Membership pricing

Tips for pricing your memberships and downloads

Updated over a week ago

How should I price my memberships?

Deciding on your membership pricing can be difficult, especially when you are first starting out. We hope this guide will help you determine a pricing strategy that will maximize your revenue and keep your churn (cancellation rate) as low as possible.

Note: this is in conjunction with our Membership Tiers feature.


Offer tiered pricing

This is a very common strategy that's been available for mainstream subscription sites and software service platforms for ages. Tiered memberships mean you offer different levels of access/service for each membership. For example, you could offer a "Basic" and a "Premium" membership, and price them accordingly. The premium membership could include perks like exclusive videos, complimentary free pay-per-chat messages, and lower prices on downloads.

Nowadays, people are used to seeing different options when it comes to pricing, and they feel more empowered when they are given options to choose from. People will generally pay up to the limit that they feel they can afford at the moment of purchase, assuming the value proposition is clearly defined. If your price is just $5 but they can afford $25, you just left $20 on the table. Offer packages that will appeal to the person who's comfortable spending $5, AND the person who's comfortable spending $25. It's easier to upsell an active $5 member to the $25 price than it is to get a new $25 member from scratch. A bird in the hand...

Determine how many memberships to offer

The number of memberships you offer will depend on the different types of users you have, what they are interested in, and the way they interact with you and your content. For example, if you only offer a simple video library with no chat, no premium content and no other perks, then membership tiers wouldn't make much sense. But if you often release premium content, engage with your members via live chat, and offer other benefits, then membership tiers would make a lot of sense.

Member personas

It's a very helpful exercise to determine your member "personas". This is a marketing practice which means figuring out what different types of people you'll be selling to. A good understanding of your member personas will allow you to best craft your strategy. Here's an example of some member personas:

  • Top tier "Super fan"
    Wants EVERYTHING you have and more. Will gladly take the most expensive membership AND sometimes tip over and above this.

  • Mid tier "Loyal fan"
    Willing to pay for a cheaper membership, and sometimes pay for premium unlocks.

  • Bottom tier "Occasional fan"
    Can't afford a membership, but can pay for an unlock now and then.

Ask yourself the following questions:

  1. What are my member personas?

  2. What are all of the services and perks that I'm offering?

  3. How can I split these between memberships?

  4. How frequently can I provide the perks to the higher-priced memberships?

Make the benefits of each membership clear

Prospective members need to easily understand the value right away; they won't stick around long to evaluate overly complex pricing structures. Make it VERY clear what is included by adding detailed descriptions for your memberships. Also, be sure that members can cancel at any time.


Price based on current value

This sounds like a no-brainer, but we often see pricing that is not aligned with the value offered. For example, some creators with less than 10 videos will charge 100 USD per month. While this might capture a few of your hardcore fans, you won't have many other sign ups, and you'll severely limit your revenue potential. Would you rather 10 people paying $100 per month, or 1,000 people paying $10 per month? Membership prices can easily be increased later when your content library grows.

Price within a reasonable range
We recommend a price range between $5-$25 per month.


Always aim for MORE members

If given the option of 10 people paying $100 per month, or 1,000 people paying $10 per month, you'd choose the second option (we hope!). Your aim should always be for more members, so price your memberships accordingly, without going too low.

Why?

  • Someone paying a lower fee is less likely to cancel, and this will lead to greater revenue over the long run.

  • A higher number of members will give you less dependence on any single member, thus making your recurring revenue more stable.

  • The more members you have, the more opportunity you have for upsells.

Re-evaluate, re-price and re-define

Your pricing can and should change over time. Prices and membership descriptions can easily be changed at any time to reflect changes in your content library or the services that you include. Pricing is a dynamic tool that can drive business, so it’s important that it’s strategic and flexible and reevaluated every so often. It’s a good rule of thumb to evaluate every three to six months, and plan on making a change every six months.

Conclusion

  • A great pricing strategy will help maximize revenue and reduce churn.

  • Spend a few minutes to create a member persona outline.

  • Offer tiered pricing to capture the maximum amount people and what they feel they can afford at the moment of purchase.

  • Offer a reasonable number of membership options - usually 2 to 3.

  • Make it very clear in the membership descriptions what is included with their purchase and that they can cancel anytime without issue.

  • Price memberships reasonably, and offer perks for the more expensive options.

  • Aim for more members paying less, rather than fewer members paying more.

  • Re-evaluate every 3 to 6 months.

Asking for help

We're always available and eager to help. We'd be happy to discuss this with you if you want to bounce some ideas around. Just reach out to us in the live chat.

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