Once you’re done creating and launching your membership site, you need to start thinking about subscription offerings. These can be membership plans or membership tiers.
Put simply, to make your membership site profitable, you need to charge members for a subscription. This way, you’ll be able to generate recurring income from your membership site.
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Figuring out how much to charge is important. Too little means fewer profits while too much can make customers run away from your membership site. With this in mind, in this article, we’ll go over some of the best tips that can help you figure out what you should be charging for your membership offering.
5 Tips To Help You Figure Out What To Charge For Your Membership Site
Here, we’ll share some tips that can help you figure out the correct price for your membership subscription.
#1: Launch your membership site with simple pricing
When you first launch your membership site, offering simple subscription plans is important for attracting new members and increasing conversions.
For instance, if you offer a monthly subscription plan at $6 per month, you could charge $70 for your annual plan. This incentivizes new members or visitors to subscribe to the annual plan as it seems like a better deal at a better price. Depending on your membership site and audience, you may only offer annual pricing plans which can help you generate much more revenue when a new member subscribes.
Setting your prices according to the type of audience you cater to is also important in knowing what to charge for your membership site. Depending on who your audience is, you can charge them less or more than what they would pay in the real world for something similar to the value of your membership.
For instance, if your membership teaches people how to get good at photography and you know that in-person courses and classes cost somewhere around $400 per month, you could charge $250 per month for your subscription.
This way, you can provide great value to aspiring photography enthusiasts. As a result, you’ll be able to make more sales and attract new members to your membership site. Plus, people will be ready to pay if they find additional value such as a lower price compared to competitors, better quality content for less money, and more value for less money by subscribing to your membership plan.
#2: Evaluate your operational costs
An important part of deciding what you should charge for your membership is knowing your business costs. While you certainly want to make your subscription price easily affordable for most people, making sure your membership site stays profitable is equally important. Since you’re putting in a lot of effort in building and running your membership, you want to generate profits with the price you charge people for subscribing.
In simple words, the price of your subscription is directly related to the cost of running your membership site and producing all the content along with it.
You don’t want to do all the hard work just to find out your business costs exceed your generated profits. By keeping a track of all of your costs and expenses, you can calculate profits and determine what needs to be charged for your membership site much more accurately. There are different types of costs such as domain and hosting costs, website design costs, and maintenance costs, that should be considered before setting the price of your membership plans. Even if you’re taking care of membership site maintenance by yourself, you need to account for the costs.
Additionally, knowing how much it costs you to attract a new member to your site plays an important role in deciding the price of your subscription. This means that you need to figure out how much you are spending on ads or affiliate commissions for gaining new members.
For instance, if you spend $50 on sharing ads and you gain 2 new members. The cost of attracting a new member will become $25.
Once you’re familiar with the cost of attracting a new member, you must figure out how much you need to make at least for each member that subscribes to your membership site. This can help you break even on the cost of attracting new members while ensuring that you’re profiting from each new member you gain.
#3: Research how much your competitors are charging
Knowing the value of your membership subscription is important in determining what to charge for your membership site. You should know how your membership offering differs from your competition and how it provides benefits to users.
This means that you should take a peek at what your competitors are charging and how much value they provide to their users for the price. You can compare this information with your membership offering. This will help you get a better idea of how much you should be charging.
For instance, if another membership site also offers the same type of content and solution as yours but charges much more, you can offer a better membership plan for less price and more value.
Similarly, you can charge more based on the value you provide. If your membership offering provides more value to users at the same price as your competitors, you can charge more for your membership plan. For instance, if you’ve set up a forum and discussion board on your membership site, you’re offering more value to members.
Additionally, it’s important to know that there are always going to be competitors who will charge less than you do. This doesn’t mean you have to reduce your prices to compete with them. Instead, you have to make sure your membership site stays profitable.
Knowing what your competitors are doing and the price structure they follow can help you in figuring out what to charge for your membership site. This also gives you a better idea of what your audience is willing to pay.
#4: Don’t undercharge for your membership site
Undercharging for your membership site may end up devaluing your membership offering as people will perceive it as something that’s not worth their time or money. Not only will your membership offering seem less valuable, but also it might make it a huge challenge to reach your revenue goals and be profitable.
Customers will join your membership based on the value it provides to them and their decision won’t be based on the price. The price you charge should match the value of your membership offering. This means that if you provide more value and charge more based on that, members will find it easier to make a decision and not think twice about the higher price. The same goes for charging too much for too little value. Users will not find it reasonable to pay higher prices for less value but if you give them a lot of value for a good deal, they will be willing to pay more.
You can also charge a premium for providing additional, exclusive content to your members. This can help you add more value to your membership site which in turn will help you generate more revenue. You should also consider your audience’s financial situation when determining the price of your membership plan. Your audience’s level of disposable income will be a huge factor in deciding whether they’ll be able to pay for your membership plan or not.
#5: Offer multiple pricing plans
Most membership sites offer tiered subscriptions which are a great way to offer different prices to different types of users. Not everyone wants to subscribe to your annual plan. Some members might only want to test out the waters to see if they like your content or not.
For instance, you can offer three different plans for users to subscribe to. A simple monthly plan which starts at $19, a 3-month power plan which starts at $55, and finally the annual plan which starts at $199. This can help cater to all types of users with different financial levels who subscribe to your membership site. With higher-priced options available, customers will be more interested in going for your lower-priced options. This not only adds much more value to your smaller plans but also helps you make more sales.
You can let customers who just subscribed to the basic plan know what they should expect in the future. By doing this, you can spark more interest and increase the chances of customers going for one of the higher-end plans the next time they subscribe.
When it comes to figuring out what you should be charging for your membership site, you should consider your membership plan’s value and the audience you cater to. Once that’s done, you’ll be in a better position to decide the price of your membership offering. You don’t want to be losing customers by charging too much or too little, both can be equally harmful for gaining members.
Do you have any tips on how to figure out what to charge for your membership site? Let us know by commenting below.