YouTube Ads For Monthly Recurring Membership Offers

Here's why. Recurring membership and subscription offers don't scale with YouTube ads. In this video, I'm going to dive into my computer and share with you guys why offers that are, you know, recurring memberships or subscriptions just simply don't scale and give you an alternative solution that I know will be better for you long term. So let's dive into it right now. Just last week, I talked to two different potential clients, both of which who expressed interest in working with us here@adspend.com to help them scale with YouTube ads. And both of them had a subscription and membership offer that was recurring monthly revenue for their business and they wanted to scale with YouTube ads. But. All right, the problem was a few things, so let's go into the examples here. So here's example number one, right? Let's say you watching this video right now wants to run YouTube ads. You have a subscription offer. You, you have a membership offer and you want to get more people inside of that offer. Okay? So in this example, you have a $97 a month subscription to a course coaching program where you teach people how to create online courses, right? And the way they get access to it is by paying the monthly membership and they keep access that way. So you offer course coaching calls and a community.

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The problem with this is in this example, right, your LTV is only $300, right, per new customer, right? So you sell it for $97 a month. You're keeping people for about three months, right? So it's only about three months until someone cancels their subscription. So you can really only afford to spend about $300 max per new customer, right? Because if you, if your LTV is only $300, you can only afford to spend $300 per new customer, right? That makes sense. Which means you're breaking even. But, but the problem with this is as the ad costs continue to rise, your cost per acquisition will as well, and you'll eventually be breaking even. So that was the case in this example, right? Potential client a. Or a potential client number one came to us and he wants to run YouTube ads, but he's spending about $2,000 a day right now, right? So he's already running this offer and he wants to see if we can help him scale it to the next level, get better results. You know, lower his cost per acquisition down to like 150 ideally, right? So he's at least a 2x return on AD spend on the front end. So he's profitable again, but he's spending $2,000 a day right now, and he's getting customers for $300. So he's literally breaking even. And there's nothing on the back end, okay? So there's nothing on the back end. So what I mean by that, there's no other offer that he's offering in this business that can help him increase The LTV from 300 to, you know, 600, 900 or even a thousand, right? And so the solution here would be to make this work. In this scenario, you would have to increase your lifetime value from 300 to 600. That would be solution A, let's say, for example, right? So just double your ltv. But this means, right, which means that you can afford to spend more on the front end, right? So 300 is okay now because your LTV is 600, which means people are staying on average for, you know, six months as opposed to three. Or you offer something on the back end which increases the LTV, which raises the LTV to 600, right? So you can afford to spend $300 and be okay. Because now let's say in this scenario you'll be a 2x return on AD spend. Cool, right? That's good. But the problem with this is this is a lot easier said than done, all right? Anybody who has a subscription offer recurring membership, they know that this is a lot easier said than done. Getting people to stick for a membership is very, very hard, which is why SaaS companies are very valuable, right? Especially recurring membership SaaS companies. But it's also a pain in the ass to get started, right? And to get it to stick. I mean, you know, obviously one of the best to look at this is Netflix, right? Netflix is a SaaS model or recurring membership. But in the info marketing space specifically like this is pretty hard to do, especially on the front end, right? So this is the main problem here. This is a front end offer for a subscription. And, and that's your main business. Very tough, very tough because this is hard to get people to stick. But another solution, you can add a high ticket backend offer, okay? You can add a high ticket backend offer so that you can further increase your LTV here to make this model work and continue acquiring customers at $300 for your subscription. Then ascend, slash upsell them to your high ticket backend, and you can add a mastermind in, for example. So if you're getting customers for $300 and they're staying for about three months, which is $300, so you're breaking even on the front and you're spending $2,000 a day. In this case, that's okay as long as you add in a high ticket back end offer such as a mastermind for anywhere from, you know, 20 to $40,000. Let's say that way it's perceived value and you give them more access to you, more benefits. But the problem with this is because in this example, you already have everything inside the program already. In this case, the guy already has everything inside his front end program for $97 a month. He has the course, he has the coaching, he has, you know, the community. And adding a mastermind on the back end that's going to be seen as more valuable than what they're already paying for per month is going to be a little bit tough, right? So you can see how this is already pretty complex, especially if this is your front end offer, right? So this is another example here. So I talked to someone literally yesterday and they have a $250 a month subscription teaching everyday investors how to trade better in the stock market, all right? They get access to their, their customers get access to a discord channel. Let me just put that here. Customers get access to a discord channel where you can, you know, where they post their trades or they post their trades and access to a call every week where they can trade live with the community, right? To show you what, to show them what you're doing so that you know they can make money with you, right? So essentially $250 a month subscription teaching everyday investors how to trade. So they're offering coaching and community, right? But the problem with this is their LTV is about $500. So it means people are only staying for like two months, but it's costing them $250 to acquire a new customer, right? So you know, they're pretty much breaking even on the, on the front end, right? Because again, you're. Which means people are only paying for two months, then canceling and they're breaking in on the front end, right? So they can really only afford to spend $250 for a new customer max, right? Which means that as the ad costs continue to rise, your CPA will too, and eventually your ads will start breaking, right? You'll be breaking even, not making any money. But the real problem is this, the LTV is only $500, right? So again, you have to increase the LTV, which is very complex to do and he has a lot of levers to pull. Or you can add a high ticket backend offer, again, like a mastermind. All right? So you can see How? This is already pretty complicated. And this is coming from real experience, guys, because we've actually been running a subscription for one of our clients for about two, almost two and a half years now, I would say. And it's just a constant, like, roller coaster, right? Like, you know, some days the CPA is great, some days the CPA is terrible.

Right.

But it's never been something that we've been able to scale past, like, $1,000 a day. Like, we've literally never been able to scale it past $1,000 a day. And again, if we had more wiggle room on the front end with a higher ltv, maybe we could. So again, the caveat here is if you have a high ltv, right? Meaning you either have people staying longer or number two, a high ticket back end, so you can justify spending more on the front end, meaning. Meaning more to acquire a customer, then, okay, cool, you can afford to continue running this offer. But I still think there's a better way, and that's what I'm gonna share with you guys right now. So what if there was a better. What if there was a better way? I think this is the best way. Okay. And this is just from my experience as well. Evergreen Group Coaching Slash course model. All right. Evergreen Group Coaching Slash course model. This is actually credit to my good friend Cole Gordon. This is taken right out of his playbook that he taught us in his eight figure boardroom mastermind, and he broke it very simply on why this model is so powerful and how you can pivot to this model to make your business even more profitable and scale faster and further. All right? So what this is, is you get the course, right? So you sell a course so it's in depth course material. And your customers also get two group coaching calls per week. So they get the course. They get the group coaching twice per week, plus they get the community, all right? Plus they get the community to interact with everybody else who's inside the coaching and. And course program. They also can get, right. Email and community manager support. This is someone who's a part of your team who's just interacting with their community, answering support tickets or emails, right. Questions in the community. And then they also get onboarding calls, right? So this is optional. You don't have to do this. But once someone enrolls into your program, for example, right. It would be great to get them to stick longer, right? Or to be happy about their purchase if you give them an onboarding call to really just make sure that you, you know, lower their buyer's Remorse and that they're happy about their purchase. And who is this best for? Right? So this is best for you if you are selling anything in the B2C market, right? So selling biz op, right? Make money online, something teaching beginners, right? How to grow a business or make money. Dating offers, fitness offers. It can be done in the B2B market, but it's just going to be tougher to sell for obvious reasons. But just stick with me on the B2C markets, right? So both of the examples above were B2C, okay? And so the price point for this is $3,800, all the way up to $9,800, right? So you can see going from $97 a month to, you know, $250 a month, how big of a jump that is. Now you're charging like 10x the price. And there's a good reason for that, right? There's a good reason for that, which I'll get into. But the easiest way to explain this is the margin. You just have such a high margin because you can afford to spend more on the front end to get one customer. And as opposed to only being able to spend, you know, $300 because your LTV is $300.

Right?

It just doesn't make sense as much as this does, because there's more margin, it's higher ticket, all right? But they're also getting more for what they're paying for. And in this example, right? They're getting the same exact thing. In this example, this client right here that came to us, right, he's offering literally the same stuff for $97 a month, where they're only staying for three months as what they'd be getting in this example.

Right?

Right here. So just charging more for what you're already giving them is an easy way to add more profit, right? And get better quality buyers as well. That's the biggest thing, is your lead quality and your customers that you're gonna get from selling a $3,800 to $9,800 program, enrolling them into this is gonna be way higher quality, right? As opposed to someone who's just paying 97 bucks one time and then canceling three months from now because they're not really that serious, right? They're not that committed. It's 97 bucks. If it doesn't work out, it's not going to kill them, right? Not that this should kill them by any means. You shouldn't be enrolling people who can't afford this, but someone who can afford a $3,800 or $9,800 program is someone who's going to be a little bit more serious, right. They're going to be a little bit more dedicated because that's a bigger upfront investment.

All right.

And so the timeline here would be you can give them lifetime access. But I'll get into this on why this is actually something that you can change to make it more recurring and more of a mastermind as, as we continue going here. So stick with me. So same thing here, same thing so far as the example number one and pretty much the same thing as example number two here. But this is what you delivered to them and this is how much you charge. And the timeline would be lifetime access. But the key distinctions here are as you scale, right. You will want to add more group coaching calls. Right. So you can get this up depending on how many members you have. About five to six coaching calls per week.

Right.

And then maybe even multiple per day if needed. Right. This is what Cole Gordon does specifically. He has like five calls during the week and I think he has two per day on Mondays and Tuesdays about like sales and stuff. And you can also divvy out the calls by topic. Right. So for example, in our coaching program we have two calls per week. One's on Tuesdays about copy and creatives.

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Mainly YouTube ads focused. And then Thursdays is media buying funnels and tracking.

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With with Nick on my team who really talks about the actual in the weeds optimization, the scaling strategies. And so those are how we divvy up the calls. And you can do the same thing with your offer as well. But the key to making this model work is always having very good course material. So Sam Ovens, right here is the best example for this. I mean, I don't know about you guys, but who hasn't been through Consulting accelerator, right? If you're in this info marketing space, you've seen Sam Ovens before, you've probably bought his consulting accelerator course previously when he was promoting the hell out of it. And it was a great course, the most polished course and in depth course that I've ever been in. And I respect Sam a lot for that reason as a teacher. So you would need to have a very good course material, which if you're watching this and you already have a recurring subscription model, a membership offer, you probably do have good course material. And as you scale this, you'll want to add some client success directors. Right?

Right.

These are people that are inside sales guys, right? Coaches who are KPI'd on client success testimonials and upsells because as you want to add like something like up here, you can do an onboarding call with a client success director. That person gets to have a relationship with the clients, which means that, you know, as they continue through the program, they can also get commissioned on upselling that client into the back end offer, which we'll get into in a second.

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But clients who get results are the ones who buy your backend. So you want to have someone who's just really making sure your clients in the program are actually doing what they need to do that you know, they need to do to get the actual results. Because if they don't get the results, they'll never ascend to a backend offer. But still, even if you don't have a backend with this model, you can see how you're already more profitable, right? Because you're selling a higher ticket offer with the same deliverables as the examples above.

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Which means you're already, you know, about 3 to 4 x 5 x times more profitable on the front end, worst case, right? So you can scale, get more customers, reach more people, make more impact, make more money and income.

Right.

But.

Right.

You also can start adding some people in here because you can afford more, right. More team members to continue getting your clients results and make sure they're being accountable. And they can also do some one on one stuff. But the community manager is more of your help desk person, right. So Cole says he prefers Facebook messenger over email simply because it's more personable for the clients. For our community we use school.com, right. School.com it's way better than Facebook and Kajabi in my opinion because it's all in one place and I'll share more about that later. But you can also do a group onboarding call as you have more people. Let's say you're having, you know, 10 people enroll per day, right? That's a lot of onboarding calls. You have to have a lot of staff to do one individual onboarding call. But you could also have, you know, one onboarding call per day with every single new member who's enrolled the day previously.

Right.

That way it's easier for you to obviously fulfill on those onboarding calls. Again, these are all just optional things you can do. But here's where the fun comes in, right? The back end offer. Because obviously if you're watching this video, you maybe are thinking about starting a subscription offer, a membership offer where or you already have One, one thing you can do is you can add a backend offer. And this can be very simple. But what you can do is, you know, in this example, he says for programs that offer lifetime access on the front end, ascension becomes a little bit more difficult. So what I recommend over lifetime access is yearly access, right? So it's almost like a mini Mastermind. And I actually learned this from Sam Ovens because you know where the world's going right now from what Sam told me, and what I, what I agree with too is people don't just want courses anymore. People don't just want coaching anymore. They don't like coaching. Has a bad rep now because everyone's a coach, right? Everyone's selling coaching and everyone knows that it's going to still require a lot of work. People want the done for you solution, but more than that, they want the community to be a part of it, to feel like they're a part of something. And if they're going to pay for something, they want to be able to get the benefit of it, right? So what you usually see here is a 15 to, you know, anywhere from $50,000 plus mastermind on the back end of these, especially for the make money, right? And business growth markets for B2C here, right? Business to consumer, you can do a cheaper mastermind, 10 to $15,000 a year or just a simply continuation after four to six months in the program. So you can see here why the subscription comes into play on the backend, which is the biggest key that I want you guys to realize. Because again, you know, we spent millions and millions of dollars on YouTube ads over the last four and a half years. Millions of dollars. And never have I seen a subscription offer scale long term. Never, never, never. It usually burns out around a year, maybe two years, little bit past that, right? Like, it's just, it's just so hard to scale a subscription offer with YouTube ads. And the reason why is because people don't like recurring on the front end. You can get away with it for a while. Like the guy up here, he's spending $2,000 a day right now. He's also offering everything that you can imagine offering for $97 a month when people are literally charging this same thing for this right here for this amount, the same thing he's doing. People are getting away with charging it for 3,800 bucks. And people are happily paying it and taking it more seriously because it's perceived as more valuable as opposed to just $97 a month, right? So the point and the takeaway here, one of them I want you guys to realize is instead of having the recurring on the front end, you should have the recurring on the back end and sell them the course coaching hybrid on the front. Because it's more margins, it's higher ticket, which means you can afford to spend more on the front end and scale even further and faster because you can acquire a customer for a lot higher than 97. 200, 300.

Right.

Because you'll constantly be breaking even. And as ad costs continue to rise, it's just going to get harder and harder and harder. Harder because you're going to be competing with people that can afford to spend 10k, right, for one customer. They're not going to want to afford that, but they can afford that, as opposed to 97 bucks, 300 bucks.

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It's just a lot harder. So what you should do in this case is you should have the $3,800 as the price point. Let's say, if this is the example, as opposed to the 97amonth and.

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To continue getting access to the course, the community and the coaching calls, you can have it go into a membership after that, right. To $97 a month. Or you can just do it in a yearly fashion where it's $3,800 one time or, and $3,800 every year after that. So it's like more of a mastermind feel.

Right.

That's what I learned from Sam. So this can work really well for fitness and dating. So, for example, one of our clients has a subscription and a membership, and he does it for, I think, 47 bucks a month. Well, his would be great to package up into a $300 program. And then for continued access in the coaching and the community, he can then sell it for 97 bucks a month after that.

Right.

Because they've already paid enough money to be invested to get the result right. And then to continue getting access to the community and continued coaching, he just charges monthly after that. So you see how the model just works a little bit better in terms of YouTube ads specifically. Now, if you're just doing organic and stuff, that's great. I still think this model's 10 times more superior, hands down. No bar, bar none. Like, it's just. I'm very biased, but I'll say that because, like, I've just been doing this for so long. So what they get with continued access is just more of what they already get in the initial program for 300 bucks or $9,800.

Right.

They get the course, they get the coaching calls. You can also add direct communication channel, right? So like something that they can actually reach out to your client. Success directors when they have questions, more access to you, right? Coaches, two, two group coaching calls, right? You can add all this stuff, right? But you want to emphasize on solving new problems created by your front end offer, right? So again, you can do this a few ways, right? And for more content here, right? You can give them more content to continue giving them monthly access or yearly access. You can also offer events, retreats and a mastermind on the backend, right? If you're going to charge something like a mastermind here, but you can't really charge a mastermind unless you already have them in a high ticket program. Because someone who's in a program for 97 bucks up here where they're getting everything that they can possibly imagine in a mastermind, it's gonna be hard for them to sell them into something like this after they're already paying that $97 a month just because of the reasons I already explained, right? So you can do a mixture of the above as well. But the solution here, guys, right? The solution here is you have the course coaching community hybrid on the front end and then you have the mastermind recurring membership on the back end, right? Why more margin? It's just simple math, guys. Simple math. You have higher ticket offer and it's a lot easier to acquire a customer for, you know, $500 to a thousand dollars for a $3,800 program. And think about it like this, in the two examples above, you're making way more money if you, if, if you're selling. Let's just do it real quick just for you guys. 300 is your program, right? You acquire customers for 30 a thousand dollars. That's your CPA and this is your price point. You are making $2,800 in profit as opposed to $300 CPA, right? $97 price point and then you're getting a customer for 300 bucks, which means it's costing you 300 to get a $97 customer. This is your CPA and this is your LTV, which means they're only staying for three months and then you're getting $0 profit. How are you growing that business, right? How are you going to grow this business? You can add a high ticket back end, a mastermind, right? But I mean it's, it's hard to do, right? Like they're already getting everything here. So you can see why this is just so much better. So I hope this video was valuable for you guys just because I've seen people try to come to us to work with us and have us work our magic and try to lower their cost per acquisitions and do some stuff with the media buying and the creatives to get them lower cost per acquisitions for their for their recurring membership. But the model's broken. It's just that simple. The model is broken. It's just not scalable.

Right.

The better way to do this would be doing something like a course coaching hybrid, right? An evergreen group coaching course model. You're just charging more, which means you're getting better quality buyers. You're offering the same exact things and this allows you to get them continued access if they want to stay in the community by just charging them on a yearly or monthly basis. So the recurring is on the back end now the recurring is on the back end because once you've already sold them, they're happy they got the results. Hey, you want to continue getting results? You want to continue staying in the community? You want to continue getting support from me and my team?

Cool.

It's only going to cost you X. It's only going to cost you Y. It's only going to cost you Z. They're more than likely to ascend as opposed to staying here with no high ticket backend, right? So that's the reason why this fails more often than not. Because most of the times when people come to us with something like this, they don't have a high ticket back in, which is red flag number one for us. Because unless they change their business model up, it's never going to be sustainable.

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So that is my biggest advice for everyone right now. Who's watching this, who has a subscription, membership or recurring model that they want to scale with YouTube ads? Flip them, Put the course coaching and community on the front end for a higher ticket. Sell the recurring on the back end to continue getting access to this right here. I hope this was helpful. If you have any questions, feel free to comment them down below. If you like this video, give this video a thumbs up. Make sure to subscribe if you haven't already. If you. And until next time, guys, keep smiling, keep learning, keep growing, and I will see you in the next video. Cheers.