How to structure your online membership (Choosing your membership tiers)
There are tons of questions to consider when structuring your online membership. Should you offer a free plan? Should you break your membership up into tiers? What content should you put into your different tiers? In this video, we’re going to tackle all of these questions and more, so you can choose a membership structure that works for you. Let’s get into it.
The questions and advice in this video aren’t a one-size-fits-all, but hopefully, as we work through them, you’ll get a better sense of how you can organize your content to offer the most value to your members.
The first question we’re going to cover is, should you offer tiers?
Offering a single membership tier can make things really simple, but you might be limiting your earning potential. Offering different membership levels can give potential members more options, but then you have to manage access for each of those levels. So how do you choose between single or multiple tiers?
Generally, offering multiple options ends up being a win for everyone. Members can choose between options that fit their individual needs, schedules, and budgets, and you can make more money by having something to offer each person who is interested in your membership.
It’s kinda like the approach department stores take. They have items worth hundreds of dollars, like TVs and computers, but they know that not everyone who walks through their doors is ready or able to make that kind of purchase, so they also sell 49-cent candy bars, and 10-dollar handtowels, and 29-dollar hair dryers.
That said, the choice of whether to offer multiple tiers depends on your unique circumstances.
Answer the following questions to get a clearer picture:
How much time and energy do you have?
As I stated before, a single membership tier is much simpler and easy to manage than multiple tiers. If you’re running your membership on the side and you’ve got limited time or energy, it may be worth considering keeping it simple for now. But, if you have the time and energy, offering different options can help you earn more, which may eventually free up more of your time.
How much content do you produce?
The answer to this question can go hand-in-hand with how much time you have. Generally, the more time you have, the more content you’re able to produce and the easier it can be to break your content up into different tiers. If you only produce one piece of content per week or less, it may be difficult to offer enough different options to justify multiple tiers.
How much content have you already created?
If you’ve been creating content for a while and have an archive of great articles, art pieces, or other digital products, you could make those available in a higher-tier membership plan. If you’re just starting out and haven’t built an archive yet, that’s okay. Just keep in mind that the things you’re creating today could be used in the future to offer even more value to your members.
How much access do you want members to have to you?
If the idea of interacting directly with your members energizes you, you could leverage access to you to offer different membership tiers. On the other hand, if you feel exhausted just thinking about meeting regularly with people, that may not be the best path to offering multiple tiers.
If, after carefully considering these questions, you decide to offer multiple tiers for your membership, that leads to another great question.
Should you offer a free membership tier?
To answer this question, I’ll share some pros and cons for offering a free membership tier and then talk about an alternate approach that may be a better fit.
A free membership can give you access to someone’s inbox
It’s a way to build a community
It can be a powerful way to move people further down the funnel
It sets a precedent or expectation for exclusive access to your content
Free members may not fully value your work
Free members are not as likely to take action on the content you provide
You’re investing time in customers who may never pay you
Looking at these lists, it may seem like the cons cancel out the pros, but it’s not quite that simple. It might feel nice to offer a free membership, but just like with any part of your funnel, you want to ask questions to ensure that it’s a good investment that will eventually bring you a return.
So ask these questions:
What is the time and energy cost of having a free membership tier?
What percentage of free members would need to become paying members to justify that cost?
Do I have a reliable way to measure the cost and conversion?
These questions assume your eventual goal is to turn a free member into a paying member, but you could trade that out for other goals like getting them to purchase some other non-membership product from you, or using your free members as ambassadors for your paid membership tiers. The bottom line here is to think of your free membership tier as an investment and then make an informed decision about whether or not the investment is worth it.
As an alternative to offering a free plan, you might consider offering some tier of your membership as a free trial. This can be a great way to give people a taste of the value you have to offer and leave them wanting more so they’re more motivated to purchase one of your paid plans. This can also be easier to manage than an ongoing free plan.
There are a couple of downsides to consider. Trial customers don’t usually stick around as long, so you don’t have as much time to build a relationship. Also, with a trial, you’re giving away valuable content that’s typically reserved for paying members. Still, if you’re finding it difficult to justify an always-free plan as an investment, offering a free trial could be a great alternative.
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What kind of content should you put in different tiers?
How you separate your content between membership tiers depends heavily on what kind of content you have to offer, but we’re going to approach this from two different angles.
First, let’s talk about separating content by category
You can structure your membership tiers based on the different categories of members you might serve. For example, let’s say you teach business development.
You could structure your categories around different levels of achievement, like a 101 membership for people who are starting their first business, an intermediate membership for people who run a successful business with employees, and an advanced membership for people who run multiple businesses. Alternatively, you might structure your categories around different demographics of business owners, like freelancers, solopreneurs, or small business owners. Rather than share different levels of the same content, you’re sharing different content with specific categories of members that are catered to their unique needs.
Now, let’s talk about separating content by access
The more common way to structure your membership content is to offer different levels of access based on the cost of the different membership tiers. In this structure, you’d offer the least access to your lower-paying tiers and the most access to your higher-paying tiers. You can offer different levels of access to one or more of the following categories:
Access to you
You could structure your membership where your lowest tier has little to no contact with you, while your highest tier does a monthly one-on-one call.
Access to your archive
Your lower-tier members may get weekly content from you, while your highest tier gets access to everything you’ve ever published or produced.
Access to behind-the-scenes content
Lower tiers could get the final product, while higher tiers get to watch you work behind the curtain.
Early access to content
Higher tiers could get access to your articles or videos days or weeks before anyone else. Or they could tune in and interact live while your lower tiers only get to watch the replays.
Access to ongoing content
You could offer a special feed of content exclusively for higher-tier members.
Access to other members
You could facilitate community interaction for higher-tier members, giving them access to resources and insights from other members.
The idea with separating content by access is to give potential members an option that fits their schedules and budget while giving you the ability to earn more by having something to offer everyone.
Now that we have an idea of how we might want to spread our content out over membership tiers, it’s time to ask a new question.
How many tiers should I offer?
Again, this can vary depending on how much and what kind of content you offer, but for most memberships, the sweet spot is somewhere between three and five tiers or plans.
You want to offer enough different options that it’s easy for the right person to choose a membership tier that fits their time and budget, but not so many that there isn’t a clear right choice.
If you’re having trouble deciding, three tiers or four with a free tier can be a great place to start. In this case, your structure could look something like this:
A free tier with limited access, like a weekly blog
A basic tier with a bit more access, like a weekly blog with a companion video
A standard tier with full access, like a weekly blog, and access to a live stream of a companion video
And a premium tier with everything plus a few extra perks, like all of the above plus a bonus premium member-only podcast.
Now I’m using “basic, standard, and premium” as placeholder titles, but would those work for your actual membership tiers? That leads us to our next question:
How should you title your membership tiers?
While you can get away with “basic, standard, and premium,” those titles don’t really do much more than create a distinction between the different tiers.
When it comes to naming your tiers, you want to try to find titles that do the following:
Differentiate from the other tiers
Describe the level of membership benefits
Support your membership brand
For example, let’s say you’re a musician offering three different tiers of membership to exclusive content.
You might use something like this:
Low tier — The front row
Mid-tier — The backstage pass
High tier — The greenroom
These check all three boxes. They’re clearly separate tiers of membership. They represent different levels of access. And they play off of themes that are familiar to music fans.
So now that you know how many membership tiers you want to offer and how you’ll title them, there’s still a really important question we need to answer…
How much should you charge for each tier?
This question deserves a whole video by itself, but for now, let’s talk about a few guiding principles to help you decide.
First, price each tier of membership so it’s a worthwhile investment for your member. Ask yourself the following question:
If someone pays for this level of membership, are they getting at least the equivalent amount of value, or could they potentially make their money back by putting my content into action?
Most creators have a hard time being fair with themselves on this question, so it might be worth asking others who are familiar with what you do.
Second, price each tier so that one isn’t too close in cost to another. One of the most common mistakes creators make with their membership tiers is having prices that are too close to make it a clear decision. This often results in people feeling like they’re paying too much for a lower-tier or you feeling like you’re leaving money on the table by not charging enough. This might mean you need to adjust the level of perks or access in one of your membership tiers, but it’s worth it if it means making it an easier choice for your members.
Finally, put a fair premium on access to your time and energy. Of everything you have to offer, your time and energy are by far the most valuable. If you’re offering access to you, make sure that’s reflected in your pricing. If you value your time, others will too.
A somewhat related question we could ask at this point is should you charge monthly or yearly, or both?
In most cases, offering both a monthly option and a discounted yearly option is a great choice because it gives your members options that fit their budget and commitment levels. If you share ongoing content every week or month, this is probably the best option.
If your content is structured specifically for a year-long commitment, which might be the case if you run membership cohorts, you probably only want to offer a yearly option.
On the other hand, if you’re not 100% sure you’ll continue offering the same options or content a year from now, it would make more sense to only offer a monthly option so you don’t lock yourself into something you can’t sustain.
I know we asked a lot of questions and covered tons of ground, but hopefully your answers to these questions leave you feeling more confident about structuring and selling your online membership. Comment below if you have any questions, and again, if you found this content valuable, please subscribe and hit the notification bell. That way you never miss a video, and it helps us out a ton. Thanks, and I’ll see you in the next video.