How to Price Your Membership Site (With Pricing Calculator)5 minute read
If you want to generate recurring, leverage income every month, membership sites are for you.
With this business model, members pay a monthly or annual fee to access ongoing content delivered through the site.
Learn how to create a membership site: How to Create a Membership Site and Generate Recurring Revenue
There are many ways to structure a membership site, which is why coming up with the perfect price can be challenging. In today's article, we will share our top tips that will help you decide how much to charge for your membership site's access, in a way that benefits both you and your members.
Don't forget to try out our online course and membership site pricing calculator to help you come up with the ideal price for your program:Membership Site Pricing Calculator
Choose Your Membership Site Pricing Strategy
The most common pricing structure for membership sites is to charge a recurring monthly fee in exchange for granting access to your gated content. This strategy works well with most membership sites that offer ongoing content to their members.
If your customers want to keep accessing your content over and over again, then a monthly fee can work well to attract and retain new members. This also will ensure that you are receiving a recurring stream of revenue each month.
While charging a monthly or annual fee is the most popular option for membership site owners, it is not the only way. You can also decide to charge a one-time fee to gain access to your site for a limited amount of time. For instance, you could say that members can get one-year access to your site for a one-time payment of $1000.
This strategy has its pros and cons: depending on your content, the one-time fee can be a more enticing offer from your customer's point of view. However, other customers might not be comfortable paying a large amount of money upfront.
Another option is to split your one-time fee into a few installments. So using the same example, you could offer a year of access to your program for 3 installments of $400. If you are planning to use this pricing structure, a good strategy is to offer both options:
- A one-time payment option (for example $1000 for one-year access)
- An installments option (for example 3 installments for $400, for a total of $1200)
It is a good idea to make the installments slightly more expensive than the one-time payment since you want to incentivize your potential customers to choose the one-time payment option.
To make this offer even more enticing, you could also add a strong membership site refund policy to the offer. For example, if a customer purchases your membership site access for a one-time fee of $1000 but they are not happy about it, they can receive a refund within 30 days.
This way you are protecting your customers, offering them a great deal and incentivizing them to pay in advance so you can collect revenue to fund your program.
If you are still not sure which pricing strategy to choose, you could also experiment in offering all of them at once!
Let's keep the same example as before, but add the monthly fee option too. Following the same logic, the monthly fee should be more expensive than the installments, which should be more expensive than the one-time fee. Here is what it looks like:
- A one-time payment option ($1000) for 1 year of access + 100% refund guarantee for the first 30 days
- An installments option (for example 3 installments for $400, for a total of $1200) for one year of access
- A monthly fee of $110 (total for 1 year is $1320)
3 Questions to Ask Yourself to Find The Best Price for a Membership Site
Now that you learned about the most popular options for structuring the price of your membership site (recurring monthly fee, one-time payment, installments) let's see how to come up with the actual number and offer the best price for you and your members!
#1: What is the Value of Your Membership Site?
How can you put a price on knowledge? There is no tangible feature, no measurable attribute or production cost to your membership site.
What you can try to quantify is the value your members will receive by joining your membership site.
There is no rule to figure this out, but trying to link the price to its value can help you head in the right direction and gain an approximate idea of the amount to charge.
A great example is membership sites that offer a major - even life - transformation to the members who join. It gets even easier if your membership site can help your customers make a profit or get a monetary return on investment thanks to your teachings.
If this is the case, you know that you can charge a high or premium price for your membership site access. Whereas membership sites that teach a hobby or a less revolutionary topic to the eys of the members are generally priced more moderately.
#2: How Much is Your Audience Willing to Pay?
In sales, the term "Willingness to Pay", refers to the maximum amount a customer is ready to spend to purchase a product or service.
Generally, customers are likely willing to pay less than this threshold, however, they won’t pay a higher price than the "Willingness to Pay" amount.
Why is it important to understand how much your customers are willing to pay for your membership site? Businesses who manage to accurately calculate the "Willingness to Pay" amount can effectively maximize profit margin while capturing as much revenue as possible from their audience.
The problem is that different customers can have a different ideas of a fair price, and it's not that easy to find out what is the maximum amount they are willing to pay.
What you can do as a creator is carry out market research and understand who your ideal customer is. If you realize that your ideal audience is too broad, niching down can help you narrow your focus and craft a price that works well for all of your customers.
#3: How Much do You Want to Earn?
Another way to come up with the perfect price for your membership site is to calculate the price backward from your ideal revenue.
Your starting point should be figuring out how much money you want to earn in a certain timeframe, for example, ask yourself how much money you need to earn per year or per month to live comfortably? Make sure to include all the expenses related to building and promoting your membership site (your Heights Platform subscription, other software, marketing costs, ad spend and so on...).
Once you have this number, divide it by the number of students you ideally want to get in the same timeframe.
For example, if you know that you want to earn $5,000 per month, you need to get:
- 20 students who pay $250/month
- 100 students who pay $50/month
- 500 students who pay $10/month
When you are doing these calculations, keep in mind that a higher number of students is not necessarily easier to get, and it might actually be more expensive for you to attract more students.
You might also want to consider where your membership site will fall in your value ladder. Is it your flagship product offering, or is it meant to be a lower cost and lower value group offering, while a course or your one-on-one coaching might be the higher-priced option for those who prefer it.
If this sounds too complicated, we have created a membership site pricing calculator to help you come up with the best price for you:Membership Site Pricing Calculator
Create and Sell Membership Sites with Heights Platform
Heights Platform makes it easy for you to build your membership site, be flexible with your pricing strategy and start selling.
Set a monthly subscription amount, a one-time fee, or charge installments for learners to access your program. With Heights, you keep all your revenue. We do not take a commission from your earnings and do not charge any transaction fees!
Add a thriving community to your membership site using our discussion feature, where learners can chat about different topics, exchange ideas and gain valuable feedback from their peers and the creator, all without leaving your membership site.
Want to gain some inspiration for your next membership site? Check out how these creators are using Heights Platform to teach Italian cooking via their membership site: Online Cooking Course? Learn from the success of the couple who founded Rustico Cooking.