How To Set The Price Of Your Membership Site

Welcome back!

Set The Price Of Your Membership Site

Back in February, I gave you a 5-step blueprint that explained the basics of how to make money with membership sites. One of the steps is to create your pricing structure. Today, we’re going to explore this area in more detail.

Let me clarify one important point before we get started…

People will always be willing to pay for something they believe to hold value for their lives. It sounds obvious, but it’s easy to miss a few key implications. First, the ceiling price you can charge for access to your membership site will depend heavily on how others perceive the value of your information.

Second, your sales copy has a major influence on that perceived value – and by extension, the price you can charge.

Third, your price point is a reflection of your revenue model. Some membership site owners rely solely on monthly subscription fees for revenue. Others promote products to their members.

See My Post here on Reasons why you should create a continuity program.

On that note, let’s start with the decision to charge a fee, offer free access, or use a combination of the two.

Fee, Free, Or Both?

Offering free access may seem counter intuitive. But, there’s a good reason to do so: the majority of people who visit your landing page will not pay to subscribe to your site. That’s true with any product. People need to gain a level of comfort with the information you’re offering to them. They need to develop a sense of its perceived value for their lives. By providing them with limited, free access to your membership site, you can gradually entice them to upgrade to a paid subscription.

This is the same concept that is behind free special reports, ebooks, webinars, and podcasts. The idea is to encourage people to think, “Wow! I get all of this for free? Imagine what I’ll get when I join!”

I recommend that you create a pricing structure that offers multiple levels of access (free and fee). That allows you to perpetually promote your paid subscription levels to your free-access members. Many of them will eventually upgrade.

You should See Jimmy D Browns Information here on  Creating Your Own Membership Site in 48 hours!

Offer Multiple Payment Plans

A lot of membership site owners only offer a monthly payment plan. That’s a mistake. You should offer quarterly and annual subscriptions, too. First, every membership site experiences attrition within their subscriber base. If you charge your members’ credit cards (or their Paypal accounts) monthly, they’ll have more opportunities to reconsider their subscription. If you charge quarterly or annually, you remove those opportunities.

Second, people enjoy having options – it’s hardwired into us. Given the choice between three payment plans, most people will choose the middle plan. For example, suppose your pricing structure looks like the following…

Monthly = $19.95
Quarterly = $49.95
Annually = $169.95

You’ll find that a lot of people will choose the Quarterly plan. And not necessarily because it makes the most sense for their personal circumstances. They’ll choose it because they’re psychologically “wired” to think it’s the best deal.

As you know, most internet marketing strategies are based on psychology. This is a good example.

Why You Should Avoid Offering Lifetime Access

Years ago, a lot of membership site owners were using a “pay once for lifetime access” pricing model. That’s a bad idea. Unless your membership site is merely a façade to build an email list, giving lifetime access severely limits your long-term revenue stream. The initial surge in subscription fees may seem attractive, but you’ll be forced to seed your site with valuable content over the long run.

The only way this pricing model can work is if you’re driving a continuous torrent of traffic that pays the initial fee. Otherwise, you’ll be working just as hard down the road after your revenue stream has dried up. Like I said, it’s a bad idea.

Test Relentlessly

Every element of your membership site’s pricing model must be tested. That is the only way you’ll know whether you’re generating as much revenue as possible. Test your price points, subscription levels, discounts, and incentives. You’ll want to identify their effects on your conversion rate, retention rate, and overall revenue.

For example, suppose that changing your monthly price from $19.95 to $14.95 lifts your average retention rate from 4 months to 7 months. As long as your conversion rate stays the same, you’ll generate more revenue.

Setting the price for your membership site isn’t simple. But, if you start from the right place and continue to test everything, you’ll find that pricing plays a key role in your site’s profitability.

P.S.

Click here for Part One of why you Should Create a Continuity Program for your Business

Click here for Part Two of Making Money With Membership Sites.

I would love to hear your thoughts below with a comment if this is something you are thinking about doing.