How to Price a Membership
If you've made a decision to create the site for membership or you're mulling it over because you're excited about the prospects of a community business model, that's awesome! Membership sites are amazing and offer the incredible capacity to expand in ways they're not seen elsewhere within the creation economy.
Just think about it. Imagine the possibility of bringing together groups of people around something important for you as well as them and guide them through the change they care about. That's the power of an online membership website.
But one of the hardest things about getting started is figuring out what is the proper price to cost for your product. How do you know what is the best price, so you don't be in the position of A. Working for nothing or, B. Charging so much that people are ejected.
It's good to know that we've got the numbers. So in this article, we'll walk you through our experiences on pricing an online membership website from our survey of 12,000 . (Don't think about it, if you want to start your Your own Mighty Network, you can try it for free! )
The article
1.1. Paid plans are sold
1.2. It's not necessary to have millions of fans
1.3. The growth process is natural
1.4. Paid membership drives engagement
2. Average membership site cost per Mighty Network
3. Questions to consider when determining the cost of a membership website
3.1. Does it scale?
3.2. How does it work in your model of revenue?
3.3. How much do you have to spend to stay on the right track?
4.1. Members must be properly invested
4.3. Take into consideration the options of your members
4.4. Pricing is based on the income goals
4.5. One-time vs recurring fees
4.6. Members Churn
What our data shows
Paid plans are sold
If you're nervous about choosing an pricing plan for your membership site and scaring people off, let's put your mind at peace. Our data shows that, the sites that provide paid-for plans, they are able to sell paid plans. 77% of them have the option of payment creating sales. This means that your odds of selling your membership very high! Which is good!
In the event that you're contemplating an online business model that is freemium, where people get free membership and then make upsells on their behalf, you're in luck here as well. They still boast an average conversion rate of 70% of their product.
You don't need millions of followers
Many of us members are selling memberships to communities without enormous followers. 53% of them are less than 10,000 followers!
The growth process is organic
Within the framework of a Mighty Network, the Host may allow members to invite others into the community. In a paid community it is possible to see this growth organically with people inviting their friends is twice the rate it is in a free community.
Paid membership drives engagement
The old adage is that people are able to appreciate the things they spend money on, and this is true of memberships, too. There is a greater degree of participation in our paid membership communities. It's not necessary to be posting 100 times a week to see it happen. The most successful Hosts on only need to post 2-4 times a week to keep their communities thriving.
The average cost of a membership site for the Mighty Network
The median cost for membership on Mighty Network is $39.55/mo. Many larger communities have this fee helps the creator full-time. However, even for a smaller community, this fee is a fantastic side hustle AND a way better monetization model than almost any other option for the creator-based economy. It would take tens of thousands or millions of viewers in social media to match this income.
With the capability to charge over $1000, you also can explore the most expensive programs and memberships without having to create a separate system.
Considerations to make when evaluating the cost of membership sites
If you're trying to find out what is the ideal price for your membership website, our data shows an average price of $15-$40. However, this doesn't mean that you cannot increase the price in specific instances, but it will take an approach.
Here are a few questions to lay the groundwork for pricing your own site:
Does it scale?
Not every membership site is all created to be the same. Some can scale endlessly, and there are communities that have hundreds of thousands of members in them. These massive communities allow creators the ability to provide membership at a lower cost as they're earning a return on scale.
If you're running a community that's smaller in scope, such as group coaching or a mastermind community that will be limited in members you can serve, it's likely that you'll need to charge more.
How does it fit into your business model for revenue?
The price of a site that is a member's club cannot be taken on its own. Consider it one of the components of your monetization model. If you offer upsells, like courses or premium group access, you might want to keep the cost of membership low, recognizing that it is easier to sell to existing members of your network than to make your product available to the public.
If you're selling the physical item the membership site is able to support, you might choose to create a customer-based community at no cost or for a small fee to help users use your product. Figure out how any membership revenue fits within your existing and future income sources.
How much do you have to spend in order to continue?
It's so easy to get enthusiastic about the potential of monthly recurring revenue. Since the internet is full of stories of people earning tons of money while doing very small, it's very easy to imagine that your local community could be your road to riches.
We hope that it is!
If you don't see a lot of new users signing up in the first month, what do you do to continue?
If you're planning to work in a community every month, what's your baseline of earnings you'll require for this duration?
For instance, suppose you're certain that you can gain 15 members (or perhaps you could offer 15 memberships in advance). Even if you just fifteen members next year, how many would you be able to charge them to make the community worth your time?
Pricing Aspects
As you've likely gathered in trying to decide the best way to charge a membership site There's not a universal formula that works for all sites. It's a matter of weighing a number of different factors unique to you. Let's look at some last things to consider:
Members must be invested
Like we mentioned earlier, one of the things that we observe repeatedly is that people appreciate the value they get for their money. This means that, while it may be counter-intuitive community that have a fee tend to be healthier and enjoy more engaged members.
Pricing based on values
One of the most tried and tested methods to think about pricing. Don't think about the hours that you invest in something to create it, think about the value it will bring to those who sign up. For example, if an entrepreneur joins a community and gains the experience as well as the guidance, instruction, and motivation to increase their company's revenue from zero to $100k per year, how much will that community's membership mean to them?
Consider your members' options
What ELSE could your customers have to spend money on to receive what they'll see from being in your community. If you're the fitness center to help people achieve their health goals, consider what they'd have to shell out to achieve those goals otherwise. Personal trainers? A gym membership?
Consider what members would have to pay to achieve their goals through different methods.
Pricing is based on revenue targets
Other factors which could affect your pricing strategy for your membership site is your income target. For instance, if you want to make $4,000/mo in order to quit your day job. You could utilize this amount to go back and establish revenue targets.
If, for instance, you believed there would be 100 members willing to be part of your group, you could charge $40. If you want to earn $4,000/mo as a group coach You might be able to decide that you do not want to create a group of 100 people. In that situation, you'll need to work backward based on your capacity. If you were aware that you could manage 6 groups per month that have 8 people in each, your fee for membership is a mathematical equation which is: 4000 6 x (6 8) equals $83.33/mo.
One-time vs recurring fees
The majority of the information we've provided above is based on an idea of regular fee for memberships that are monthly. But there may be instances where it makes more sense to charge a one-time fee. If, for instance, you have a high-value course that people can do within two weeks, and it comes with your membership You might think about the possibility that some people may choose to take the course before deciding to quit. It could be the case where something like a one-time payment that comes with six months of membership for free would be more appropriate.
Member churn
The new sites will not know this number yet, but once you've been up for some time, you'll be able to get a sense of what your membership churn is- e.g. how long members stay in the average, and how many quit each month. It can inform your pricing strategy to achieve a targeted value per member.
Conclusion
As you've seen above, there's no one answer for how to price your membership site. The best you can do is to take these elements into consideration and come up with the price that is reasonable for you based on what your users will get from the site.
And if you're looking to establish an incredible member-based network with a platform that lets you sell courses, host discussions or live streams, as well as connect with your members via the app, you can try for free!