Membership pricing strategies – How to maximize profits with your membership website

Are you struggling to figure out the ideal membership pricing model for your website?

The wrong pricing model can turn away leads, frustrate your current members and hinder growth.

Building a great membership site takes countless hours and resources.

Imagine putting so much effort into it only to fail to generate the revenue you need because you made the wrong decision.

Have you set your price too low? Too high? Are you properly attracting new clients while keeping existing customers happy? Is your membership prices confusing?

There are many things to take into account when trying to create a successful business.

That’s why we created this guide.

We’ll walk you through the best membership pricing models and strategies you can use in your business.

Whether you’re planning to start out or you want to optimize your existing pricing structure, this handbook will help you unlock the potential of memberships.

Pricing model vs strategy

Before continuing it’s necessary to make a small distinction between these two terms.

They are very similar but have different purposes.

• Pricing model: This is the way you deliver the value. Many times it coincides with how you charge your customers
  Example: A subscription-based membership pricing model where you charge customers a recurring fee to access your product or service.
• Pricing strategy: This is the combination of techniques you use to achieve your revenue goals.
  Example: Offer a free 3 days trial so leads can taste what you’re offering before committing to the subscription model.

You can offer several membership pricing models at the same time. You can also combine strategies too if you like.

Membership website pricing models

Not all the membership pricing models will align with your goals, target audience or the value you provide.

You’ll have to consider those factors before picking a direction of travel.

Don’t worry, we’ll provide some guidance about which are best for what kind of membership site:

1. Recurring fixed pricing (monthly, annual)

This is one of the most common membership pricing models.

You charge a fixed recurring fee for accessing your membership and its benefits.

Members usually pay monthly, although you can also charge them on an annual or even quarterly basis.

The Peak Freelance Community follows this membership pricing model.

There is a $49/month fee that will give you instant access to many perks. If clients stop paying they keep all the benefits for the billed period.

This kind of recurring fixed model usually offers an annual payment x10 of the monthly fee.

But offering a longer billing period is more of a strategy than a model. The model is just to charge a fixed amount on a recurring basis.

Pros of recurring fixed pricing

• Easy to understand.
• Forges a great sense of community as everyone is equal.
• Constant and predictable revenue.

Cons of recurring fixed pricing

• Limits the marketing options to acquire and retain customers.
• You might need a great customer base to make it work.

Best for

Memberships where the value is spread over time. Like communities where contact with other members or live events is very important.

How to

If you create a membership site with SureCart and SureMembers, enabling a fixed recurring charge is really easy.

When you add a new product and connect it to the membership, you can set a payment type: subscription.

If you want to offer longer periods with different prices, simply create two different subscriptions with different prices.

2. Tiered pricing

Tiered pricing has similarities to the recurring fixed pricing model, since in this one you’ll also charge your customers on a recurring basis.

How you charge your customers is the same, but the way you deliver value isn’t. In this case we use a tiered approach.

Different tiers, different values.

A tiered pricing structure uses several fixed pricing structures where each unlocks different perks.

You’ll find examples of this model on Patreon and its alternatives.

For example Kalle Flodin offers two tiers.

Both are practically identical, although one of them offers extra perks like voting on the topic of upcoming videos.

Tiered pricing is a very popular pricing strategy used by many large platforms.

Pros of tiered pricing

• Flexibility to reach more people by offering more to those who demand more while still maintaining affordable plans.
• Offers more marketing opportunities to grow your revenue.
• Reduces the chance of failure. Offering multiple pricing options covers all audience types.

Cons of tiered pricing

• Multiple tier system. Some members have more privileges than others, which doesn’t always go down well.
• Adds complexity to the decision. Especially if you offer more than 2 tiers.

Best for

Tiered pricing structure is usually best for memberships where there are many resources or perks to offer.

Tiered pricing structure is common in SaaS or streaming services where upper tiers unlock more and greater features.

But as you have seen it’s also applicable to content memberships.

How to

Remember that a tiered membership model is actually a set of several recurring fixed-pricing memberships.

To create it easily you just have to:

1. Create different memberships with SureMembers. Each of them will lock the specific content you want. For instance using tags.

1. Create different products with SureCart. Each product will unlock a different membership. The highest tier product may unlock lower tiers

Technically it’s easy to create tiered pricing structures with SureCart and SureMembers.

The complexity really lies down in how you want to structure the tiers so that they are all fair and attractive to their target audience.

3. Lifetime

In the lifetime model you won’t charge on a recurring basis, you charge once.

This one-time payment will unlock the benefits of your membership website forever.

The Nomad List is one of the most famous communities that follow this type of model.

Pros of lifetime

• Very attractive to users who can afford the upfront cost. It offers great value for the money and avoids subscription fatigue.
• It forges a greater sense of community as it offers a feeling of ownership.
• Creative freedom. Usually people will join for what’s already in there and not what will be. This will give you more freedom to experiment.

Cons of lifetime

• You won’t have recurring income if you’re not continuously getting new members.
• It can be a risky model if you don’t get the numbers right.

Best for

Low maintenance membership sites where the content is mainly user-generated and there is not huge support involved.

How to

Selling access to a private zone for a one-time payment is easier than charging on a recurring basis.

SureCart includes this option. Just enable one time type of payment and integrate it with the membership you create with SureMembers.

4. Pay what you want

What differentiates this membership pricing model from the rest is that there is no fixed amount to pay to obtain the benefits. Members can decide how much they want to contribute.

This is a model that can be combined with the previous options:

• Accept a one-time fee to grant lifetime benefits.
• Or accept recurring fees to provide lifetime benefits.

You‘ll typically see this type of model in indie content creators who simply want to get more out of a hobby or as a side income.

In most cases this payment type may not offer much or even any extra benefit. It’s more like a donation, like the cyber barbie Ko-Fi profile.

Pros of pay what you want

• Very flexible and accessible. Let anyone collaborate with your project with amounts that would otherwise not be possible.
• Less stressful. Members won’t be expecting a high return value.
• More engaged community. Members who choose to pay what they want tend to be more committed to the project.

Cons of pay what you want

• Low revenue. Most of your followers won’t pay and some won’t pay too much.
• Revenue uncertainty. The churn rate for this model will be higher than usual.

Best for

Creators who don’t yet feel ready to charge a fixed fee on a recurring basis and are experimenting with new ways to monetize their hobbies or skills.

How to

SureCart has the option to allow members to pay what they want.

This option is available:

• For single payments.
• For recurring payments.

And it also allows you to set:

• A default value. Which serves as an anchor so members are aware of what you expect from them.
• A minimum or maximum collaboration value. Useful to avoid large mistaken payments or in case you don’t feel comfortable receiving a large amount as a donation.

5. Pay as you go

Pay-as-you-go is a widespread model in SaaS and other types of web infrastructure. You pay for access to tools and the price increases according to the resources used.

Amazon S3 is a good example. You pay to use the storage service and the final cost varies depending on the amount of GB stored and the data you transfer each month.

Upwork might be another example that’s a little easier to understand:

You can join their $14.99/month Plus plan to unlock some perks.

If the 80 connects they offer per month aren’t enough you can buy more for $0.15 each so you can apply for more jobs.

Pros of pay as you go

• Means a nice extra profit if you apply it on a recurring payment type membership.
• It can help reduce churn rate as members have more control of their expenses. They will feel like they are paying for what they really need.
• It’s not very common to see it on small membership websites, so it can be a competitive advantage.

Cons of pay as you go

• Complex to implement in certain situations.
• If all the benefits come from the pay as you go part, they can be unstable and unpredictable.

Best for

Pay as you go is particularly useful for membership sites that include access to tech resources or expendable tokens.

With a little imagination you can apply this model to other types of membership sites as well:

• Online academy: Beside the private content. Create buyable tokens to get personalized 1-1 support or access to live events.
• Forums: Allow members to highlight messages on a per-item basis.
• Directories: Allows the purchase of publishing additional ads.

How to

Implementing the pay as you go membership model will depend a lot on what you want to offer.

SureMembers has some tools that can make your life easier in that regard.

• Expiration date: Let members buy temporary access to exclusive pages. Like the one where you will broadcast a live event.
• User sync role: Sync the membership with a WordPress role to unlock different features. Combine with the expiration to make it a temporary change.

6. Freemium

The freemium model is where you give free access to a part of your content and charge a fee for perks and benefits

It’s a somewhat complex model to define. Since again it’s kind of a combination of previous models.

Freemium could also be considered:

• A tiered model where one of the tiers costs $0/month.
• A pay as you go model where you can include some paid add-ons as well as free access.

Freemium models are everywhere. Where it’s most abundant is in games and software.

Freemium can also be applied to content memberships sites, where some courses or lessons are free and others require an active subscription to watch them.

This is something that Skilljet does.

Pros of freemium

• Great conversion rates. There is a reason why this model is so common, and that is that it simply works.
• You’ll grow a huge user base as you are offering a great quality product for free. This will come in handy for other activities such as collecting feedback or testing other ideas.
• Engagement. Your community will greatly appreciate having access to quality content for free.

Cons of freemium

• It can be costly to maintain the free user base if they incur expenses for you or need your personal support.
• Deciding what to offer for free and what not to can be complex.

Best for

Larger companies that can afford the costs of creating free content or support a free tier can best utilize the freemium model.

How to

Depending on how you want to implement your freemium model you will need to take one way or another.

If you want to share standalone free content it’s recommended that you lock it behind a $0 purchase.

This way you’ll get more engaged members and you will have their contact information available for further marketing actions.

Another option would be to have all content available for free and offer some extra perks as premium features. Like a download, video or piece of code.

To utilize freemium, you might find SureMembers shortcodes useful.

You can use them to easily show or hide pieces of content across your website, like the embedded video of a written lesson or a download button.

That way, you can offer resources for free in return for some engagement.

Membership pricing strategy

Let’s see now the ways you have to attract more customers to your site and increase revenue with a membership pricing strategy.

1. Give away something for free

People love to see in advance how your product or service can help them achieve their goals.

That’s why the freemium model works so well.

But there is another way of letting customers try before they buy: trials.

There is a huge difference between these two approaches:

With the freemium model you have to continuously provide value for free. Paying customers have to cover the expenses for that.

With trials, all your content can be premium and leads can take a peek for free, usually for a few days.

Trials are cheaper and easier to implement than the freemium model. Although you can combine them.

Offering trials with SureCart and SureMembers is super easy.

There is a switch to enable them when you’re setting the price of your membership in SureCart.

2. Discounts

If you can’t or you don’t want to offer something for free, the second best approach is offering a discount.

There are several ways to do this:

Lifetime strategy

A lifetime pricing strategy might also work for a membership site.

The only difference between this and lifetime membership is that it’s temporary.

If you’re struggling to get your first members you might run a limited lifetime purchase option.

This will help you gain traction in those early days.

We think it’s a good idea to enable installment plans in SureCart as it will help with selling lifetime memberships.

Temporary and introductory discounts

If you don’t want to offer limited lifetime membership, you can also offer temporary discounts.

These can be:

• For the entire duration of the subscription: From $10/month to $8/month.
• For a certain cycle: So that the first month or year your members have a very affordable price, which will encourage them to join. If the cycle is short you can consider this a paid trial.

SureCart has a lot of options to set up any type of coupon you need.

You can also use the Subscription saver feature. It enables a special discount coupon that triggers when a member wants to cancel the subscription.

Group discounts and custom rates

One of the problems with memberships can be the sharing of login credentials between members.

SureMembers has login restriction options that can prevent this from happening.

If you enable them because you think that this may happen, you should consider offering discounts to groups and custom rates for companies.

This can overcome the problem of account sharing while offering a little extra income at the same time.

Upgrade and downgrade paths

This feature will be really useful if you use a tiered pricing model.

SureCart has the option to create “upgrade groups”. These are groupings of products that users can easily move between.

If for example your membership site has 3 tiers and your members are in the middle one:

• They will be able to easily move up to the top level at any time, so you will earn more.
• They will be able to downgrade easily, which will avoid many unsubscribes.

This might be also useful for them to change from a monthly to annual plan and vice versa.

In any case SureCart will handle everything automatically.

3. Create FOMO

One of the disadvantages of membership websites is that some people may subscribe intermittently for short periods of time.

For example, they may subscribe once every 4 months instead of maintaining a monthly or yearly subscription.

To mitigate this you could use SureMembers’ drip content feature, which unlocks different pieces of content that you specify after the time you set.

If a user unsubscribes, they miss out on that content, creating Fear Of Missing Out, or FOMO.

At the pricing level you can also enable an enrolment fee on your memberships so that when they join they have to pay a small set up fee.

This can discourage unsubscribing, because if they do, they’ll need to pay the setup fee again.

At the same time be sure to keep the same price for old subscribers.

It will make more sense to them to stay rather than unsubscribe if they have to re-subscribe at a higher price in the future.

Membership site pricing models are a matter of adapting and adjusting

There is a wide variety of pricing models and strategies that you can use on your membership website.

Choosing the right combination is crucial for the successful operation of your business.

But no pressure!

It’s difficult to get it right the first time. All you need to do is test, measure and adapt as you get to know your audience better.

What type of model do you use or are you going to use in your membership site?