Subscription vs membership – Which pricing model suits your business best?

Whether you’re creating a learning resource for customers, launching a social networking website, or exploring monetization options for your blog, choosing the right pricing model is crucial for your success.

But chances are you might use subscription and membership interchangeably, as they are almost identical in their meaning.

That’s why today, we’re going to dive into the world of these two pricing models to help you understand the difference between the membership and subscription business models.

First, we’ll define and show examples of both models. Then we’ll discuss their benefits and drawbacks and how they can impact your revenue and customer engagement.

We’ll also introduce you to a new plugin called SureMembers that can help you implement either model on your website.

By the end of this blog, you’ll have a clear understanding of which pricing model will best suit your business and how to implement it on your website.

What is the subscription model?

A subscription business model is when you provide access to services, benefits, or privileges in exchange for a recurring daily/weekly/monthly or annual fee.

Some common examples of subscription-based products and services include magazines, news portals, Software as a Service (SaaS) products, online streaming services, and gym memberships.

A great example is Netflix. It’s an excellent example of a subscription website where you pay a monthly fee to access entertainment videos, TV shows and movies.

Entities that commonly use subscription models

Here are some examples of subscription models in common use:

Technology companies (such as software and app developers)

Technology companies provide services as SaaS products for developers, designers, and video creators.

Dropbox, G Suite, and Microsoft Office 365 are a few examples of SaaS. cloud-based platforms available for a regular fee..

Tools like SureMembers, BitBucket, Adobe, Camtasia and ScreenFlow also use subscription pricing models to provide services in return for a regular payment.

They all provide huge convenience to users in return for a fee.

A business can save time and money not having to buy or maintain their own IT infrastructure and offload all responsibility to the SaaS provider.

In return, you pay a monthly subscription per seat, per program or something else to the SaaS provider.

Delivery services (such as meal kits and groceries)

Some companies offer grocery delivery and free shipping for subscribing to one of their digital services.
For instance, Amazon Prime, or Instacart both offer delivery services as part of a subscription.

Amazon also offers subscriptions for certain products where you pay regularly for delivery of a variety of items as well as their Whole Foods business.

Other delivery services include Amazon Fresh, Walmart+, Thrive Market and Misfits Market.

These subscription services are useful for products we tend to forget when we’re out shopping. Signing up for regular deliveries means one less thing to worry about, which is worth paying for.

Consumer goods manufacturers (such as razor blades and coffee beans)

Some enterprising businesses offer common consumer goods delivered to your doorstep in exchange for a subscription.

Studio Coffee, for example, provides coffee beans to its consumers on subscription while Estrid offers razor subscriptions in some countries.

These are also convenience subscriptions. Delicious fresh coffee or the razors we run out of and always forget are just two examples of why this model works.

Educational institutions (such as online courses and tutoring services)

Educational institutions can offer courses ranging from personal training to food and nutrition, yoga and meditation, to online tutoring.

For example, ISSA teaches online and offers certifications for personal fitness training, military training, yoga, nutrition and wellness courses using the subscription model.

Personal training can be a lucrative way to make money if you’re qualified. Setting up an online fitness business is easier than you might think!

Gaming and game-related services

Some gaming companies and game developers provide access to games using subscriptions.

Where games would typically involve a one-off payment to buy, developers are aware of the fact subscriptions make much more money.

They also enable developers to deliver ongoing content and support for those games, offering greater value in return for the subscription.

For example, XBOX Game Pass Ultimate, PlayStation Plus, Nvidia GeForce Now and Apple Arcade have created their online games library in exchange for a subscription.

Music and podcast streaming services

With music and podcast services, you provide audio streaming services in return for a fee.

This is a more complicated subscription to offer as there are a lot of licensing concerns and you’ll need access to music.

It’s one of the most popular services out there so it could be worth the effort.

Examples of subscription-based music streaming services include Spotify, Apple Podcast and Google Podcast.

These platforms offer a basic service for free and charge a regular subscription for access to more music or podcasts, more features and exclusive member content.

It’s a very effective, and lucrative, business model.

Personalized meal services

Personalized meal services are catering services that deliver meal ingredients to your door as part of an ongoing subscription.

They provide a valuable service to time-starved people while charging a regular fee.

Hello Fresh and Home Chef are two great examples of online subscription-based meal services you can take inspiration from.

They cater to a real need, for nutritious meals for people with little spare time, in return for a subscription.

Even though they are more expensive than grocery shopping and building your own meals, the convenience offered makes the extra cost worthwhile.

Newsletters or news aggregators

News aggregator sites don’t produce any news themselves. Rather, they collect news from different sources and show them on their website or in an RSS feed, just like the posts you see on Facebook.

You can take inspiration from real-life news aggregators sites like Press Reader.

This subscription model is again about convenience. We all know free news sources but rarely have time to visit every single news website and trawl through news to find what we want.

The same for magazines, newspapers and other publications.

Car and bike sharing services

With cars and bikes being so expensive, a number of subscription options have arisen across the globe.

Car subscriptions such as Enterprise Subscribe and others enable you to drive a brand new car using a subscription rather than a lease. It costs more but offers more flexibility and doesn’t tie you into long contracts.

Organizations like Buzzbike offers a similar service for bicycles. A monthly subscription enables you to use any bike, anywhere it operates with no maintenance and no long contract.

As you can see, there are lots of subscription options out there but they all have one thing in common.

They provide convenience in return for a fee.

If you want to create a business built on subscriptions, build convenience into your offering and you should enjoy great success!

What is the membership model?

Memberships use the same time of payment plan as subscriptions, but are more about being part of a community.

Where subscriptions are mainly fee in return for a service, memberships are fee in return for belonging.

It’s a subtle but important difference, especially to the people who use them.

The membership model involves offering memberships to certain members, groups, or clubs so that they can enjoy special privileges, benefits and services along with a way to interact with each other.

Membership models are commonly used in various industries, including fitness, entertainment, eLearning and travel.

For example, a gym may offer memberships that provide access to its facilities and classes, while zoo membership may offer exclusive access to the animals, classes and free access to events..

In either case, members have a way of interacting with each other and playing more of a part in the offering rather than just paying for access.

Organizations that commonly use the membership model

Here’re some of the most common websites that use the membership model very effectively.

Using any of these for inspiration could set you up for success!

Fitness and wellness centers (such as gyms and yoga studios)

A fitness and wellness membership works in a similar way to offline fitness centers.

You can collect subscriptions, let members train using your online courses and build a community where users can share their thoughts and interact.

That community aspect is what differentiates a membership from a subscription.

Bodybuilding.com is a great example of a fitness and wellness website where they sell online training sessions with a 7-day trial period and users can share their thoughts in the built-in forum.

Professional organizations (such as associations and unions)

Professional organizations consist of people from similar disciplines or professional backgrounds.

For example, doctors can build their own associations and unions where they can collect subscriptions and communicate with each other, just like a social networking site.

The American Medical Association has a membership. In return for a fee, you can access training, seminars, insurance, discounts on products and equipment and access to regulatory experts.

There’s also regular meetings, those seminars and the opportunity to mingle in person or online with other medical professionals.

Setting up your own medical association may be a tough ask, but there’s nothing stopping you creating your own professional association if there’s a gap in the market.

Educational institutions (such as schools and universities)

Educational institutions like Coursera allow users to learn using their platform. They help create a community-based peer reviewing system and a way to rate the courses and share feedback with others.

Training and education has huge potential for building communities. As we move away from classroom teaching, new opportunities arise for those of you that can fulfill a need.

It’s a lot of work, but could reward you with regular income from memberships. As long as you also offer somewhere to hang out as well as access to courses, it could be a great success!

Non-profit organizations (such as museums and zoos)

Non-profit organizations such as museums can also sell memberships online. As long as there’s a balance between offering access to facilities and being part of something larger, it could work exceptionally well.

The Museum of Us is a nice example of selling memberships online.

As well as entry into the museum, there’s the chance to get involved with how the museum is run, attend events and seminars and play a part in the future of the museum.

Entertainment venues (such as theme parks and golf clubs)

Many entertainment venues are waking up to the potential of memberships to provide sustained income.

Live Nation in the UK offers a membership scheme that provides access to over 50 different venues along with exclusive performances, early entry and the opportunity to meet other members at a gig.

This type of membership would take a lot of coordination to make it work but is another way to earn money using the membership model.

Community centers (such as libraries and community pools)

You can collect the subscription fees from your site visitors and sell your library membership online.

The British Council is a nice example that sells memberships to access their online library of books.

As well as access to books, membership also includes access to online seminars and events and informal meetups with other members.

Other membership sites include travel and leisure companies (such as vacation clubs and hotels), automobile manufacturers (such as car clubs), insurance providers (such as health insurance plans) and credit card companies.

You can also consider social clubs, personalized shopping, maintenance, cleaning and delivery services to sell them online in the form of a membership website.

Subscriptions vs memberships: what’s the difference?

As you can see, both the subscription model and membership model are very similar. But there are key differences as we alluded to earlier.

Let’s dig a little deeper to find out how they are different from one another.

A sense of community or belonging

A subscription website typically provides services or content to customers. It’s mainly about the transaction. Paying a set amount for access to content.

In contrast, membership websites collect membership fees and provide their services as well try to create a feeling of community.

Membership websites provide the opportunity to connect and interact with each other. Members can discuss their concerns and share their thoughts with one another so they feel part of something bigger.

Related expertise or enthusiasm

To subscribe to a subscription website, you don’t need to consider any special expertise or peer influence.

For example, if you want to watch movies from Netflix or Amazon Prime, you don’t have to think about what other subscribers like or which content they like.

You just need to select a subscription plan, pay for it, and bam! Start watching. That’s it!

A membership website can offer the same but is more like a “Birds of the same feather flock together” place. Like-minded people get together and share their own knowledge, experiences and expertise with each other.

Extra opportunities to meet and engage

You may have noticed many organizations that offer memberships also offer meetings, events, seminars and other ways to engage.

This feeds into that extra feeling of community and belonging where you’re getting much more than just access to a service in return for your money.

The value of belonging cannot be overstated. It’s an integral part of being a human and feeds into our inherent desire to be part of a peer group or community where we feel valued.

In a world where people feel more isolated than ever, where views are becoming more and more polarized, the value of belonging somewhere is incredible!

Final words on membership vs. subscription

Both membership and subscription pricing models aim to provide services based on recurring payments.

The key difference between them is:

• Subscriptions are transaction-based where you pay money in return for a service.
• Memberships provide a service but also access to a wider community and the opportunity to belong to something larger.

If you’re more interested in offering a service you can build up into a thriving business, that’s the model to go for.

If you’re more about building communities and engaging with members for slower, more gradual, but richer growth, the membership model may be more your thing.

Fortunately, membership plugins like SureMembers and community builder tools like BuddyBoss can help you create either a subscription or membership website.

Whatever model you choose, if you use some of the examples in this post as inspiration, you stand a good chance of making it a success.

Good luck with it!