Choosing a pricing model for a membership site

The question underneath the question

People write to me asking what to charge. Nine times out of ten the number is not the problem. The problem is that they have not decided what a member is buying: a stream of new things, a finished body of work, access to other people, or access to me.

Those four purchases behave differently. A stream is worth paying for every month because it keeps arriving. A finished body of work is worth paying for once, and paying again only if it grows. Access to other people is worth paying for as long as the room stays good. Access to you is worth paying for while you have time to give.

So before you look at a price, write one sentence: a member pays me because ______. If you cannot finish the sentence without listing four things, that is the first thing to fix, and it will show up again in structuring member only content.

The four models that actually get used

I have seen plenty of clever pricing. Almost none of it survived contact with real members. What survives is one of these four.

One price, billed monthly

The simplest thing that works. Everyone pays the same, everyone gets the same, and the member can leave whenever they like. It suits a site that publishes something new on a regular rhythm, because the member is renewing a habit rather than a purchase.

The cost of this model is that you are re-earning the sale every single month, and you feel every soft patch in your publishing almost immediately.

One price, billed annually

Money arrives up front, renewals happen once, and the decision to stay is made in a calmer frame of mind than a monthly charge invites. It suits a site where the value takes a while to arrive: a long curriculum, a seasonal subject, a reference archive.

The cost is that you carry a refund liability for months, and your renewals stack into one or two weeks of the year, which makes a bad month look like a catastrophe.

Monthly with an annual option

The default for most sites now, and for good reason. The monthly price is the shop window and the annual price is the reward for people who have already decided. Two months free for paying annually is a fair discount and easy to explain.

The cost is bookkeeping and a slightly more complicated cancellation flow, since you now have two kinds of member with two kinds of expectation.

Tiers

Two or three levels at different prices. Everyone wants to build this, because it looks like free money sitting at the top of the page. It is the model I talk people out of most often.

Tiers only work when the levels differ by something the member can see before they buy and feel after they buy. More content is rarely enough. Access to you, small group time, or a genuinely different format usually is.

What tiers really cost

Three things, and none of them appear on the pricing page.

1. Support load. Every tier boundary becomes a question. Which tier am I on. Does this include that. Can I move up for a month. Multiply the questions by your member count.
2. Decision fatigue at the door. A visitor who has to compare three columns is doing work. Some of them will do the work and buy. Some will decide to come back later, which usually means never.
3. The stranded middle. A middle tier tends to collect people who wanted the top one but flinched. They are the least happy members you have, and they churn at a rate that will surprise you.

If you want the revenue that tiers promise without the cost, the cleaner route is one membership plus a small number of paid extras that a member buys when they need them.

Three questions that settle it

When someone asks me to pick a model for them, I ask these and the answer usually falls out.

1. How often does something new appear? Weekly or more, monthly billing fits. A few times a year, annual billing fits, and monthly billing will punish you in the quiet stretches.
2. How long before a new member gets something they value? If it is the first evening, monthly is safe. If it takes six weeks of steady work, monthly billing will lose people before they arrive at the good part, and onboarding a new member becomes the thing to fix first.
3. Can you serve two audiences at once? That is what tiers ask of you. If the honest answer is no, you have one membership.

Setting the number itself

Once the shape is settled, the number is mostly arithmetic and nerve.

Work out how many members you can serve well. Not how many you could sell to, how many you can answer, host and publish for without the quality dropping. Divide the income you need by that number. That is your floor. If the floor is higher than anything you would dare charge, the model is wrong, not the market.

Then look at what a member is comparing you to. Not other membership sites. A member is comparing you to a book, a course they half finished, an evening class, or an hour with somebody who knows the answer. Those are very different price anchors and you get to choose which one you stand next to.

A low price does not make a site easy to sell. It makes every other doubt about the site louder, because nothing about the offer says this was made by someone serious.

Changing the model later

You will want to. It is survivable, and the rule is simple: existing members keep what they were promised until they choose otherwise. Grandfathering costs less than you fear and buys goodwill you cannot buy any other way. I have written the whole procedure up in deciding when to raise your prices.

What I would do first

1. Finish the sentence: a member pays me because ______.
2. Pick monthly, annual, or monthly with an annual option. Leave tiers alone for a year.
3. Work out how many members you can serve well, and set the floor from that.
4. Write the cancellation terms in the same plain words as the sales page.
5. Leave the price alone for at least two quarters so you can see what it actually does.