Why the Continuity Model Makes Sense For Your Internet Business

October 29, 2008 - Written by Gyutae Park  

What do I mean by continuity? A continuity program is anything that requires you to pay on a recurring basis to access a product. Magazine subscriptions, membership sites, pay-for-access tools, and product-of-the-month clubs are all examples of solid businesses that use the continuity model. If you think about it, a continuity program has huge potential; you’re continually paid even after creating a product and making a sale. There are opportunities to incorporate continuity into almost every business. It’s just a matter of realizing the potential, coming up with a new idea that will lure people in, and executing a proper strategy.

I’m currently focusing on building membership sites mainly because I love the continuity business model. There are many reasons why it’s beneficial and makes sense, especially for independent webmasters. I’ve listed out some of the advantages below.

6 Reasons why continuity makes sense for your business

1. Continuous cash flow & long term profits
One of the biggest concerns of most Internet entrepreneurs is sustaining a level of cash flow that can carry them through month to month. Sure, a new project might be successful this month, but what happens next month with new projects? Most people prefer to be tied to corporate desk jobs mainly because of the financial security that jobs provide. Getting a salary paycheck every couple of weeks means that there is a steady flow of cash coming in regardless of new projects.

Well what if I told you that you could get the best of both worlds – to be an entrepreneur who is paid on a continual basis? The continuity model provides that solution. By charging customers for access, you’re essentially increasing your cash flow for the long term – which is crucial in times of economic recession.

For example, say that you have a membership site that costs $57 per month. With an average member base of just 50 people, you’re set to make $2,850 every single month. That’s not bad at all.

2. Lower price point means more customers
Another benefit of continuity is that you can sell your products at a lower price point, knowing that you’ll profit from recurring membership fees. Lower prices mean more customers, which will then lead to huge long term profit potential.

As an example, many of the big Internet marketing product launches feature packages that cost in the thousands of dollars. This is a huge barrier for many potential customers and they’re ultimately unable to invest in the product. However, say that the product was turned into a continuity membership site instead that cost $97 per month to access. Wouldn’t that bring in more customers? Not only will you make up the cost in volume, but you’ll also receive recurring fees that will increase profit margins even more. PPC Classroom is a recent launch that followed this model with great success. They went on to do $1 million in sales from a $77 + $22/month membership site in just a week. Crazy! That just goes to show you the power of continuity. Smaller recurring fees (rather than a big lump sum) means more customers who pay you over a longer period of time.

3. Do work once, get paid forever
Are you tired of constantly writing blog posts and thinking of new ideas to generate income for your business? The beauty of membership sites and continuity programs is that you essentially do the work once, and get paid for it forever. Think about it. You can either work yourself to death constantly producing content so that you can sell advertising against it or you can produce premium content once and sell access to it forever. Which would you rather do?

Continuity programs significantly increase your efficiency – you create a product or idea, market it to gain subscribers, and move on to new projects that interest you. Unlike blogs and service-oriented businesses, continuity programs can run themselves without needing you to be there all the time. By setting up a continuity program now, you could be paid 2 years down the line for work you do today.

4. Easier to sell to existing customers
You know how the saying goes… It’s easier to sell to existing customers than it is to obtain new ones – and it’s very true. Continuity programs are effective because that’s exactly what you’re doing – selling to existing customers. If people like what you have to offer and think that it’s valuable, they’ll continue to pay for it on a recurring basis. Your product is essentially your marketing and you’re developing a strong relationship with your customers in the process.

Since current customers are more likely to continue than new prospects are to sign on, lead generation costs are significantly decreased. You can then take the higher profit margins and invest in new marketing channels that will bring in more people to the continuity funnel – which will lead to a snow ball effect for profits.

5. People are willing to pay for updates & community
So far, we’ve mostly discussed the benefits of a continuity model for you, the Internet business owner. But how is continuity advantageous for consumers? Do they really want it? The answer to that question is yes. People are willing to pay for exclusive cutting edge products that are frequently updated and kept up to date. For example, SEOmoz PRO is a member’s only area that provides the best tools and resources related to SEO. Marketers want to pay for access because it gives them a competitive advantage – something that wouldn’t be possible if everything was publicly available for free.

In the same way, there’s a need for continuity programs in almost every niche imaginable. Marketers want access to the latest tools and tactics, day traders want insider information and expert advice, shoppers want to know about the best deals, and students of any topic want convenience and ease of information. People want this kind of stuff and are willing to pay for it. The possibilities with membership sites and continuity programs are endless.

6. Exclusivity = higher quality, better branding & increased demand
By nature, continuity programs are exclusive because they require recurring payment. Someone who doesn’t have $50+ to spare every month won’t be allowed to join. This weeding-out process naturally ensures that everyone involved is serious and significantly increases both the real and perceived quality of the program. What does this mean for you? First of all, the continuity means that everyone involved in your program is serious about your product and is considering staying with you for the long term. This increases the community aspect of your site as well as your branding; your program essentially becomes a high quality hub in your niche. That in turn increases demand and thus your membership levels and profit.

If you take a look at all of the successful continuity programs on the web, they’re all very exclusive with a tight-knit community. For example, SEO Book, SEOmoz Pro, and Teaching Sells are all very high quality Internet marketing membership sites that follow this model.

Does your Internet business utilize a continuity program? If not, you’re probably leaving a lot of income on the table. Now that you know about all of the benefits, it’s time to figure out how can you successfully incorporate continuity into your current sites.

I recently discovered Ryan Deiss’ Continuity Blueprint, a marketing course that outlines everything you need to know about membership sites and continuity. The price is pretty steep ($1,997) but if you’re serious about the model, I suggest you at least take a look at what it has to offer. I bit the bullet and paid for it, but I know that it’ll pay off once I implement the strategy. Be sure to watch Ryan’s continuity videos if you haven’t already. There’s a lot to be learned from those alone.

What do you think? Are you ready to use continuity to improve your business? Tomorrow, I’ll be going over the niches that work best with continuity as well as a few examples of continuity programs. Be sure to subscribe to the RSS feed and check back for the post.

Leave a comment below. Your feedback is much appreciated!

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Comments

27 Responses to “Why the Continuity Model Makes Sense For Your Internet Business”

PPC Student on October 29th, 2008 Subscribed to comments via email

The continuity model has gotten a lot of attention since Ryan’s “Million Dollar Napkin” got everyone talking. I’m kind of glad that PPC Classroom 2.0 launched before all the hype about the Continuity Blueprint began.

I joined PPC Classroom and have been quite happy with it. I think they priced it right and have great content.

I’m curious where you got the sales figures for PPC Classroom, as I haven’t seen those published anywhere else. Care to share how you came up with them? Thanks.

Gyutae Park on October 30th, 2008

I’m a member of both the Continuity Blueprint and PPC Classroom and would have to say that the membership site model is more in line with the the direction I want to take my business. PPC affiliate marketing is very lucrative but I’d rather build out my own products and monetize on a continuous basis.

As for the sales figures for PPC Classroom, I’m on the affiliate email list so I get all the information about how it’s doing in terms of sales.

 
 
fields on October 30th, 2008

Hey Guys,

Thanks for the nice comments .. We really are working hard to deliver and keep everyone happy.

Nice website Gyutae !

Gyutae Park on November 5th, 2008

Thanks Marshall for stopping by! Thing must be pretty busy over there at PPC Classroom eh?

 
 
Gobala Krishnan on October 30th, 2008

Sure, it’s good, but not all the time. It really depends if you CAN and WANT TO continuously support members from month to month. It also depends if there is new stuff you can deliver every month, which is not the case for all types of niches.

Gyutae Park on November 6th, 2008

Hey Gobala,
I just wrote an article about the factors that determine whether continuity is right for a particular niche. I invite your to take a read: http://www.winningtheweb.com/factors-determine-continuity.php

As for supporting members from month to month, I actually think that’s better because they’re paying customers – you don’t need to put as much into marketing for new sales. Also, it’s better to outsource some of the support work anyway.

 
 
Eric Hamm on October 30th, 2008

These are definitely some great tips and I appreciate you sharing them with us. There are certainly advantages to this kind of model. I also agree with Gobala in regard to the fact that it’s not always the best way to go. But I don’t think you were implying this anyway, so it’s not much of a disagreement. Eric.

Gyutae Park on November 6th, 2008

Hey Eric,
I totally agree that the continuity model isn’t always the best for all markets. I just wrote an article about the factors that determine whether continuity is right for a niche. Check it out: http://www.winningtheweb.com/factors-determine-continuity.php

When all conditions are good for continuity though, it’s definitely the model I want to use in my business.

 
 
Dennis Edell on October 30th, 2008

Continuity is fine I suppose, as long as you don’t attempt to hide it.

Gyutae Park on November 6th, 2008

Yeah Dennis, I feel ya. I remember Joel Comm kind of hid his continuity subscription that he sold with his Adsense book and got a lot of heat for it. Transparency is key!

Dennis Edell on November 6th, 2008

Personally, I haven’t seen one yet that didn’t try to hide it.

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SEO Stuart on October 31st, 2008 Subscribed to comments via email

Great post! The continuity model is perfect for all businesses, on and off-line, I worked in sales most of my life and my best long term and most sustainable incomes all came from continuity programs, mainly membership sales. I still have money trickling in from short term sales and marketing prommotions that are over 5 years old from selling ongoing services that someone else provides and taking a percentage of the monthly payments. 😉

Gyutae Park on November 6th, 2008

Yep, that’s what it’s all about. The residual income is awesome and people are willing to pay on a recurring basis because they actually prefer the ongoing support and service. Do you have any plans for creating continuity business online?

SEO Stuart on November 6th, 2008 Subscribed to comments via email

I would realy like to yes, continuity business models are fantastic, hopefuly in the future, at the moment I’m full time SEO’ing for new clients and any spare time is spent researching and learning… I truly believe in the saying “in SEO every days a school day.” 🙂 I have learn’t a lot from you Gyutae through your great articles, in the short time I have been visiting here.

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brian on November 1st, 2008

while I agree with most of the points above, I diagree with point #3 (3. Do work once, get paid forever)…this may not be true. Content drives a website. As they say, “Content is King”

http://www.livbit.com

Gyutae Park on November 6th, 2008

Hm, I’m not sure I see where you disagree. Content is king, but that doesn’t mean you can’t monetize it on an ongoing basis. If an article you wrote 2 years ago is still valid today, then why wouldn’t people pay to read that information if it’s valuable?

 
 
Make Money Blogging on November 2nd, 2008

Yeah you’re right.. people are willing to pay for updates.. Funny mindsets..

 
sven on November 2nd, 2008 Subscribed to comments via email

Passive income is the income everyone wants to have, still paid membership takes some skillz to set up. It would be more interesting to read how you can actually set this yourself. We all know how great it is, most people probably don’t know how to create it.

Gyutae Park on November 6th, 2008

Good point. There are a lot of tools out there today that make creating membership sites fairly easy. You can even use WordPress + a few add-ons as the CMS. I’ll try to do a post for ya once I get things up and running.

 
 
Ann Arbor Web Design on November 2nd, 2008

You really made the case for the continuity model really well there.

 
ZK@Internet Marketing Blog on November 3rd, 2008 Subscribed to comments via email

As a business owner I would want all my products to be based on the continuity model

 
Portable Printer on November 5th, 2008

Some argue that making the ‘continuity’ sales may hurt cash flows in the near term, but it seems to pay off in the long run.

Gyutae Park on November 6th, 2008

The counter argument to that is that the lower price point of continuity products drives more volume – which makes up for the difference. At the end of the day, you just have to test things out and analyze how your market responds.

 
 
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