Membership Pricing Models and Delivery Methods

Pricing is crucial, but it’s a highly misunderstood business decision. Creating the right pricing for a membership site, especially one that’s just launching is daunting, even successful online entrepreneurs struggle with this.

While there are many ways to adjust your pricing plans, once your site is up and running, starting with the right foundation will make it easier to improve. If you don’t have a lot of experience, study how your customers react to certain tactics.

Setting a pricing strategy can be a challenging task. There’s no easy answer on how to create the right pricing strategy, but here are 8 pricing models worth exploring.

Fixed-Term Pricing Model

For a fixed-term pricing model, the membership levels have a set term with expiration. And members must renew to maintain their membership. This pricing model is commonly used for a set term of the calendar year (January 1 to December 31).

This is a popular pricing model for traditional organizations and benefactor groups that report membership annually and require members to “renew” their term every year.

You can be creative and innovative with this pricing model by offering discounts for the early renewals, giving discounts for the purchase of multi-year memberships in advance or you can prorate membership for those who sign up mid-term.

This pricing model is great if you don’t want to produce, edit and update content regularly. But if you’re continually creating and adding new content on your site, you may give too much for too little with this model.

Because members who have paid a flat fee to access your content will be receiving value from you every time you add new content—and you’re not profiting from it.

Recurring Subscriptions with Fixed Price per Period

This is a common pricing model, where you can charge a specific price “per month” or “per year” for the life of the membership. Some payment gateways also allow pricing per week or custom periods like every 3 months.

Recurring subscriptions work well for newsletter-based membership sites, sites where experts or coaches create the content and listing sites and online social communities.

However, to use this pricing model, you must deliver value each term continually. Because if your members are paying you weekly or monthly, you must deliver “new valuable material” each week or month.

It’s easy to set up this model with the Paid Membership Pro plugin. You can do this by setting an initial payment and a recurring subscription of the term of your membership.

Free or Reduced-Rate Trial Periods

I’m not a fan of this model, but it’s common. If your goal is to get more people to use your service or product, you can use the free trial model. And when you’re ready to earn money, switch to a model that charges based on the value of your service or product upfront.

The free trial model charges a lower rate initially, hoping to hook the members into maintaining their membership after the trial period ends. This pricing model is commonly used by online software and tools, and other digital communication or financial tools.

When using this model, it’s essential to remember you must prove you’re the worth the full-price membership during the trial period. Don’t price yourself so high that people can’t maintain membership at the full rate.

Also, don’t deliver all the value of your membership during the trial period because there’ll be no reason for members to stay.

If you want to use this model, offer a reduced rate trial instead of a free trial. This’ll force your members to be committed to your product and it’ll protect you from the workload created by tons of free trial members that don’t intend to stick around.

Front-Loaded Pricing Model

This is where you can charge a higher amount at sign up and then charge a lower rate at each term. For example, you can charge a single upfront higher cost or an installment such as $150 per month for the first 3 months and then $15 per month.

This is a great option if you deliver the most value in the first few months. And it’s a common pricing option among health and fitness websites that focus on weight loss.

Installment Plans

Installment plans are like the front-loaded membership, but they don’t have the ongoing, recurring payment. This model is perfect if you want to charge a high price but you know that your audience can’t afford the large expense in one payment.

You can set up this option by setting an initial payment and a recurring payment of the term of your membership, with a “payment limit.” Also, you can opt to set an expiration date on memberships.

For example, for a membership level that you want to charge $600 for 4 months and maintain the member’s membership for 1 year, you can set:

• Initial payment to $150
• Recurring subscription to $150 per month
• Billing cycle limit to 3
• Expiration of 1-year

However, when using the installment plan, make sure you lock a member in so they pay the full installment. Because if you’re giving members a product worth $600 and they cancel in their subscription the second month, you’ll lose a huge chunk of money.

One-Time Pricing Model

You can combine lifetime membership with almost any pricing model you choose. You can opt to offer a reduced-price lifetime plan for a limited time as an incentive to early adopters.

Or you can have the lifetime plan always available to those members who want to pay once without having to worry about recurring subscriptions.

To know what to charge for the lifetime plan, take a multiple of your monthly membership, for example, 30x a monthly membership or 2.5x an annual membership rate. Essentially, your lifetime plan should offer the same “member lifetime value” as someone paying per period.

Therefore, having a good estimate of your renewal rates and member lifetime value will help you find the sweet spot.

Also, you can opt to use a higher-priced lifetime plan as a decoy to make your regular price look like a better deal. Doing this will make sure you get a bigger bonus when a member opts for the high-priced lifetime plan.

It’s easy to set up this model with the Paid Memberships Pro plugin. You can do this by setting a one-time initial payment on the membership level with no recurring subscription or expiration.

Group Pricing/Umbrella Membership Plan

This pricing model is useful if you have a breakdown of individual members and corporate or company-type members.

With this model, take the individual member price and offer a discount to the parent account that is buying more than one membership at a time for a group of people. For instance, you can offer a single membership for $150 per month and a group membership for $600 for a 5-member organization.

Add-on Pricing Model

For this model, you’d charge users a base price, and they have the option to select additional membership features.

These features can be added benefits for a blog category or newsletter subscription, or a la carte features of memberships, such as consultation phone calls, “one-off products,” or annual resume review services.

This model is commonly used by traditional newspapers that provide online and optional physical printed editions.

Membership Durations

Aside from considering how much you should charge you also have to consider how often you should charge.

It’s easy to calculate a monthly price for the membership fee, but there are many durations you can choose from. Here are some membership durations and some pros and cons so you can decide which makes the most sense for your business.

Monthly

This is the most common membership duration around, and it’s for a good reason.

Membership site owners like monthly payments because it offers them a predictable, steady income per month. And it inspires members to log in frequently to make the most out of their membership fee.

A monthly duration is perfect for membership site businesses that drip feed content. You get to offer members continuous value and they continue to pay for that value.

Also, if there’s an issue with a member’s payment method, you only lose one month’s payment.

For the member, if they use a site and they decide that it’s not a good fit for them or it doesn’t fit their budget, they get to cancel the membership after the first month.

The major disadvantage of a monthly membership subscription is the reduced risk for members. Since it’s easy for them to cancel their membership, they’re not too invested, money-wise.

And as the site owner, it becomes difficult for you to build relationships with members if they aren’t sure they’ll stay. Building relationships is crucial in keeping members, but it also involves emotional investment from and you may not see a return.

Annual

An annual duration requires charging an annual membership fee. This can be challenging to your prospects because all they see is a dollar amount they have to pay when they aren’t sure of the value they’ll get from you.

But this makes sure you get high quality and serious members that engage frequently with you and other members. And they’re more receptive to your content and give more feedback.

When members pay a large amount, they’re more likely to achieve results and they’re heavily invested.

With annual payments, you’ll have more room for promotions and discounts without severely reducing your projected profit margin.

The major drawback of an annual duration is that a lot can change in a year. Priorities change, circumstances shift, life happens. Sometimes members may forget about the membership and you may have members trying to have payment reversed because “they don’t remember signing up.”

Quarterly

This is a compromise between charging monthly and yearly. This helps to get more committed members than those paying monthly for a more affordable price than an annual subscription would cost.

Monthly/Quarterly/ Yearly

You can offer these three options to your members so they can choose what type of commitment they want to give your membership site.

And having an option to change their payment duration can help to keep members who otherwise will cancel if they can’t afford a one-time annual fee for reasons beyond their control.

However, if you offer these frequencies, make sure the prices make sense. For instance, your annual fee should be cheaper than paying 12 monthly subscriptions. The same for your quarterly fee: it should be cheaper than paying 3 monthly fees.

Also, when members pay for longer durations, make sure you offer them additional value by offering more member perks and privileges.

However, no matter how convenient flexible durations seem, they may overwhelm you. If you opt to have the three recurring payment options, make sure you monitor accounting and you must have a consistent content strategy to make sure you provide value to your members.

Lifetime Duration

Depending on what your membership site is about, it may make sense to offer lifetime duration.

For example, if you’re offering a single course or product with no additional content required: offering a lifetime membership may be ideal. But if you’ll keep updating the content for members who will not continue paying for that up-keep, then it makes no sense to offer a lifetime membership.

Because if you drip feed your content, you’ll lose a lot of revenue if you offer a lifetime membership. Because your monthly costs will continue coming in and at some point, you’ll have to hire more members to help with content-creation all while your lifetime members continue getting the access to valuable content you struggle to create every month.

What does lifetime mean? How long should lifetime members expect to have access to your content? 3 years, 5 years, or 10 years? Seems like a “lifetime” membership is vague.

Regardless of what membership duration you choose, make sure it works for both you and your members.

Delivery Methods

Adding a membership element to your business is an incredible way to bring in recurring revenue and build a loyal fan base—but you must have a content delivery strategy that suits your product and accommodates your audience’s needs.

You can choose virtually any format to share your expertise with your audience. But matching your service or products to a content delivery method that highlights your unique offerings can set you apart from the competition.

Choosing the right delivery method will determine the effectiveness of your membership site. Because members drop out of membership sites for many reasons: feeling overwhelmed is one of them.

And the more crowded your content library is, the more anxious new members will feel. Also, if the content library is scarce, new and existing members may feel your membership isn’t worth their money. Both scenarios will cause cancellation.

The key is to find the right balance between overwhelming and impressive. These are common delivery methods to choose from:

Email Delivery

An email list is a great way to create a thriving membership site. The ability to add potential and existing members to an email list that you can message at the touch of a button is great. With email delivery, you can send one-offs messages to all of your members to let them know about the improvement to your membership site.

And using the best email software, you can create a series of emails that you can send automatically to new members once they sign up. This will help you create mini-courses and tutorials which you can send through email for a certain period.

So if you want to build a pre-launch list for your forthcoming membership site or survey your existing members to know what they think of your membership site, you can use the following email services to deliver the content to your members:

MailChimp

MailChimp is a great option, especially if you’re not ready to invest in premium email software or service yet. Its free plan lets you add up to 2,000 subscribers and send up to 12,000 emails per month.

You can use the tools available on the free entry-level plan to design custom landing pages to promote your email list. These pages can focus on persuading visitors to join your membership site, without the content that’s usually on a WordPress page getting in the way. So if you don’t the skills or the time to create your own custom landing pages for your membership site, then MailChimp is ideal for you.

The free plan also has an opt-in form builder that makes it easier to create stylish sign-up forms for your newsletters and mini-courses.

ConvertKit

ConvertKit is one of the newest email software you can use to deliver your membership site content to your members. Because of its impressive features, stylish user interface, and focus on customer support. ConvertKit is a service you should consider.

But unlike MailChimp, there’s no free plan, but there’s a free 14-day trial. And with prices ranging from $29 per month, or less when paying yearly, this service isn’t too expensive. Especially, if you’re serious about starting an email list for your membership site.

ConvertKit offers customizable sign-up forms and landing pages that you can easily display on WordPress. Also, it gives access to detailed user reporting.  

Plus, it helps you to create automated emails that you can send when users meet specific requirements. And the drag-to-drop email sequence builder enables you to set up your list once and then get back to focusing on growing your membership site.

ConvertKit is ideal for membership sites, such as those running online courses and selling digital products.

Active Campaign

Active Campaign is the biggest name in email marketing software. But despite being a market leader, their plans start at an affordable rate $9 per month if you pay annually.

On their entry-level lite plan, you can send an unlimited number of emails and use the drag-to-drop feature to create attractive content for your members. However, the ability to remove the Active Campaign logo from your messages is reserved for high-priced customers.

With Active Campaign, you can segment your members into groups, such as potential new members and existing members, and send each group different content. You can even segment your members better and send messages to those who visit certain pages on your membership site. Plus, with Active Campaign, you can set up automated messages that go out to members who reach the last page of your membership site, with details about the next course.

WordPress Membership Sites

Regardless of what type of membership site you want to create, there are a few relevant concepts you should focus on.

You need members on that site. These members can be customers, users, or visitors; whatever you call them, but you’ll need a way to store information that belongs to those members, such as the type of access a member should have, the type of billing to associate with the member, and other details.

WordPress has a built-in system for members and capabilities, which you can leverage when building your membership site. Plus, it has some plugins that can help you convert a standard WordPress site into a membership site. This’ll allow you to have more potential for flexibility and personalization.

You also need to provide value to your members. What’s the point of becoming a member? Many sites use content to offer value to their members: this can be exclusive articles, blog posts, courses, or products only members can buy.

In other cases, this can be the interaction with other members, such as members-only forum or directory.

This is a win with WordPress since it’s a content management system. So WordPress is ideal for any content-based membership site. It allows you to add content easily to your site, categorize, and share that content.

WordPress is also great for interaction between members and for many people. WordPress is perhaps the easiest way to start a membership. Once you get the hang of it, you can have your membership site running in an hour or two.

To get started with a WordPress membership site, you require four things:

• A domain name i.e. your website’s URL.
• A hosting account, you can try BlueHost or WPEngine.
• A membership plugin
• A payment gateway (PayPal and Stripe are great)

That’s it.

However, to create a successful WordPress membership site, decide which plugins work best for your specific needs, such as the type of content you want to create and sell.

Pros:

• With a WordPress membership site, you have more room for flexibility and personalization.
• There’s no limit to the type or number of membership sites you can run.
• With a WordPress membership site, you own everything. You don’t have to worry about your content and members disappearing one day.

Cons:

• WordPress has a learning curve. It’s not a set it and forget it kind of system. You must monitor it regularly. And depending on the type of membership site you want to build, you may have to pay for different tools like plugins, landing page creator, themes, and payment processors.

Online Resources for Creating Memberships

Membership platforms offer you total control over access to your content.

Regardless of the platform, you select, you’ll get varying levels of flexibility of functionalities and website design.

WordPress membership plugins like MemberPress, WishList Members offer better flexibility, but they’re hard to set up and maintain. But hosted platforms like Thinkific and Teachable are easy to set up; however, they have fewer customization options. 

A membership plugin can help you create a membership site. And it can you to create email lists, deliver free content to create a loyal following, and charge for access to exclusive content.

Using plugins you can convert your WordPress blog into a membership site.

Here are several of the best online resources that can help you create a membership site to deliver valuable content to your audience.

MemberPress

This is an easy-to-use WordPress Membership Plugin. This plugin is easy to install in your site and it can help you start charging for access instantly.

MemberPress allows you to create an unlimited number of product pages, and membership levels. Plus, it has other features such as coupon module, product groups that allow you to create a large scale membership site, and access rules that allow you to create sophisticated membership levels.

Also, its report feature tracks the latest insights in your business and they help you optimize your site.

WishList Member

WishList Member can help you create a membership site on the fly, instead of spending days, or weeks to build a site that fully resembles your end goal—to allow members to view exclusive content and register for premium features.

With this platform, you can create many membership levels, and give your premium members timely updates. Plus, you easily integrate WishList Member with your current WordPress installation.

WishList Members also enables you to create a special ‘error’ messages when non-members access your content.

EasyMember Pro

This is popular among marketers who sell marketing courses and video related course content. Its basic features include content dripping. Also, EasyMember Pro has a great affiliate program which allows you to promote your products and services to your members.

It helps you secure all your download links and setup many membership groups and levels.

Using this software, you can offer special one-time offers and incorporate payment processors like PayPal.

WooCommerce Memberships

This is a popular killer e-commerce plugin. If you have products you want to sell and you’re looking to a membership option, this is a great option for you. You can create, sell courses and create membership levels all-in-one.

The plugin enables you to reward members and offer perks. You can sell specific courses to particular groups, such as existing members only.

WooCommerce Memberships is a plugin for restricting your site’s content. This plugin is easy to use and brings your content, shop, and memberships together in your WordPress install.

As a membership site owner, you put a lot of work into creating your exclusive content, so WooCommerce Memberships allows you to schedule when members can have access to your content.

You can drip feed the content and you can require that one be a member for a certain period before accessing certain posts or pages.

Teachable

This is a hosted platform for protecting content and selling in a membership system. It’s one of the popularly used platforms and its design is spectacular.

This platform is ideal for beginners, or people who don’t have a lot of tech experience. With this platform, you can create your membership site without worrying about hosting, design, or marketing integration.

Plus, you can host as many online courses and members as you want. Also, you can create a fully responsive membership site that offers members a consistent and learning experience across smartphones, laptops, tablets, and desktops.

Teachable, also allows you to customize your content with an intuitive user interface. You can create and design your homepage, courses, and sales pages to fit your audience’s needs.

Thinkific

This hosted platform that offers you everything you need to create and market your membership site even if you don’t have the technical skills.

With Thinkific, you can turn your existing content into beautiful courses, and you can create new courses using the creation tools available. This platform supports videos, PDF, quizzes, and multimedia content. Plus, you can easily create course landing pages which are optimized for sales, with complete control over pricing options and content delivery.

Kajabi

This is an all-in-one hosted platform for creating membership sites and launching marketing campaigns.It offers solutions for everything from email marketing, hosting live events, drag-and-drop page builder all under one roof.

With Kajabi, you can create online courses and customize your content delivery. Plus, you’ll have access to done-for-you, user-friendly membership sites.

When deciding which online resource to use to create your membership site, think about the feature you can’t do without:

• Will you drip-feed content?
• What do you care about more, how easy it is to set up or customization options?
• Do you want it to include hosting?
• Are you giving a trial period?
• Can members cancel their membership on their own?

However, the most important factor is how much time and resources you want to dedicate into the technical part of the membership site development. Remember, every second you spend worrying about the site design and functionalities is reducing the time you should spend creating killer content. If this is your first time, I recommend you keep things simple and painless with a hosted platform like Teachable.

Final Thoughts

Membership sites are lucrative, but they’re not for everyone. However, if you’re committed, consistent, and you’re ready to put in the work, then creating a thriving membership site might be for you.

To succeed, all you have to do is follow a sound, strategic game plan, choose the right pricing model, settle on a price, and decide if you should charge monthly or annually.

Hopefully, now, you’re feeling confident and have a handle on the basics that’ll help you get your membership site up and running in a few days.

Membership Pricing Checklist

Coming up with the right membership pricing that fits both you and your audience takes time and it can be a daunting task. Use this checklist to figure out things to consider and do to make sure your price points are right for your audience and what you’re offering.

Pricing Scenarios

• o Your price should always match the value you’re offering.
• o Make sure your membership site delivers value to the members.
• o Deliver value consistently over the lifetime of membership.
• o Pricing your membership contrary to the value delivered sets you up for failure.

Membership Site Earnings

How much do you want to earn from your membership site?

• o Think about value pricing in terms of how much you want to earn.
• o Be honest with yourself and set a realistic revenue goal. The revenue goal will help you determine the right membership pricing.
• o Figure out how you can deliver value along the timeline of the membership to keep members happy.
• o Test with a trial-and-error process before you choose a base price to charge.
• o If you charge too much, you’ll struggle to attract new members. If you charge too little, people may doubt the value you’re offering. Find the right balance.

Factors to Consider

• o Consider the cost of creating the content or products you’re offering.
• o Take into account the quality of what you’re offering.
• o Consider what your competitors are charging compared to its perceived value.
• o Figure out if you want your membership site to be accessible to everyone.
• o Determine how much personal access you’ll offer. To get maximum profit, make sure your pricing is relative to the value exchange and access to your time.
• o Consider the operational costs of running and marketing your membership site. Determine the profit you want to make after deducting all the costs.

Membership Pricing Worksheet

Pricing is a concept that many membership site owners ponder with as they shape their membership sites. Use this worksheet to estimate your profits based on the following pricing models:

Fixed-Term Pricing Model

To estimate your profits using the fixed-term pricing model, you first need to calculate the total revenue generated per year and then deduct the costs incurred by producing and marketing your membership program.

Task: Determine the projected customer base.

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Task: Determine the price to charge for each membership-type annually:

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Task: Calculate the total revenue by multiplying the number of members who subscribe annually with the price charged per member.

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Task: To calculate the profit made, deduct the costs incurred in producing and marketing your membership site from the total revenue generated.

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Front-Loaded Pricing Model

To implement the front-loaded pricing model, you’ll need to charge a higher amount at sign up and charge a lower rate at each term.

Task: When do you offer the most value?

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Task: Determine your projected customer base.

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Task: Set a single upfront higher fee for the period/months you offer the most value.

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Task: Set a lower rate for the remaining period.

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To calculate profit:

• Determine the number of members sign up.
• Multiply the number of members signed up with the single upfront high fee. Then, multiply the total with the number of months members have paid the high fee.
• Multiply the number of members signed up with the lower rate and multiply the total you get with the number of months members have paid this rate.
• Add the two totals to get the total revenue generated.
• Determine total costs incurred in creating and marketing your membership site.
• Deduct total costs from the total revenue generated to get the profit generated.
• To make things easier, do this for an average year.

Installment Plans

To implement this model, set an initial payment and a recurring payment of the term of your membership, with a “payment limit.” Also, you can opt to set an expiration date on memberships.

Ways to approach this:

• Set an initial payment.
• Set the recurring subscription rate.
• Set the billing cycle limit.
• Set the expiration date.

Task: Determine your projected member base.

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Task: Determine your gross revenue.

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Task: Calculate your profit by deducting incurred costs from the gross revenue.

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