Online Course vs Membership Site. Which Info Product is Best For You?

If you have been thinking about starting your own online knowledge business, then you have probably considered which business model to adopt.

There are many business models out there for making money online, and the most popular info products you can create are online courses and membership sites.

Many new creators struggle to choose between these two business models, and sometimes it can be hard to understand their differences. However, online courses and membership sites are actually two very different models, with one common goal: to share your knowledge with others.

If you are unsure about what business model to choose, keep reading below! In today's article, we will clarify the difference between an online course and a membership site, their definition and their advantages and disadvantages, so you can make an informed decision on which model is best for you and your business.

Online Course vs. Membership Site

An online course is a collection of lessons structured towards a clear path that brings a student from point A to B.

The main difference between an online course and a membership site is their pricing.

Online courses are typically sold as a one-time payment, and students get access to a set amount of content and lessons over a sometimes limited period of time. With membership sites, students pay a monthly or annual fee to access continuous content over time.

Another big difference between online courses and membership sites is their duration.

While online courses generally have a start and an end date, membership sites don't typically have an end date, and their goal is to retain students as long as possible.

Courses that teach a topic that requires a longer time for students to learn, or that students have to access on a weekly or monthly basis are a great fit for a membership site. Fitness, language, cooking and so on, generally favor a membership site business model.

Besides length, what differentiates a membership site from an online course is the end goal.

While an online course aims to help students reach a certain result in the fastest way possible so at the end of the program they will not need the course anymore, a membership site aims to retain its students and should help them achieve and maintain a result, without them leaving the program.

Fitness courses are a great example of this: students who join a fitness membership site do it to achieve a result (i.e., losing weight or becoming healthier). Assuming they enjoy the site's content and receive value from it, they will not stop accessing the course simply because they have reached their result, as their goal is also to keep being healthy or keep their ideal weight.

Whether you choose to create an online course or a membership site, all need to get started is an all-in-one software like Heights Platform.

On Heights, you can create beautiful and engaging online courses by uploading multimedia content in your lessons, adding gamification tools, interacting with your students through online communities and much more. Heights Platform also makes it super easy to create and run a membership site: you can set your monthly price, limit students' access, upload your content and structure your program the way you want.

Online Course Pros

There are so many benefits to building and selling online courses. Let's see them below:

You get to create leveraged income: creating leveraged income means not trading your time for money by building a business where a relatively small amount of work brings in recurring revenue over time.

Great for topics with a specific end goal / result: if you want to create an online course around a topic whit a very clear end result that students are looking for, an online course is a great way to execute this idea and help others reach that result.

Great for evergreen content: typically, a student will take an online course only once - so as the creator, there is no need to modify the content unless it is beneficial to the program. This makes online courses the perfect medium for evergreen content that doesn't change over time.

A lower level of involvement after launch: as an online course creator, you will work the most before launching your course. The biggest tasks are structuring the course, recording the lessons, building an audience and marketing the course. After launching, other than answering your students' questions and improving the course further, your job is pretty much done - unless you are already planning marketing for another launch!

High price potential: since courses help people achieve a result in a very efficient way, they have the potential for you to charge a premium price in accordance with the value of that result. As a course creator, you are the one deciding on your price and the sky is the limit!

Online Course Cons

Your revenue is tied to new sales: a potential disadvantage of selling online courses can be that your revenue is only tied to single sales, meaning that the customer's lifetime value is low (or only as high as your course price). Many creators remedy this by building a variety of products and adding them to their value ladder, to create additional revenue streams and diversify their income.

Inconsistent revenue stream: the revenue stream of the average creator can also be inconsistent, with peaks during launch periods and lows between launches. If you are looking for a steady paycheck every month, membership sites might be the better choice for you.

High turnover: unless you set up a community area with software like Heights Platform, students in your online course will come and go as soon as they complete it. This means a high turnover, making it harder to interact with your students and create meaningful connections.

Membership Site Pros

Great for topics with a long learning curve: if your chosen topic requires your students to undergo a long learning curve, a membership site is a better model compared to the classic online course, because you will be able to retain students for longer (and it will be more affordable for them).

Easier to develop a connection with students: while it is definitely possible to develop a connection with your students both with online courses and membership sites, it might be easier to do so on a membership site, simply because you get more time to interact with them.

More secure and consistent revenue stream: with a membership site, students pay a monthly fee to access the content. For the creator, this means higher financial security as you know that every month your existing students will pay an access fee.

Exponential revenue growth: since students pay a monthly fee to access the site, the more students you get, the higher your revenue gets. Plus, assuming your churn rate* is low, your revenue will grow exponentially.

*What is Churn? Customer churn, or customer turnover, refers to the number of customers a business loses in a set period of time. The lower this percentage, the better for your business, as it means that customers stick around for longer.

Flexible to changes and feedback: in a membership site you are releasing brand new content every month for your members, this makes membership sites extremely flexible in how they are managed and how often you get to tweak your content.

Higher customer lifetime value: since in membership sites, customers stick around for a longer time compared to online courses, in most cases, your customer's lifetime value will also be higher.

Membership Site Cons

Consistent work: with membership sites, your effort does not end after the launch: work has just started. You constantly need to release new content for your members, keep them engaged, answer their questions and work to produce the next content round.

Less passive than courses: Similar to the previous point, membership sites are also less passive: they cannot function without the creator being actively involved in creating new content every month. So while with online courses, you can take a vacation every now and then, and the course will run on autopilot, you cannot afford this with a membership site (at least early on when your membership is new).

Lower price point: prices for membership sites are very different from the ones for online courses. Most membership sites charge a monthly subscription to their members, generally less than $100, making it a lower price point than courses.

Hard to keep the churn rate low: The average churn rate for membership sites is around 6-7% annually, meaning that an average membership site loses 6% of its customers yearly. While this percentage is not necessarily bad, it can be complicated to decrease it and get customers to stick around for longer. You'll only get the benefits of that recurring revenue versus an online course model with a one-time payment if you can retain customers for a long enough amount of time.

Which Business Model Should You Choose?

Now that we have outlined the pros and cons of membership sites and online courses, you hopefully have a better idea of which model to choose for your next info product.

That said, you don't have to focus on one business model only. You could mix and match your product offerings to include courses, membership sites and even other business models types, such as digital products or coaching programs.

Many creators try to differentiate their products and create a "customer journey", where they start with a simple offering and guide their customers up to their most expensive and valuable product.

Organizing your products this way is often referred to as the value ladder.

Learn all about creating your own value ladder in this article from our blog: The Value Ladder - How to Improve Online Course Sales by Segmenting Your Audience and Product Offering

That's great, but how can you afford to build all of these products?

With Heights Platform, you can create and sell unlimited courses, membership sites, challenges, coaching programs and unlimited digital products! That's right, unlimited.

Create your free Heights Platform account today and start building your online course or membership site (and more!).