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4 Reasons I hate the “Monthly Fee” business

I HATE business models that are based on monthly recurring fees.

“Woah.

Hold up, Scott.

That doesn’t even make sense.”

Yes, I know we have our own versions of monthly recurring fees. These programs include LeadCraft and Inner Circle.

But let me explain.

I hear from people all day long…

“I want to build a passive income business”.

Doesn’t everyone?

Isn’t it the dream to spend time on the beach, while money flows effortlessly into your bank account?

There are lots of people out there “selling” this dream. But you know what?

It’s not real.

Or at least, it’s different from what people are trying to “sell” you.

The truth is, you must meet one or the other of these criteria (which INFINITUS currently does):

a). You have an existing audience

OR

b). Your business is already sustainable and profitable.

If you can’t claim either a) or b), then you definitely want to pay attention to what I’m about to share with you.

Ready for this?

Here are the four reasons I hate monthly recurring revenue programs as a business model.

Reason #1 – Lack of momentum

In order for you to grow your business and make it successful, you need momentum.

Momentum in your business is based on cash.

Without money, your business is dead. Cash is the lifeblood of your business.

And that is exactly where the monthly fee model breaks down: it takes a LOT of people to create enough cash flow to make the business model worthwhile.

The cash flow problem is exacerbated when you also try to use online ads to sell the program.

You won’t make money on your first – or even second – month.

Unless your customers stay for at least three months, you’ll probably actually lose money.

Instead, wouldn’t it make more sense to sell something for $1,000 or $2,500?

For example, it costs us $202 to sell our flagship lead generation program, LeadCraft, at an average revenue of $1,602 which leads to an average customer lifetime value of $4,205.20.

It’s pretty hard to duplicate that at a monthly recurring revenue cost!

Also, when you are starting out, selling something at a higher price gives you the ability to “figure things out”, such as your ability to bring in new customers at a profit. Once you get that figured out, you can easily build momentum.

Reason #2 – Don’t Underestimate…

How difficult it is to get someone to give you their credit card information… I’m not joking.

It doesn’t matter how much “value” you provide. People don’t like reaching into their wallet to pay for something automatically every month.

And the other problem? Because they don’t really know what they are going to get, they hesitate to make that kind of financial commitment, especially online.

Never underestimate how difficult it will be,

Ever.

Reason #3 – Judgement…

Every single month you go through your credit card statements, ensuring everything is accurate.

The majority of business owners also use this time to look at their expenses and make sure things add up.

You see, when someone is paying a monthly fee, they assess and judge your value

every single time they see it on their statement.

This means you have to spend a lot of time making yourself relevant, over and over again.

It also means you have to spend a TON of time canceling accounts, dealing with lots of membership churn and always bringing more and more value.

Reason #4 – Value Delivery

We recently hired someone new to join our Entrepreneur Success team because we needed someone to provide insane value to our paid communities.

But do you want to know something kinda crazy?

While the Inner Circle re-launch allowed us to hit our goal, every dollar we’re generating on a monthly basis from this membership program will be going to this person.

Now, we’ve chosen to do this because we believe in the value of creating an amazing community.

But think about it: you have to continue to build new content and add incredible value… every single month.

Do you have the time and resources to make that happen?

Now – I’m not saying that the monthly business model isn’t a good one.

However, with so many people making it sound like the best thing since sliced bread, before you go and follow this business model, I want you to know the risks.

Regardless of what you do, those four rules cautions, always.

Remember, there is no true “get rich quick” scheme in this life…

It takes a lot of determination, time and iteration.

Now having said all that, I want to thank you. A lot of you have jumped into Inner Circle or LeadCraft Pro, and are helping us create that amazing community that is so vital to the success of any entrepreneur.

And many of you who weren’t ready to join have seen lots of emails come through your inboxes, and put up with them.

We want ALL of you to know that our #1 goal is to help you be successful, regardless of whether or not it’s appropriate for you to join one of our programs.

So thanks for sticking around. We’ll make sure we constantly provide top-quality value for you every week.

Scott

Scott

Oldford |

Founder and CEO Infinitus

Scott Oldford has been an entrepreneur since his early teens, having built multiple million dollar businesses. In 2013, after a failed business left him $726,000 in debt, he decided to go all in on building an online course for entrepreneurs. Since then, he's paid off his debt and generated millions in revenue.

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