It’s generally understood that in B2B businesses there are two ways to get your customers to fork over their hard earned money: you either save them time or money.


What does this mean for a membership business?

Because time is money, we’re really just talking about saving them money. The value of your membership product will be equal to the amount of money it helps your customers save or earn.

If you can convince your customers that purchasing your membership product will save them more money than it costs, getting them to checkout is just a formality.


What’s the Value of a Paid Memberships Pro Membership?

Here at Paid Memberships Pro, we don’t stress the time and cost savings of our products enough in our marketing. I’ll go through some thinking right now around how much a PMPro membership is worth to our customers.

Consider the aspects of a PMPro membership that have quantifiable time or cost savings:

  1. The Paid Memberships Pro Plugin (Free*)
  2. Memberlite Theme ($50)
  3. PMPro Documentation (Timer Saver)
  4. PMPro Support (Time Saver)
  5. Software Bundle (Time Saver)
  6. Business Advice on the Blog (?)

* Other membership plugins of the caliber of PMPro fetch $100-$300 just for the code itself. But the PMPro plugin is available for free through the WordPress repository, so we won’t include that fee when calculating the value of a PMPro membership.

Memberlite, then, is the only piece with an immediately apparent value ($50 based on the cost of similar themes). The key to determining the value of a PMPro membership will be in figuring out the value of the time saved in #3-5 above, and the figuring out what that time costs our target customers. Before we do that, we need to know more about who our target customer really is.


Who is Our Target Customer?

Understanding your target customer will make it easier to answer questions about what they value in general and how much they will value your product.

Our current PMPro members come in different sizes and flavors. Some are looking to do something very specific with PMPro and just need access to the one piece of documentation they found that has steps to do exactly what they need to do. Some of our customers are developers themselves who are involved with several sites, all with different requirements, trying to push the plugin to do new things. Some of our customers fall somewhere in between, with one or two support requests helping them to setup their membership site how they want.

To complete our pricing analysis (and honestly to market our product better) we need to get more specific about which customers we’re going to target. There should be one prototypical cusotmer that we develop for and market to. If we have different kinds of customers, we need to pick the one we can serve best, or the one that will make us the most money.

When you try to appeal to different types of customers, you end up aiming somewhere in the middle and miss them all. If you feel you must address to types of customers, build different products for each and tackle them one at a time.

So which type of customer described above is the best opportunity for Paid Memberships Pro? We should survey our existing users to help figure that out. (Perhaps the subject of another blog post.) In the meantime, we can make guess for the purposes of coming up with a value for our membership product.

Let’s come up with a profile for a customer buying our base membership, what we used to call the “do it yourself” package.

A typical DIY customer is working as a WordPress developer or Internet Marketer. They set up several WordPress sites every year. They have some programming experience and is capable of copying, tweaking, and pasting code to customize how WordPress and its plugins work.

They charge $40/hour or $1500 per website. They’d rather get help to do things himself vs. hire someone to do it. They are frugal with money (part of why they do things on their own), but also values their time and is willing to spend money on things that will let them do their job faster.

Our DIY customer is married with two kids and a dog. They do this WordPress work from home while worrying about providing for their family. They enjoy learning and feel good when they’re able to launch a site that pleases the client.


Back to Pricing

How does this DIY customer profiled above value the different parts of our PMPro membership? The key assumption we made was that this person charges $40/hour for their time.

If they’re charging a client for this time, maybe it’s okay if configuring the membership section of a website takes an extra 5 hours. That’s more billable hours! Sometimes though, it’s not easy to tell a client that you spent $200 of their money figuring out how to do something. Also, developers will often sell a site at a fixed price. So the faster they get the site finished, the higher margin they will make. In reality, our DIY developer might not be able to deliver the membership functionality at all without our documentation and support. A PMPro membership gives them the ability to deliver on larger projects and bill more time.

In general, we’re targeting the types of developers who need help and are willing to get it. So if we can save our customer 3 hours through our documentation and support, that’s worth $120. If they use our bundle and save 1 hour per project during setup, that’s worth $40 with every site they set up.

The idea again is not to come out with an exact value for our membership, but a better idea of how our target customer will value membership. This can tell us if our gut numbers are too high or too low.


What Did We Learn?

Are we going to save our DIY customer 1 hour or 10? In either case, the value of our membership is more than enough to justify what we charge. But we know that if we charge $99/month, we make the decision to checkout a lot harder for a large portion of our customers.

Thinking about the value of our membership has also given us some insight into to model our pricing as well. For example, is our DIY customer above getting the same value out of membership in month 2 as they will when they first sign up? Perhaps not. We should consider a higher one-time fee, or make sure that our blog posts and other periodic offerings add up to at least as much in savings as it costs on a recurring bases to make it worth keeping a membership active after you’ve gotten your questions answered and your site launched.

I don’t have all of the answers here. I haven’t even figured this stuff out for my own membership site. However, I hope this post has shown how one can go about thinking about your customers and how they will value your membership products. Knowing how your membership will be valued will tell you if you are charging too much or too little and will also provide bullet points to help your marketing.


More on Pricing

Read the entire series on pricing.

  1. How much do you want to make?
  2. Time and materials x margin.
  3. What’s the value of a membership to your customers? (This post.)

This entry was posted by Jason Coleman in Business and tagged . Bookmark the permalink. Last updated: April 1, 2012. Titled Membership Pricing: What’s the value of a membership to your customers?