't deliver recurring value, even if you give them the world on a silver platter at the beginning, you give them everything – three months later, six months later, they'll still churn out. 

And that's what I see happening over and over is, you have all of these course creators that are saying, ‘Hey, memberships are amazing because I read so-and-so saying this and that about memberships and you've got to have recurring revenue. I'm going to go and make my course recurring.’ Well, what are you giving them in month two? What are you giving them in month three? And the answer is probably nothing. So why would they pay into infinity for your course? So that's where structuring a smarter membership model based on being able to provide true recurring value to your customers is probably the most difficult challenge of membership sites. 

And then if you nail that, then you start getting into other challenges. You had mentioned things like acquisition and I think churn as well. I mean, churn is always a big problem. [It’s] in some ways a similar problem to SaaS, and other ways, [there are] huge nuances between membership site churn and SaaS churn. And it's a poor idea to just try to apply practices from one to the other, but churn’s a huge issue.

And yeah, of course, the acquisition. The question is, you've got a half-million dollar, million dollar a year website. How do you get to two million or five million? That's always going to be a very difficult challenge because acquisition changes as the scale of your site changes. No doubt about it. 

(Antoine) You were talking just before [about] the packaging of your offer, right? If you want the customer to pay you every month, you need to deliver value every single month. We all agree on that. 

One of the things that we saw here at J7 Media – we work with a lot of membership sites – the best way that we saw to get someone to pay you every single month for your membership sites is to start very slow with the customer by selling them a small course where he can understand your environment, what kind of services you're offering, what kind of value you can offer to this customer, and if the experience is interesting for the consumer. Then, maybe, the person will be like, hey, what about having this kind of value every single month?

My question for you now, is it something that you saw, that to package a good recurring offer, you need to start with one small course upfront just to make sure that the person that you're trying to acquire will understand your environment? 

(Matt) That's honestly a really tough question because that's getting into funnels and there are several different considerations there. So no doubt, what you're saying works for sure. Any sort of low price offer, tripwire offer, can lead someone to make a bigger purchase.

And it doesn't matter if that purchase is even a membership. You could make that same argument for going from spending $0  to a few to suddenly spending $1000. If there is a $27, $99 product in between those two steps, that can certainly be effective. And then you start looking at, well, how warm is that traffic? So, I think you in particular deal with a lot of cold traffic because you guys do a lot of pay-per-click. So you have to warm that traffic up before they're willing to spend large amounts of money with you. And if that's the case, then a lower-priced offer absolutely makes sense.

The flipside of it is, sometimes, there's no need for that. If you're talking to a warm audience, you've built up an email list, right? And you've got content that you're sending every single week. You've got people that love you, know you, trust you. Then, it might be a no brainer for them to join the membership regardless, right? 

And at that point, sometimes you can actually add too many steps to the funnel where you're going to actually start losing people because you're requiring them to jump through so many hoops that they just get lost along the way. So this is where funnels are amazing and interesting because you have to have the right funnel for the right situation. And oftentimes for me, that comes back to, well, who's the audience and what's their temperature?

(Antoine) Very interesting. Very interesting answer that you just gave me. Question for you: with the different clients that you're working on right now, is there (maybe not), but is there one specific channel that you saw that most of the acquisition was coming from? Like, you were mentioning email [and I] see an amazing amount of value with email marketing. I think it's so important as a membership website to make sure that this email list gets good content on a weekly basis. Do you see one specific channel right now that works out very well for the different clients that you're working with?

(Matt) Yeah, so email, obviously – or maybe not obviously – but email is the bread and butter of the digital products world. If you have a digital product business, there's almost certainly an email in there somewhere, right? Because that's usually how they first enter your world. You get them on your email list. And then you can market to them, you can educate them. You can eventually get them to buy your products. 

But email is not at the top of the funnel. They have to get on your email list somehow. So where is that traffic coming from? And honestly, in 2020, you have more options than what you know what to do with. But, the top traffic source is organic. If you have a site that has amazing rankings and is able to pull in organic search traffic, that's a goldmine because you've got recurring customers coming in. Like [if] you want to talk about recurring revenue, Google is feeding you new traffic every single month. New leads, new opportunities to convert. That's a true recurring business.

Obviously, as you know even better than I [do], Facebook ads and paid traffic, in general, has been a huge source of traffic for the digital product world and there’s a lot of reasons for that. But, a big one being that digital products support very high margins. So you're able to spend a lot per lead in order to acquire a customer going from SEO and paid traffic.

Webinars can be an amazing source of sales, particularly in the early and medium stages of a site's journey because you can do what's known as a joint venture webinar, where you do a webinar with someone else to their audience, right? And they're basically bringing you in as a trusted expert on a particular topic. And you go ahead and you give a thirty to forty-five minute presentation educating the audience. And then at the end, they know you, they like you, they trust you. You can go straight into making some sort of offer that's limited time, discounted... basically present that on the webinar and then the person who is presenting you to their audience will typically get a commission from that, right.  And that's their incentive and their payment for bringing you on. And you can do these things all day long as long as you can find the appropriate partners. So in the digital product space, that's also just taken off.

And along with that, any other deals where you can get in front of an audience that already exists and is very close to the type of audience you're looking for, that's huge. Because what's the hardest thing about promoting a business online? Well, it's finding or building that audience. It takes forever to build like a 20,000 or 30,000 or even 100,000 person email list, right? But once you have an audience and they're engaged and they've been nurtured and they like you as the person communicating with them, then you can take that list and you can use it to promote whatever you want.

And obviously, you want to promote things that make sense to promote and your audience is going to love and not going to get sick of it. But if you're in that position, you have a lot of incentive to partner with others. And if you're on the other side where you need that audience, then you find these people in these audiences and use them to promote your products. Another way to put it more broadly is it's a subset of influencer marketing, I guess you can call it.

(Antoine) The content swap is something that works so well for membership, but also for different industries as well.

Question for you. We were having a discussion last week, Matt, on this specific topic, and I find that very fascinating. So basically, you were telling me that even if you bring recurring value to your customer by doing a weekly call, a biweekly call with the people who are on your membership site, it's not enough. It's not enough because people are not at the same stage in their knowledge consumption and the information that they consume on your platform. So even if you're doing this weekly call, if you don't have context on where your customers are in their customer value journey, you will not necessarily keep them as a monthly customer. 

My question for you now [is], how do you get these people? How do you know at what stage they are [at]? Can you segment them to make sure that at some point the content that you're providing them is exactly the content that they're looking for based on the stage that they are in their customer value journey?

(Matt) Yeah. So, that's something that's near and dear to our hearts. And when we work with clients, I mean, that's one of the main things that we'll always want to do is look at your audience and survey them and segment them, do customer interviews with them...Whatever it takes to understand who they are and what their problems are, right? Whatever it is.

I'm joining some sort of gardening membership site because my problem is my plants aren't growing. And I want to figure out how to become a green thumb. And have the kind of garden that people show on the cover of gardening books. So I'll go and I'll join a gardening membership site. And if I'm doing it for those reasons, I'm probably in a very beginner stage. I don't really know what I'm doing. And everything is new to me. And everything is exciting. And it's very easy for you to provide value to me because almost anything that you tell me or give me that moves me along from killing everything to actually having seeds sprout and plants grow and not wither and die, I'm going to be happy for it.

But now it's 3 months, 6 months, 12 months later...well, my challenges have changed and they've become more nuanced. Now I've got stuff growing, but now my pepper plants have weird spots and rings around them. What's going on? How can I solve that? And suddenly that becomes a much more difficult problem, right? It's this specific plant variety. It's got this specific problem. Can you solve that for me? So as someone goes up the knowledge curve from beginner to intermediate to expert, the set of problems changes and typically gets a lot more nuanced, right? 

So first of all, you kind of have to accept that at some point if your membership site is based around content and there are other things you can do, but if it's based around content, eventually they will churn out. It's an inevitability, right? No one's going to be a member for the next 20 years. So the idea of that infinite recurring revenue doesn't exist. 

But the way we have to tackle that then is we have to consider how far along the journey are we going to take them and then what strategies can we use to deliver value to them for as long as possible on that stage of a journey. And that's why selling courses as membership sites, just pure courses, rarely works well because you're giving them a bunch of videos or whatever, and then that’s it, right? It's done, and two years later, they're really slow watching the videos. You haven't delivered new values. 

So then with something like gardening, there are so many other things you can do, right? You can decide, ‘Okay, this is a membership site that's going to focus on helping people grow vegetables.’ And then you can do things, like, you can maybe build a tool that helps them plan their garden or even give them the information every year on when they should be planting different plants and remind them and help them organize themselves. Because this site – by the way, I love gardening, so I'm using that example (laughs). All that stuff is very hard to do, right? So you start making your site part of their yearly gardening ritual, or you have a community that actually has experts that can answer some of these kinds of more intermediate questions like what's going on with those pepper plants, right?

You start building out other ways to create that value. And at some point, despite having done all of that, they probably will still churn out, but they might have churned out three or four or five years later instead of within six months. And obviously, in that time, you've generated a lot more revenue from them. So the more you can do to layer on the value, [the better]. 

You were using weekly calls as a specific idea. I mean, in some membership sites, that might be enough if those calls are super valuable. But what you have to tie it back to is how have the problems changed and what are we doing to solve that new set of problems? 

(Antoine) And will you create segmentation for different tiers? Saying, ‘Hey, from the moment you've been able to achieve this, this and this, you shouldn't be in this group anymore. You should be in a different group.’ Is it something that you tried with different clients? 

(Matt) Yeah, there are so many ways to segment people and so many ways to handle things like pricing tiers, and we've done a lot of that. That's actually one of the big opportunities that we look for when we start working with a new client, because what are the odds that your pricing tiers are already set up the way they should be?

Well, if you've actually done all that research, maybe they are. But what happens with a lot of membership sites is people just try stuff, right? They're like, well, I have like $99 a year tier. Let's see what happens if I create a $200 a year tier.  And to justify that $200 a year, I'm going to add a few random features. I'm going to add that monthly call. I'm going to add the special interviews I do. I'm going to add some sort of bonus material to differentiate those tiers. 

But none of it's based on any research. You haven't actually considered, well, what's a customer that's willing to pay $200 look like versus [what does a] customer that's willing to pay one $100 look like? Well, chances are it's because they have a more expensive problem. They value the solution to that problem more, right? And sometimes it's the same problem, but just more important to them. Sometimes it's a completely different problem.

One possible example that I like to use is the difference between hobbyists and professionals. Some people are just dabbling in this stuff. So going back to gardening, they just want to grow vegetables in their yard. All right, that's it. And that's a very different problem than someone that actually, maybe, is not even a farmer, but has a greenhouse or sells vegetables at the market, right? Or something like that. Suddenly they have different issues. They have issues like how do you market your vegetables? How do you produce them at scale? Things like pests become a more serious problem.

If you start getting in the heads of your customers and you start understanding the different people that my sites are attracting and how they segment, this creates an entirely separate discussion of what those tiers should look like. And if it even is something as simple as tiers. Is it $100 versus $200 a year or is it more of a progression, right? 

If you're more in the beginner to intermediate scale, join our membership. And then if you're on that top end where you’re intermediate to expert, join our $5000 a year inner circle. And $5000 a year sounds bananas to most people, but that 1% that has a very specific problem that's worth a lot to them, [are] may be perfectly willing to spend $5000 a year for access to the right expertise with the right people that can solve those very difficult problems for them.

(Antoine) Very interesting. You mentioned something: pricing. Something that happens quite often with these membership sites [is] some of them will create a monthly offer and others will create an annual offer. I have my opinion on that, but I would like to hear yours. What is the best? Is it better to create a monthly offer or an annual offer?

(Matt) Yeah, I definitely have an opinion on that...Or more hard-won experience, I will say, more than opinion. 

Monthly in the membership space is a brutal, difficult world to embark on. It’s not that it can never work. And this is where, again, we have to get into the nuances of what's your offer, what's your audience. Monthly works great for Netflix, for example. But for most people, the challenge is that when you join a membership site, inevitably, it's most exciting on day one, and gradually over time, that interest goes down. Even if you're doing everything right, even if you're providing them more content, even if you're providing them access to the best community in the world, even if you're giving them extra tools and functionality and other reasons to stay. It's most useful, most interesting to them on day one.

And gradually the value proposition drops. And that's the opposite of software, which is normally where people try to copy the business model from. You sign up for a piece of software like Adobe Suite or something and you pay a monthly fee for that software. Well, the more you use that software, the more valuable it becomes to you, right?

Mailing lists are a great idea. You sign up for Active Campaign or MailChimp at the beginning. Your list is small, so you're paying them all this money and you're not really getting a lot of value from your list. And then the next thing you know, you have thirty thousand people on your list that's suddenly a huge asset to you. And emailing those people is so valuable. So you'll pay these email companies tons and tons of money for the privilege of sending those emails, knowing that you're getting so much more money back.

So that software – software as a service specifically – that is very different from the membership model, where, again, oftentimes, no matter how good of a job you do at the beginning, everything's new, everything's exciting. And over time, as the person progresses up the learning curve, they figure things out. You're going to be less useful to them. 

And in a way, it's good, right? It means you've done your job, but it means if you're pricing monthly, you're giving them the highest benefit on month one. And by the time you get to month three or month six, they may have gotten everything they need. They've solved their problems and they solved them for, let's say, it's 20 bucks a month. They solved it for three times twenty or six times twenty. They've solved it for peanuts, right? They solved it for 60 bucks. So you've basically sold your material for $60. Whereas if you say you make the membership here yearly, then the minimum amount of money that they have to pay you for all of this amazing upfront value, whatever your yearly fee is, that might be more like two hundred or three hundred dollars a year.

And there is this whole argument that, yeah, but if it's monthly, then it's just going to get dinged on their credit card every month. They won't notice. Nonsense! People pay attention to this stuff.

(Antoine) Definitely.

(Matt) Yeah. So the best thing to do is get them while they're hot. They're most excited. They most want access to this thing. Front-load that customer value as much as possible. And that usually means starting at yearly. And if you want to experiment with other membership tiers, go for it, but there better be a good reason for it. And accept that it might crash and burn so many times.

(Antoine) Oh yeah. And I totally agree with you on this. I think annual offers are way more interesting in the e-learning space than monthly offers. Exactly for the reason that you said, right?

If people pay for one year upfront, they will consume the content and then at some point, they'll be like, okay, that's what I got for one year of content, not for one month. And after that, one year later, it will be easier for them to say, ‘okay, should I renew or I should I not renew?’

One of the examples that I give to the clients is if your offer is on a monthly basis, the person for the next 12 months, [...] they will remember your company 12 times in a bad way. Nobody likes to pay an invoice. Nobody likes it, right? So twelve times in one year, they will see your company as something bad because they're giving you money, compared to an annual plan where it's only one time instead of twelve. So twelve times fewer chances that the experience with the company will be not as interesting, right? 

(Matt) Yeah, absolutely. And if you don't mind, there's another point to that that I was thinking of as you were mentioning that. 

The argument that's going to come back to someone's head when they hear this is like, ‘Okay, but someone's going to be way more likely to pay us twenty dollars a month versus one hundred dollars a year or two hundred dollars a year. It's a lot more money upfront.’ But the thing about selling digital products is typically that you have a funnel. You don't typically go from cold traffic directly to, ‘Hey, give me two hundred or three hundred dollars.’ And we kind of touched on that at the beginning of our conversation. 

So usually, in the digital product space, we spend a lot of time warming up the audience, getting them excited, and then selling them this membership offer. Typically, when they get that offer, it's over email, regardless of how they came in. So at that point, again, they know you, they like you, they trust you. They're excited about the result that they're going to get at that point, if they're pulling out their wallets, there's not that much difference between $20 or $200. And especially when you stack on other things like social proof and money-back guarantees and all of that good stuff. So it's very difficult for that switch to monthly to bring in so many new customers that it's going to offset the dramatic drop in customer lifetime value.

(Antoine) And you told me that some of your clients went from yearly to monthly or maybe they did that before working with you, but it literally destroyed their company at some point, right? It destroyed the revenue.

(Matt) Yeah! I've known people that have done that. When we work with clients, we don't do that. We run limited experiments. And every time we've run that experiment, that has gone very, very poorly.  But when you and I were chatting, I mean… there are people that I know, [and] I'm not going to name names that have done exactly that, and have turned a perfectly good seven-figure business into a six-figure business on that one decision. And it's one that's very difficult to backpedal from afterward. There's an element of damage control and everything, especially if you go all in on this idea that we have to have monthly. 

So, yeah, I mean, again, you can find exceptions. But it is incredibly difficult, especially for the kinds of businesses that are most likely to be listening to this, where you're somewhere between that million and 10 million dollars a year, it's going to be very difficult to succeed in a monthly space.

Netflix – a different category, right? Because it's basically the cheap alternative to cable. It's not the same as an e-learning platform. It's not the same thing that most of us are selling. And even them, they're spending billions of dollars a year on content to keep you. 

(Antoine) Exactly. Like, you can’t even compare it. That’s very interesting.

Matt, one thing before I let you go, I would like to know [for the] people who are listening today, [if] they are thinking about building an e-learning platform, in your opinion, what would be the step by step? Is there one thing that you should do first? Is there one thing that you should audit about the kind of knowledge that you already have or the space that you want to go in? Tell me about this kind of step by step that people need to follow if they want to, at some point, start their e-learning platform? 

(Matt) Yeah, absolutely. And it's certainly a good business model, right? We've talked about some of the disadvantages or some of the nuances, I guess, of recurring membership, which is that you've got to create that ongoing value. But the flip side of it is, of course, it can be wildly profitable. It can build a very durable business.

The recent pandemic was proof positive of that, because even if you ignore that a lot of these businesses did well anyway, just by being digital, memberships also just, in general, felt the impact less. Because, even something like a wedding membership site, where weddings just disappeared for a year, what happened was those sites still had membership revenue coming in from people that had subscribed previously that were still renewing.  It was difficult to go from normal to literally zero dollars coming in, thanks to that recurring aspect. So very good, durable, stable, excellent businesses.

So if you're looking to start one, first of all, let's assume you have an audience. If not, that's a whole other topic. You've got to find an audience, gotta find people to serve. That's an entire set of processes. But if you have maybe an audience that you've built or an audience in mind, the very first thing that you've got to do is switch your focus from thinking, ‘How can I build a recurring revenue site and make tons of money and sit in a hammock?’ to ‘How can I serve my audience?’

And that begins, of course, with talking to them and finding out about what their problems really are and not just what problems they have, but who in that audience is willing to pay to solve those problems and which problems can conceivably be solved in a way that is conducive to a recurring membership site and not just like a one-and-done product. Sometimes just a simple course is the right answer, right?

You know, just because I specialize in memberships doesn't mean I'm going to go and I'm going to try to turn everything into a membership site. But if you really want recurring revenue, then you've got to find those problems where you can build solutions that are lasting that people are going to keep on paying for. And you want to start thinking, ‘How can this grow from just me delivering content to me delivering different kinds of value over time?’

And then just like launching any other product, it's actually a really good idea to start small, right? You have to test it. You have to test the offer. You have to see if people will pay and subscribe. So you can do a very simple launch. You can email a small segment of your list saying, ‘Hey, I'm doing a pilot for such and such product. It's going to have this, this, and this. And it's a little rough around the edges. But because of that, the price is low and you can jump in and give me feedback and we can build this thing together.’

And then see if you get the sales, see if people jump on board. And if they do, then you start actually building this thing out and you can start building it bigger [and] better start understanding what the people going through your membership site like, don't like, are still struggling with... And basically create a feedback loop where you're building the site iteratively over time based on the needs and demand of your audience. Depending on the size of the audience that you start with, I mean, this might be a very long journey over many years. This might be a journey over one year if you're starting with a big audience and you're looking for that next big win.

But where people go really, really wrong is they don't listen to the customer. It sounds so obvious, but it is literally the biggest problem that happens. They think about themselves and they think about how can I extract the most money from someone's wallet and how can I bill them the most [amount of] times? And that never works because why would people subscribe to that? Why would I give you money just to give you money? I give you money because you're solving my problem. So, put your time and effort into solving problems for people that are willing to pay for them and pay for them on a recurring basis. Then you've got the beginning of an excellent recurring revenue business model.

(Antoine) Last question that just crossed my mind. Do you work with clients that use membership sites as an entry offer for their agency services after? 

I see that, quite often, people will create, let's say, a platform where people will buy small courses. But then the whole goal, the real goal, is to sell this high ticket offer at the end that could be services, that could be a masterclass...I would like to know if you have clients like that.

(Matt) Yeah, absolutely. I mean, we have clients with high ticket offers. We don't specifically have an agency that first runs a membership site and then uses that to get clients for the agency. I mean, is that a valid business model for sure? I'm not entirely convinced an agency has to go down that route unless you're really trying to get a huge amount of leads because there are much shorter funnels that will get you clients and get you lots and lots of clients, but you could conceivably do that.

And again, there are some great advantages to that. But for sure, high ticket offers kind of take us to the product ladder, and this idea that as someone's needs become more advanced and as someone is willing to pay more to solve more specific problems, that price tag goes up a lot. So I had used the example of that inner circle for $5000 a year earlier. Most people would not pay $5000 a year for access to something, but for people that are sufficiently far enough along or for whom the answers are sufficiently valuable enough, they absolutely will.

And I've experienced that in my own journey. Right when I started off, even before I started my business, how did I learn? All this stuff started off as books and blogs and basically introductory information. And as you kind of go along the journey of learning,  whatever you're specializing in – it becomes harder and harder to find really advanced knowledge that doesn't actually exist in books, doesn't even exist in online courses and videos and stuff, because they're really nuanced.

Solutions to problems can't easily be packaged up and sold for $9.99 because there are maybe a thousand people in the world that have those problems, right? And you can't reach all one thousand, so you have to start charging more. There is stuff I've paid in the five figures for, specifically to solve very nuanced and specific problems, and it's been worth every single penny. But when people hear that they think I'm crazy. ‘Why would you pay that much money?’ Well, how else are you going to get access to this type of person, this type of mentorship, this type of thinking? You're not. 

So, yeah, that's one progression path for a membership site –  [to] eventually introduce a high ticket offer. Or the flip side, if you have a high ticket offer, then you create something lower down the product ladder, which can be a membership site. It can be an online course, but it could be something that bridges the gap between spending $25,000 with you or $10,000 with you and spending a considerably lower sum first to see if they like you.

What I do with my agency that's a little bit different and it's not membership-based, but works very well, is first, we do an opportunity analysis with our clients. So they'll pay us for this, but they'll pay us a few thousand dollars for it and they'll get closer to like 15 to 20k worth of work that we do, sitting with them and figuring out, well, ‘Here's where your business is at. Here’s how your KPIs are doing. Here's your real KPIs. Here’s your funnel. Here's everything about your business, your site. And here's where the gaps are. Here's where if we come in and do this, this and this, we know from our many umpteen years of experience that there's a good chance that these are high leverage points that are going to change your business.’ 

And out of that, then you can take that and say, ‘Okay, well, whatever, we're not interested.’  Or more likely you're going to say, ‘Hey, this makes sense. Let's work together. This is a great fit. We want you to execute on all that.’ And that's an example, another example of stepping up the product ladder, but in a way that's very centered around the needs and problems of the client, right? Their problem is they want to grow their membership site. 

Some of the fears around that are that there are a lot of agencies promising to do that. ‘Are they going to do a good job? Can I trust them? Are they going to drop the ball or they're going to accomplish nothing?’ Well, here you can find out if we know what we're talking about for about 5k. And better still, there's a money-back guarantee so you can take all that. And if you decide we're full of it, then you haven't paid anything at all, right? And that's an offer that's in direct response to the needs, the mindset, the stage of the buying process of the client. And then, we kind of move up the product ladder to working together and having a deeper relationship, and obviously, at that point, there's more money involved too. So, yeah, membership sites – going back to those can be of a product ladder for sure. 

(Antoine) Very interesting. Matt Inglot, if people would like to know more about your company, what kind of services you're offering to membership sites, how can we have access to you?

(Matt) Yeah, absolutely. So the best way to get access is to visit TiltedPixel.com, check out our website, get on our email list, or just email me directly. matt@tiltedpixel.com.

(Antoine) I'll put your email in the episode’s notes. That will be perfect.

Matt, thank you very much for being on Social Selling today. I think you just provided a big amount of very good information. For me specifically, I really like the conversation that we had. So, thank you for that. And for people who are listening today, see you soon for a new episode of Social Selling.