If you’ve ever walked down the aisle or been ringside to the planning process, you’re familiar with the low-key panic that runs through every bride or groom to be when figuring out seating arrangements.
Do you place guests based on their expected gift contributions? Have you safely distanced that one aunt from that one uncle or are you about to spark a family feud to rival the Hatfields and McCoys?
But although the idea of setting up membership tiers and creating different levels for your customers may feel similar to plotting seating arrangements, it doesn’t have to stress you out.
Finding the right membership software is the hard part of your journey: the rest is easy-peasy.
Still, it never hurts to have a helping hand, so we’ve put together some of your most burning questions about memberships tiers and jam-packed the answers with actionable advice so you can make your membership program the best it can be.
Let’s jump right in.
What type of business is a membership website?
This won’t be the most popular opinion with some membership gurus, but hear me out:
Membership websites are basically like any other type of subscription.
Some may argue that because a membership program usually includes a social component, they can’t be considered part of the Software-as-a-Service package (SaaS) sphere. But they’re more alike than they seem when you get down to the basic model.
Here’s what I mean.
Most SaaS products -- like Netflix and Spotify -- charge a flat rate at a regular interval. Usually, it’s every month, but annual packages are often available, as well.
Now, think about your membership website -- either the one you’re about to launch or your current program.
How often do you (or will you) charge members? Does the price change from month-to-month based on how often they use your membership, or is it a flat fee?
Chances are it’s the latter, and that makes it an easy cousin to SaaS products.
And that’s great news for creators, because SaaS is prolific -- to the point that the majority of organizations are expected to rely on SaaS products entirely by 2020 -- and that means there’s equally prolific data on the best way to market, package, and sell products in this class.
In other words, we can take the mystery out of how to sell memberships and create their tiers if we just shift perspective and consider them alongside businesses like Hulu or Blue Apron.
The products themselves may be very different, but the billing models are the same.
And it’s a popular model. 23% of online shoppers have signed up for an online subscription service.
Which means, at the minimum, almost a quarter of everyone online is in the target demographic for memberships like technology website Ars Technica’s subscription:
And ProBlogger’s memberships, too.
But most importantly, it means a quarter of online shoppers are primed for your membership, except unlike these examples, you don’t have to pave the way and experiment to find out what works.
You can learn from their strengths and repeat none of their mistakes.
Membership websites work the same way as any other subscription service, which means we can copy their strategies and structures.
Now, the next question may throw you for a loop, but it’s an important one to consider -- and it may be more profitable than you realize.
Should your membership website have a free tier?
If you’re trying to build a membership business, offering a free membership tier doesn’t make sense, right?
You can’t profit off what’s free, can you?
As it turns out, you can. This is where membership websites’ similarities to SaaS businesses really helps us out. Free, as it happens, is an ace in the hole when it comes to upselling and generating more income.
Spotify is a classic example of how free turns into more. Their free tier converts 27% of signups into premium memberships.
They’re not the only one who’ve seen some crazy returns on “free”. Shopify, one of the internet’s largest ecommerce platforms, used their unlimited free trials to help grow their revenue by 90% in a single year.
The key to making free work for your membership -- and you should -- is making sure that what you’re offering will grab people from the start and convince them to invest their time into it.
That’s part of the reason we’re such big fans of giving away free content (it gets buy-in) and offer an unlimited two week trial to everyone who lands on Podia. We know our product can speak for itself, it just needs a chance to be heard.
So even if you don’t offer a fully free tier, you should provide customers with a free trial -- and ideally, you should do it without asking them for their credit card information.
Free trials that don’t require financial information convert twice as many customers into paying subscribers.
Free trials are so common and productive in SaaS companies -- remember, membership websites are intrinsically the same on a structural level -- that they’re considered part of the life cycle by some.
Looking specifically at membership businesses, you’d be hard-pressed to find a large site that doesn’t offer a free spin of their services.
For example, Smart Insights provides a free membership level alongside their premium levels.
So does Chantel Arnett of Blog Biz School, offering a free tier for users who may be hesitant to jump feet-first into a paid membership.
You see the same story with the Actor’s Revolution Club, which is actually a totally free membership program.
So, should you have a free tier?
Definitely, if your membership platform enables you to do so -- it’ll help your other tiers sell.
Though that begs the next question -- should you have more than one tier?