You can’t go five minutes without another great idea for your membership popping into your head.
But then, you get that sinking feeling: Just how is this new feature or content going to alter your membership fee?
You really want to price your membership plans fairly and profitably so you can bring in a steady stream of sales and keep your customers happy.
But you have no idea what a “fair” price is for your membership site.
That’s where this guide comes in. In three steps, you can land on the right price for your membership that’ll satisfy your bottom line and your customers’ budgets.
That’s not all that we’ll cover today, though. We’ll also look at three actionable tips to make more profits off your membership or uplift your prices altogether.
Sound good? Then without further ado, let’s dive in.
How to price a membership site in 3 steps
Step #1: Research your competitors’ membership prices
While most membership plans for new creators start between $5 to $15, looking at your competitors’ prices can give you an idea of what the commonly accepted price ranges are for your industry and what customers are looking for at each price point.
Otherwise, you may create a plan that’s priced so much higher than the competition that others can’t afford it, or priced so low that profits will seem forever out of reach.
Your competitors are not the end-all-be-all for pricing, however, and treating them as such can be dangerous.
Creator Rebekah Allan, for example, had around 300 members and earned thousands each month from her membership plan, Blog Business School.
Rebekah started off charging $27 AUD per month because she saw that’s what other bloggers and entrepreneurs were charging.
She later changed this to $9 AUD to better match her target market (hobbyists and startups, not other entrepreneurs), but lost around two-thirds of her then-enrolled members after the price decrease because customers had to re-elect for the new plan.
Though Rebekah was able to build a profitable membership site and later raise her prices despite this setback, her story offers a valuable lesson:
Don’t pick a price because other bloggers or entrepreneurs are using it, or you could soon find yourself at step one again if you pivot.
Instead, see what prices other entrepreneurs in your field are using, and use those prices as a reference point for, but not a hard limit on, your own membership prices.
Let’s look at an example.
Let’s assume you wanted to create an online membership for others who want to eat more healthily, so you explore some of your customers’ other options.
Healthy Grocery Girl has a membership plan that sells for $10 per month or $99 per year. Their plans include a recipe library, weekly recipes and shopping lists, and Facebook wellness videos, among many other perks.
Similarly, the Plant Based Made Easy membership has a free, $5 per month, and $15 per month tier, with a 17% discount for customers who purchase annual plans.
On the slightly higher-end, Food Babe charges $17.99 for her monthly membership, with discounts for her quarterly and annual plans.
After reviewing these competitors and a few others (around 10 to 15 should give you a good enough sample size), you see that the cheapest paid plans are usually $5, and the highest-paid ones are around $30.
Because you’re new to the healthy eating membership space and don’t have much name recognition, you could price your most basic plan around $5, and have a second plan for $10 -- on the low end of the price range, but still within it.
As you begin developing your reputation in your niche, you can then raise product prices to reflect the quality and esteem your brand holds.
Fields where your customers can see a tangible value -- such as finance or health and wellness -- can often be justified at higher prices.
For example, Sunlight Tax charges $500 per year (around $41.67 per month) for their membership plan that helps creatives become financially stable.
Likewise, Alana Terry’s Successful Writer Membership is offered at $247 per month and teaches other authors about using ads to grow their businesses.
Although these are two examples of higher-priced memberships, it’s quite common to see memberships available at every price point.
Taking a few hours to examine competitors’ prices can help you price your membership plans more fairly and profitably than by picking a price you think “seems” right.
However, comparing competitors can only give you a broad range of what’s acceptable in your field. For more targeted pricing, you’ll need to consult directly with members of your audience.
Step #2: Consult with your customers and followers
42% of companies do not send their customers surveys or seek out feedback -- that’s a huge faux pas when you’re trying to nurture long-term trust and loyalty in your brand, not to mention creating products they’ll adore.
Contrary to popular belief, it’s totally acceptable to consult with your audience as you’re designing and pricing your product.
71% of consumers have said price and product quality are the most important factors when dealing with a brand, so it makes sense to learn firsthand what it takes to create and price a product your audience can’t resist.
One study suggested customers often think a product or service’s selling price is substantially higher than its “fair” price. Businesses explaining price differences or sharing historical prices were only modestly effective in changing consumers’ opinions.
Though your gut reaction may be to charge a membership fee substantially lower than that of your competitors, low prices aren’t necessarily the key to making your prices seem fair and reasonable.
To figure out what’s “fair” -- both to your audience and your business -- conduct effective customer research.
Send out surveys to your email subscribers and social media followers, or interview your most loyal customers via video conferencing so you can ask in-depth questions.
You can also create a product prototype to test some of your assumptions about your audience before creating a full-fledged product.
While you won’t want to be as blunt as to ask, “How much will you pay me for my membership plan?”, you could ask more nuanced questions, including the following:
- How much do you spend per month on [your field]?
- Do you plan on increasing or decreasing your spending in the next three/six/twelve months?
- What products do you regularly purchase in your niche, and from whom?
- Do you feel like you’re receiving adequate value at the price you’re paying?
Though these questions may seem excessive, they can give you valuable insight into your customers’ thoughts and behaviors regarding pricing, which may, in turn, mean the difference between mediocre sales and ever-increasing profits.
Beauty company Glossier, for instance, consulted with their customers on a new product they wanted to release. The findings from their research helped them with the product’s formulation and design, and likely its final price, too.
As you’re assessing customers’ pricing preferences, make sure to ask about factors that may influence their buying decisions.
Perhaps your customers feel they’re not getting enough value from their membership plan, or don’t feel valued by the brand despite how much they’ve invested financially and emotionally in it.
Given how an ever-growing number of consumers care about brands’ missions and morals, perhaps consumers are disappointed by a lack of conviction or ethical behavior from your competitors.
64% of consumers are belief-driven buyers, with belief-driven buyers being the majority across ages and major markets.
As such, it may be worthwhile to figure out if there are certain purposes your customers want you to stand for and support as part of your brand’s mission.
Plus, 77% of consumers feel a stronger emotional connection with purpose-driven brands, so vocally supporting a cause relevant to your brand could potentially help you win over customers at higher-end price points.
After you learn about your customers’ pricing preferences, you’ll probably want to create multiple tiers to appeal to each customer.
However, stick to just one or two tiers in the very beginning.
Your membership tiers will undoubtedly morph as you learn more about your audience, so there’s little point in creating multiple tiers you’ll need to revamp in a few months.
You can keep that revamp on the light side, at least, if you figure out what your membership will include -- which is, of course, the next step.
Step #3: Determine what your membership will include
As for the types of content to create for your membership site, the only limits are your imagination. Some common and highly-valued membership features include:
- Live webinars
- Group coaching Q&As
- Private coaching and mentoring
- Digital downloads and printables
- Videos and mini-courses
Because no two membership plans are alike, you have heaps of flexibility in terms of pricing your membership tiers, particularly if your membership offers much-desired but seldom-seen perks.
For example, Pen to Publish’s Authors Get Paid membership plan offers monthly one-on-one sessions, a monthly masterclass, quarterly challenges, and discounts for other Pen and Publish products, among many other features, for $27 per month-- quite an excellent deal.
In a similar vein, The American Patriette offers lifetime access to an ever-expanding collection of printables for a one-time fee of $37.
Of course, there are ways to increase your memberships’ value outside of adding more content, such as by offering better customer service.
74% of consumers have said brands can set new standards by offering a higher level of customer service, so perhaps adding advanced customer support in plans can attract customers.
After deciding what your memberships should include, determine if you want to include one or multiple tiers of your membership to appeal to customers on different budgets (we’ll cover tiers more in the next section).
To have a clearer idea of what you’ll need to charge from each membership tier to turn a profit, you use this membership website calculator to project your profits in addition to your competitor and customer pricing data.
Otherwise, let’s move onto making more from your membership than your initial price point.
3 tips to earn more from your membership site
#1. Offer membership tiers
One simple way to earn more from a membership site is by offering multiple membership tiers, such as how Cara Chace did for her Pinterest PowerUp membership.
This can not only help you to cater to customers with different budgets but also to customers who are looking for more advanced or simplified membership options.
Generally speaking, consumers prefer more choices when they’re looking for something pleasurable -- think hobbies, entertainment, and the like.
When they’re looking for something more utilitarian, they tend to prefer fewer options to pick from.
Even if you’re selling something pleasurable, there is a limit to how many options you can offer before customers become overwhelmed.
One study found customers were more likely to make a purchase when they had six types of jam or chocolates to choose from compared to a set of 24 or 30.
So just how many should you offer?
As with anything else, it depends on how many membership plans you’re willing to maintain and how many will encourage your customers to make a purchase without overwhelming them.
However, it’s not uncommon to see memberships sites with three or more paid plans.
If you use Podia to host your membership site, you can create as many membership plans and create as much member content as you like, in addition to having an unlimited number of members in each tier.
Join us for our weekly demo to see how easily you can set up and manage your membership site on Podia, and why thousands of other creators use Podia as their membership platform of choice, too.