Considering increasing the price of your membership?
Perhaps this is something you've been thinking about for a while, but are reticent to start the process.
Or maybe other people are telling you that you should do it, but you're not sure that now is the right time.
In either case, we understand your reluctance.
Because pricing your membership may sound like a straightforward thing to do…
But in reality it's often not!
You don’t want to under price it as it will be seen as cheap…
But you also don’t want the subscription fee to be so high that no one signs up.
And then of course there's the timing of the increase…
It needs to be right.
And there are some clear indicators to help you decide if now that is that time…
Let's walk through 11 of them in detail:
1. You’ve never changed the price since you launched
When you first start your membership, you’re still very much finding your feet.
And in the early days, new members are taking a bit of a risk signing up.
They're stepping into the unknown and taking a punt on you and your membership.
Your members when you first launch…
Because not only is your membership brand new and you're at the stage where you're still figuring things out…
Making tweaks to your content, changes to your site and potentially making a few small mistakes along the way!
But there's a slim chance that once you settle into the realities of life as a membership owner…
You may actually decide that it's not the right move for you and scrap the project.
After all, memberships aren't the right fit for everyone…
So it makes sense to have a lower price point at the beginning of your membership journey.
But that was then…
The chances are a lot has changed since you first launched.
You’ll have ironed out the mistakes, you’ll be more organized and more used to running your membership.
So if you’ve established your site and have never changed your price, now may be time to increase it.
2. It’s been a while since you last increased the price
If you've implemented a price increase before, but it’s been more than two years since you last did it…
This might be a sign that it’s time to revisit it and consider doing another one.
Because your site will have changed in the past two years!
When you think about:
- How many more members do you have?
- How much more content or features do you have?
- How much more connected is your community?
- How much better are you as the leader of your membership?
The value you deliver to members will have significantly increased.
Which leads us nicely onto the next sign that it's to increase the price of your membership…
3. You’ve significantly increased the value
Over time you'll have added more, high quality content, new features, your community will have improved.
Your member experience will be better, you'll have more member success stories and proven results.
In other words, your membership will have gained more collateral.
And all of this proves why it's worth making the investment and joining your membership…
So if you know the value someone can get from your membership has increased, so to should your price…
It’s a no-brainer.
4. Costs have increased
Memberships tend to be a high profit business because they're one to many…
So you don't typically have costs associated with each new member you.
However, it still costs money to run a membership.
Software, web hosting and so on…
And as your membership base increases, so do those costs.
You may need to buy more sophisticated software.
Or you may need to hire employees or outsource work to others.
You keeping an eye on your profit margin…
As your member numbers increase, you could see your profit margin get smaller and smaller…
And when you get to this point, it’s a good indicator that you should raise your price to ensure you maintain a healthy profit margin.
5. You have steady sales… but you’re not really working hard for them
If you have a steady stream of sales, but you’re not really putting much effort into getting them, it may sound like you're living the dream…
But often the reality tells a different story…
Because it's likely that your membership is too cheap.
And while this isn't necessarily a bad a thing…
Having none or very limited pushback from potential members over price probably means you can afford to bump it up a bit.
6. No one ever mentions cost as an objection to joining your membership
With memberships, you’re always going to be too expensive for someone…
It doesn’t matter what you charge.
But if you’re not hearing any feedback of that nature…
No one is telling you that it's too expensive…
Then this is a sign that your membership is cheap.
And while that might be great for your members…
If you want to increase your profit margin, this shows you’ve got scope to do so.
7. You get a lot of feedback about how cheap your membership is
Are people always commenting on how your prices are so low?
Are they surprised they get so much for their money despite how little you charge?
That’s another sign that your membership is too cheap and you need to up your price to reflect the value provided.
It’s not a bad thing to be seen as over-delivering, but it needs to be within reason.
8. Your pricing is less than what typical memberships cost
There’s no standard price in the membership world…
But generally, you’ll see business-to-business (B2B) memberships priced around $30 to $70 a month.
Business-to-customer (B2C) memberships are usually around $15 to $30 a month.
You’ll get memberships that vary widely from those figures, but those figures should give you a ball park.
Now, just because you’re charging $15 for a B2C membership doesn’t mean you automatically need to up your prices…
But if you’re charging way below that, say $3 a month or $10 for a B2B membership, then it’s time to rethink it.
9. You’re charging way less than your direct competitors
To get a bit more specific, if you’re charging a lot less than your direct competitors…
This is another sign that you’re under-pricing.
If you’re doing this deliberately, I’ve got some bad news for you…
Competing on price alone is the worst way to compete.
It’s a race to the bottom…
And all it takes is for a competitor to launch a special offer or drop their price, then you lose your entire advantage.
10. People are concerned your membership isn’t high level
Another problem with competing on price is that it affects the customer’s perceived value…
You might think it makes you competitive…
But as the saying goes, “you get what you pay for.”
You don’t want people to think you’re cheap because your membership is low quality.
Not what you want your members to think…
Think about it…
Would you buy a $2 flight from an airline you’ve never heard of before?
Probably not.
Pricing sends a message and if it's not roughly in line with someone's perception of the value they're looking for, then they'll assume you're just not up to scratch.
11. You offer significantly more than similarly priced memberships
If your price is roughly the same as the competition, but you know you offer 10x more value, then your price should reflect that.
A good example of this is if you offer more hands-on support or one-to-one contact with the membership leader.
With most memberships, you provide members with the tools, but then it’s very much a DIY approach for them to use those tools to solve a problem.
But if you can offer more support to reduce that burden, then this gives members a huge amount of extra value.
Value not typically found in most other memberships.
If they're lucky enough to get that extra support they can’t get elsewhere, that’s a great reason to bump up your prices.
Yes, you may be more expensive than the competition…
But as long as you market yourself well and reflect that extra money = extra value, it shouldn’t be an issue.
So if you've been considering increasing the price of your membership…
Hopefully this has all helped shed some light on whether now is the right time to do it…
If you think it is, that's great!
Moving forward you need to consider your strategies for increasing your membership pricing to get started.
And if it's not the right time…
These are 11 things you should keep in mind for when it comes around.
