One of the most important aspects of starting a membership site is to determine how much the membership will cost its members. Like with any product, there are many factors that go into pricing - issues such as the cost of the technology, cost of the products, time spent on the membership each month, the number of members you believe you can keep, and the profit you need to earn. Let’s look more deeply into these issues.
Cost of Technology
First, figure out what technology you plan to use for the membership. Include the cost of upgrading and maintenance, and everything that may need to be paid for to keep the membership going in terms of the technology.
Cost of Products
How much will it cost you to maintain your commitment to fill the membership with content? For example, if you’ve promised a full information product monthly to do with this niche, how much will it cost to produce?
How much time do you plan to commit to the membership each week and what is your time worth? For example, if it’s going to take a couple of hours a day, you need to count that in the cost.
How many members do you think you can get? Your audience may consist of thousands of people, but thousands aren’t going to join or stay members. More than likely 2 to 5 percent of your audience will join if the price is right. Most will only stay paying members for four months.
After expenses, how much do you need to earn? Will this be your main source of income? If you know that it will be, and you know that after expenses you’d like to make $2500 a month from the membership, this will get you closer to the right pricing point.
Audience’s Ability to Pay
Your niche audience has an income and you need to know that information, including how much income they can spare to spend on something like your membership.
The Value You’re Offering
Even when people think they cannot afford something, if it offers a lot of value, they’ll come up with the money.
Your Niche’s Popularity
If your niche is super popular, and there are many other people doing the same thing, you may need to consider how you can differentiate yourself. But, if it’s really popular, that means more people to join your membership too.
Is anyone offering the same thing you’re offering? If so, how much are they charging and how busy are they? If you can spare the money, join a few of your competitors' membership programs to find out how it’s working for them and how you can do it better.
Pricing the membership program you’re offering has many factors involved, but you’ll be really glad you gave it thought before just slapping any price on it. Consider all factors, including your competition, and you’ll get started off on the right foot. Remember, you can always raise or cut prices based on what happens after you launch. The Bean Counters Bookkeeping would love to take a look at your numbers and help you determine the state of your accounts. Need help? Give us a call!