If you want to run a successful membership site, you’ll need a subscription model that does two primary things:
- Makes people actually want to pay you
- Keeps non-members out
Knowing how to price a membership site is essential if you want to achieve both of these objectives.
Before launching your membership site, it’s important to think about all of the different factors you need to consider in your pricing strategy. This will help you make informed decisions about your membership prices, appeal to your ideal customer, and remain profitable over time.
If you get your pricing right, chances are people will be willing to pay for your membership and remain loyal for the long term. So, let’s talk about how to price a membership site.
Table of contents
- Video: How much should you charge for your membership site?
- Considerations When Pricing a Membership Site
- Membership Pricing Models
- How to Price a Membership Site
- Ready to Build Your Membership Website?
Video: How much should you charge for your membership site?
Considerations When Pricing a Membership Site
There are some standard factors to consider when determining your membership pricing. But it’s important to remember that what works for one business might not work for another.
Even if you run multiple similar membership sites, it’s still necessary to review certain criteria with any individual site before you set your prices.
First, determine the kind of product you’re going to create for your membership business. Is this product something you want to present as a “good deal” to your customers? Or do you want to sell a premium offer?
Understanding the value you want to give your subscribers will help you figure out what to charge.
Your Target Market
Similarly, it’s crucial to understand the market that you want to enter. Do some research to see what your competitors are charging for their memberships. This will give you a general idea of what your target audience is willing to pay.
Your Unique Selling Proposition (USP)
And while you look at your competitors, think about what they’re offering. Is there something you can provide your subscribers that they can’t get anywhere else? If there is something your competitors aren’t doing, there’s an opportunity for you.
Think about how your membership is unique, or how you can make your offer unique in order to attract customers.
You can determine how to position your membership on the market by distinguishing the unique value you provide.
Don’t forget to factor in member churn. Theoretically, members should stick with you. But, the reality is that some will decide to leave, and you’ll need to account for them when setting your prices.
If you’re not already familiar, churn rate is the percentage of customers that leave during a given subscription period. For example, you could calculate your monthly churn rate by examining how many people abandon your membership each month.
It’s difficult to know the churn rate you should expect without having any data to review, but the average membership-based website experiences a 6.7% churn rate annually. When pricing your membership, take this number into account.
Costs and Expenses
One of the most basic things to consider when it comes to pricing a membership site is your costs and expenses. These include things like your domain, web hosting, software, security, other tools or maintenance, and any outside help that you hire.
WordPress free content management system (CMS), so if you choose this option, you’ll only have to pay for hosting, as well as any plugins you need for your membership.
To keep your membership business profitable, your revenue should always cover all of your expenses—at the minimum.
Membership Pricing Models
There are many pricing models for membership sites that you can choose from. The key is to find one that works for you and the specific needs and requirements of your business.
This pricing model is just what it says: Members pay a one-time fee to access the membership and all of the content it offers. This model has the power to attract a lot of members because they only have to pay once to get access to everything.
But, you miss out on the ongoing revenue that is generated by recurring payments if you choose this option. After all, people usually decide to run a membership site expressly for this recurring revenue.
If the nature of your membership requires that you release content slowly over time, this model may not work for you. For example, you might easily be able to sell an online course for a one-time fee, but if you want to make recurring income every month from coaching services or other subscription services, one-time fees might not make sense.
On the other hand, if your membership is lower maintenance—like one that relies on user-generated content—this model can be a great option.
Monthly or Yearly Subscriptions
When people think of memberships and subscriptions, this pricing model is usually what they think of. Your members will pay a monthly or yearly fee to get access to your content, products, or services.
The monthly or yearly subscription model is particularly good if you know you’re going to provide consistent value for each billing period. For example, you might release new content or perks every month.
Or, maybe you decide to modify your payment schedule to give discounts for early renewal, or discounts for members who want to pay for multiple subscription periods at once.
A tiered pricing membership model allows you to create different packages at various pricing levels. Different levels attract different customers, which gives you the potential for reaching more members—and earning more revenue.
For example, your most affordable level might offer your most basic content, while your most expensive one gives top-tier members all of the bells and whistles.
Tiered pricing can work well for many different types of membership businesses, from software to premium content. The key is determining how much you can sustainably offer at different tiers without burning out.
Free content is always a great way to grow your subscriber base, while also allowing people to get to know you and what you offer without risking their hard-earned money.
With freemium pricing, you can offer free access to your products, services, or content while offering paid upgrade options at the same time.
Freemium subscriptions don’t expire like free trials do, which means that your members may stay engaged for much longer. Plus, free members show you that they’re interested in what you have to offer, which means they’re more likely than non-members to pay for a subscription in the future.
Some memberships offer more than others, which means they’re also worth higher prices. But not all of your target market will be able to afford to pay your full membership price upfront.
Installment plans allow these members to pay in multiple installments, giving them more financial flexibility without missing out on your membership benefits. This helps to accommodate a wider audience and makes sure that no one is left out.
The option to pay in installments is a common model used for online courses, for example.
Pricing per user is a particularly great model if you offer a product or service that is marketed to teams. Many software solutions offer this option, and if your members are business owners with teams, they may be more likely to subscribe to this model.
User-based pricing allows the subscriber to pay based on the number of users that need to access your membership.
How to Price a Membership Site
There is no one-size-fits-all method for how to price a membership site. Considering the following factors can help you determine what you should charge your members.
- Establish financial goals. Start by thinking about how much money you need to make for the membership to be profitable. The higher you price the membership, the fewer subscriptions you’ll have to sell. Remember: It’s OK to be exclusive.
- Calculate the cost of doing business. Consider how much it costs to run the membership—from the cost of the technology you use to how much time you put in. Don’t forget to cover transaction fees from payment processors.
- Test your pricing. If your initial price point is selling better than expected, it may be a sign that you could increase it. Conversely, if people abandon the online shopping cart when they see the price of your membership, it may mean you’re asking too much. Always test your membership business idea first to to see what works.
- Keep it simple. The quickest way to fail with your membership site is to overcomplicate things or make promises you can’t keep. You know your customers, and you know what you can offer sustainably over time.
Ready to Build Your Membership Website?
Are you ready to create a consistent income stream with memberships? It’s as easy as installing Paid Memberships Pro on your WordPress site.
Paid Memberships Pro has different plans and pricing to fit all membership sites, and more complete features than other membership plugins. Install Paid Memberships Pro today and start building your dream membership site for free.