Membership Pricing Made Easy

A membership pricing strategy is a plan for how much and how frequently you will charge for your membership. Netflix charges $15.49 per month, for example. The plan they followed to settle on that price ($15.49) and frequency (monthly), is their pricing strategy. And while Netflix is a subscription rather than a membership, the concept is the same: you’re paying for access at a set frequency. 

Memberships give access to content, instructors, exclusive perks, add-ons, and a community so your pricing needs to reflect that.

When you set the right price for your membership you’ll attract and retain more members. That means more money in your pocket.

Strategically pricing your membership is pivotal for sustainable growth and member retention. At Uscreen, we understand that the right pricing strategy isn't just about the numbers—it's about aligning value with the unique needs of your audience. By offering membership plans that reflect the quality and exclusivity of your content, coupled with the vibrancy of your community, you're not just selling a service; you're inviting members into a valuable experience. This approach ensures that members perceive real value in their subscription, enhancing retention and encouraging growth. Remember, successful memberships are those that balance affordability with perceived value, creating a win-win situation for creators and their community.

When membership pricing is set too high, it can deter potential subscribers, particularly those who are still evaluating the value proposition of the service. On the other hand, if the pricing is too low, it might not adequately reflect the value of your content.

Effective pricing strategies are all about finding a balance that reflects the value provided while remaining accessible to the target audience. For instance, tiered pricing models can cater to different segments of users, offering basic access at lower costs and premium features at higher price points. This approach not only accommodates varying customer needs and willingness to pay but also opens pathways for upselling and cross-selling, thereby driving growth.

It’s important to regularly reassess and make adjustment to your pricing based on customer feedback, market trends, and operational costs.

There are two types of membership pricing that we recommend: value-based pricing, and competitor-based pricing. Here’s how to figure out your best price with each one.

Value-based Pricing

Your membership program is more than just a product, it’s an experience. Value-based pricing considers more than the labor, production, and additional costs like hosting and marketing. It’s based on the perceived value that members believe the program brings them, and that’s why it’s great for maximizing profits.

To achieve value-based pricing, look at who you’re building your membership for, and what they’re willing to pay. For example, a pro-makeup artist may be willing to pay $50 per month for makeup tutorials, whereas a hobbyist may draw the line at $15 per month.

To understand what your audience is willing to pay, use the Van Westendorp’s price sensitivity meter. Use tools like Outgrow to survey existing members (or your followers on social media) with the following questions:

• At what price would the product be so cheap that you would question its quality?
• At what price would you start to think the product is expensive?
• At what price would you consider the product a bargain?
• At what price would you think the product is expensive but still acceptable?

You can then plot the responses in percentages on a graph to find your range of acceptable prices.

Note:  We created a handy survey form for you. Just make a copy, tweak it if you need to, and send the survey to your subscribers.

Competitor-Based Pricing

If your audience is too small to run a meaningful survey, competitor-based pricing is a good place to start. The competitor-based membership pricing strategy takes into account what your competitors are doing and how they’re pricing their memberships. 

Make a list of successful competitors and membership services within your niche. Some ways to find these competitors:

• Ask your members who they were considering or subscribed to before you.
• Search Google and online communities like Quora using keywords like ‘best [your niche] classes’ or ‘best [your niche] videos’.

Once you’ve found your best competitors, check out their pricing pages and reviews to see:

• What features they are offering 
• How many pricing packages they have
• What customers say about their pricing
• If they offer free trials or freemium options?

These answers will help you get the full picture when checking out competitors’ pricing. For example, if a competitor charges $9.99 per month for their yoga classes, but they don’t offer the integrated community that you have, your program should cost more to reflect that added value.

To aid in your decision-making process, check out our Membership Pricing Calculator at the top of the page. This tool will help you understand the financial implications of different pricing models based on your unique audience and content type. By inputting estimated numbers of subscribers, content types, and your annual revenue target, the calculator provides an insightful projection of what you should be charging your members.

The 4 membership pricing models are:

1. Flat-rate, Fixed Price
2. Tiered Pricing
3. Pay-Per-View (PPV)
4. One-time Fee, or Donation Based

Let’s take a deep dive into the four predominant membership pricing models, unraveling their structures, benefits, and best practices for implementation.

1. Flat-Rate, Fixed Price Model

The flat-rate model is the simplest and most straightforward pricing strategy. It involves charging a single, fixed fee for access to all membership content and benefits. This model is similar to SVOD and is ideal for creators who offer a consistent stream of content or services and wish to maintain simplicity in their pricing structure.

Advantages

• Easy for both creators and members to understand.
• Ensures a steady, predictable income stream.
• Attracts a wide range of audiences due to its straightforward nature.

Best Practices

Set a price that reflects the value of your content while remaining affordable for your target audience. Regularly update and add value to your content to justify the ongoing cost to members, or even promote upsells and one-off purchases. Communicate the benefits clearly to potential members to justify the price point.

2. Tiered Pricing

The tiered model segments membership into different levels, each with its own price and set of benefits. This approach is highly effective for creators who offer a diverse range of content and services and wish to cater to different audience segments.

Advantages

• Offers options to suit various budget and interest levels.
• Encourages members to upgrade for more benefits.
• Allows creators to tailor their offerings to different member needs.

Best Practices

Clearly define the benefits and differences between each tier to ensure potential members aren’t disappointed to find their choice doesn’t include the perks they expected. It’s also important to ensure that higher-priced tiers offer substantial value to justify the cost. We recommend regularly reviewing and adjust tiers based on member feedback and engagement.

3. Pay-Per-View Model

In the pay-per-view model, members pay for individual pieces of content rather than a blanket subscription. This model suits creators who produce high-value, specialized content or occasional premium content that is not part of the regular offerings. While typical memberships are based on recurring fees, you can always upsell exclusive content on a PPV or donation basis.

Advantages

• Members only pay for what they want to consume.
• Can generate higher revenue per piece of content.
• Allows for focused marketing efforts on specific high-value content.

Best Practices

Ensure the content offered is of exceptional quality and justifies the individual pricing. Use this model in conjunction with other models for a balanced revenue stream. Promote high-value content strategically to maximize sales.

4. One-Time Fee, or Donation-Based Model

The donation-based model, also known as participatory pricing, is a flexible approach where members are encouraged to pay what they can or want. This model is often employed by creators who have a strong community connection and rely on the goodwill and support of their audience.

Advantages

• Strengthens the bond between creators and members.
• Allows wider access to content, regardless of financial status.
• Members feel directly involved in supporting the creator.

Best Practices

Communicate the importance of donations in sustaining the content or service and offer suggested donation amounts to guide members. Be sure to acknowledge and appreciate contributors to encourage continued support.

Bonus Option: Memberships & Once-Off Purchases

The fixed price and tiered membership models are great for reliable, recurring revenue. But, as we mentioned above, you can up-sell or side-sell individual videos, bundles, or collections.

This model could be a no-brainer if you want to offer your audience access to pieces of your content without the upfront commitment of a membership. It’s also a great way to let non-members test drive your content, allowing you to then upsell them to a membership plan if they enjoy it.

How You Can Do It

You’ll have to use the calculator on the top of this page to figure out the pricing for your recurring membership fee, and then decide how to price your individual videos, bundles, or collections. We’ve put together the following example to help you visualize how this would work. 

Tiered Membership

• Basic ($20 per month): gives limited access to content & perks.
• Pro ($35 per month): gives full access to content & perks. 

Once-Off Purchases

• Individual Video ($49 once-off)
• Collection of Videos ($199 once-off)

Here’s an example of what this looks like, from FaderPro.

In addition to a recurring membership, FaderPro also offers content that’s available as a one-time purchase.

For some niches, this is the pricing sweet spot, where new customers can choose the pricing and commitment level that works for them, and your membership site avoids missing out on any potential revenue.

Once you’ve settled on the perfect pricing strategy for your membership, use these tips to make your prices appeal to users — and boost your membership signups.

Let’s go over some tips on getting the most from your Membership:

Offer free trials: Our data shows that free trials convert at a rate of 65%, so include a free trial of 7 days or 14 days for your potential members to get a feel for your membership service. You can also offer a couple of free benefits like training materials and resources. 

Keep your pricing simple: Offer only a small amount of pricing options that are easy to understand. Also, make sure to clearly outline all of the features and benefits. 

Consider showcase offerings: Use a showcase offering in which you highlight the most expensive or best package you have, in hopes that people will settle for the middle package.

Use charm pricing: Even though there’s just a 1 cent difference, $19.99 seems much smaller than $20. Charm pricing makes it seem like you’re selling at a lower price than you are.

Limit the number of choices: The Paradox of choice explains that when we’re faced with too many options, it becomes overwhelming to pick. Stick to a simple pricing offering — like annual and monthly, for example — to make it easier for people to convert. You can offer upsells when they checkout. 

New member promotions: Create new member promotions where you’ll include a benefit or exclusive perks to members that join within a certain time frame. 

Trust the data instead of your gut: Do some research, look at your competitors, and talk to your best customers to find out the best way to price your membership. 

Pay attention to revenue drivers: Pay extra attention to your membership pricing as you look at platform improvements and features to add since you could be missing out on potential revenue. 

You can also mix and match these tips and pricing strategies to create one that fits your membership like a glove. 

Your membership pricing should be a focal point of your strategy to make sure you’re bringing the biggest value to both your current and potential customers.