Badass Is The New Black (Season 3) Episode #29 3 Things To Consider When Pricing Your Membership SiteJul 27, 2021
Pricing your membership for your website is always a tricky task. Something so simple can make or break your business. Join your host Krissy Chin as she discusses the three things you need to consider when pricing your membership site. Remember, you're not pricing a course; you're pricing a membership site, something that people want to be a part of. Learn all you need to know today.
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3 Things To Consider When Pricing Your Membership Site
In this episode, we are going to talk about the three things to consider when pricing your membership. There are many reasons why you are starting your membership and the price should be something that you consider so that it is successful. The last thing that I want is for no one to join your membership because it's priced too high or people are canceling after one month, then you don't have a membership and you have more of a course where they are giving you one payment. That's not why you started a membership. You started a membership because you want that reoccurring revenue. Grab a notepad, get ready to take some notes and we will dive in.
As I go through these different things to consider when pricing your membership, I will use GROworkspace, which is one of my businesses, as an example to talk you through some of these different ideas and concepts. I will throw on some other examples to help give you a very clear understanding so you can apply them to your business. GROworkspace, if you are new, was the first membership site that I launched. It was geared towards brand new brand partners with Young Living so super-niche audience. We had 4,000 paying members after four months. These three things I'm going to talk about were the things that I considered when setting the price for that membership and things that I still consider as we have launched other membership plans.
Know Your Customer’s Journey
The first thing to consider when pricing your membership is where your ideal client is in their journey. I have talked about this in a previous episode when I talk about three things to consider when pricing your course. It's important to know where your ideal client is in their journey so that you can set the price accordingly. Sometimes, in the beginning, stages, people are less willing to invest. This is not steadfast always but beginners sometimes lack confidence. They aren't sure if they can generate the results. Maybe they lack the finances to be able to invest so they can be a little bit shyer about spending money.
When I started my entrepreneurial journey, I was trying to cut all the corners. I didn't hire anyone to help me because I didn't have a lot of money to invest in my business. I had to think outside the box and figure out trades and things like that. With GROworkspace, we now offer two memberships. One is at a lower price point for new brand partners to help them get their feet wet and give them some awesome wins with our pre-made content. The other membership, which is about double the price, offers more advanced content like pre-made funnels. The pricing here is reflective as to where they are in their journey. Beginners get less content and they pay less money. More advanced get more content and they pay more money.
The second thing to think about when pricing your membership is, do you have any competitors in your industry? Having competitors can help you determine the price of your membership, whether you go lower or higher. You could offer a competitive price where you are priced around the same as your competitor or you could offer a little bit more or a little bit less. You could certainly use competitors' prices to position yourself as a more prestigious option by charging more or you could market it as taking everything that you have, giving them more and giving it to a fraction at the cost. Companies do this all the time. I was at Toyota getting my oil changed and they come out and tell you all the other things that you need because they are upselling. He says, “You need new tires. Do you want me to price that out for you?” “Go price that out.” He comes back, gives me the quote and I'm like, “I talked to my husband.” A guy approaches me from the waiting room who overheard this conversation. He says, “I think you would get a much better price at discount tire.” I saw him while I was pulling the numbers.
Lo and behold, I called discount tire. They say, “We do competitive pricing. I’m happy to match the price or maybe we are even lower.” They were half the price, which was awesome. Some companies do this all the time. They match their competitor's prices. I'm pretty sure that Best Buy does this as well. If you see the same TV someplace else and you show them that price, they will match their competitor's price. When it comes to your course, if you price yourself the same as your competitor, they won't go to the other person because that person has a lower price. Sometimes, that's how we make our buying decisions or you could offer a little less so that you are the lower price point and the driving factor for people to come to you instead of your competitor. This could be a strategy to drive more traffic to your membership than to someone else's membership.
A membership that people only pay once for is not a membership. It's a course.
Let's say you offer yoga as a part of your membership. Who are you competing with? You could argue that you are competing with a yoga studio but I would say that that's a different clientele online versus in studio. You are competing more with online yoga classes. However, if a yoga studio were providing online classes, there would be a little bit of competition there. Let's look at your competitors in the online space and look to see if you have a competitive price. What were you thinking of pricing it? Look at your competition. Is it competitive? You can be more specific about who you are trying to attract as well. If you are trying to cater to the stay-at-home mom with expendable income, then maybe your offering is priced a little bit higher as they are used to spending more money to get exactly what they want. If your ideal client is a busy working mom that's on a budget, your price is a little bit lower and you go for the masses on your membership.
You could also set prices based on your personal offerings and what your personal offerings are. You offer private yoga sessions for $60. You offer group sessions. They are obviously going to be less, maybe $20 for a live in-person class. That's competitive with other studios. You offer $10 a class for live virtual classes where you could provide some feedback or queue to what you are saying if they have their video on. You could pay $30 for a month membership, which is $5 a class to get six prerecorded classes a month to do on their own time. As you can see, you start with your one offering private. That's going to be the highest then group in person, that's going to be the next tier down, then online, being able to see an interacting queue a little bit less versus having videos that they play on their own. You are using your other services to help price out your other offerings or your membership. Get more, pay more. More being in this scenario, the personalized support versus necessarily content even though if you go from one private session to six pre-recorded sessions that's more volume in the amount of content in classes.
Let's say that there's no competition or a little competition and you get to set the tone for your market. At the time we launched GROworkspace, there wasn't anyone offering pre-made content for Young Living brand partners. Maybe a few here and there but nothing worth writing home about. Now, some people are trying to do what we do but they are only offering a portion of what we do because literally, no one can duplicate what we do because we offer so much for so little. These people are offering a portion and they are pricing themselves higher than what we charge and giving away less. Outside of the loyal customers that we have, we find people still come to us for our pre-made content because we are the best price for the amount, diversity and content that they get.
Consider The Masses Of The People
The third thing to consider, is does your membership works better if there are more members or fewer members? Think about this concept, you can make $10,000 a month with 1,000 people paying $10, very low price point, more people or you could make $10,000 a month, same profit, with 100 people paying $100. We are going to talk about this concept. Would it be better for your membership to have more people or fewer people? Think about the service that you provide or the customer itself and what they will thrive off of. Big or small community? In my community, I have a copywriter and they have to review a lot of copy. It's going to need to be a smaller membership count because there's more one-on-one support reviewing copy, so the price needs to be higher to compensate for that.
If you don't need to limit the number of people in your membership because your service can be available to the masses and scaled without sucking up all of your time like the GROworkspace membership, it’s made up of network marketers. We can have the masses of people in there. Thinking about this concept, “Is it better to have fewer people, more people or the type of customer it is?” With GROworkspace network marketing industry, it's their job to talk and share about the things that they love to build their business. Community is a huge draw to them and they are trying to build a community of their own. They also want to be a part of the community. The more, the merrier, they want a big community. We are going for the more, the merrier, let's go for the low-cost high volume of people. We launched the membership at $4.95 a month. It’s so cheap. A ton of content for the price of inexpensive coffee, which got everybody talking. Drove more members to our membership and it didn't matter if thousands of people were using our content. They could modify it and make it their own.
Another reason you may want to price higher to have less joining you is that in your industry or what you offer is better if you don't have the masses able to access your content. My husband and I toyed with the idea of starting an Airbnb business and we bought a course that was going to help us get started. He has a membership course for his alumni, I'm not in it because we didn't follow through on that business but the course was $2,000. It wasn't cheap by any means. I remember him saying that one of the reasons he priced his course this high was because he didn't want 10,000 people purchasing it. It's better for those who are building this Airbnb business to have fewer people access to these secrets of building a business than more people. He priced it higher to have fewer people accessing the content but be able to get the benefits of sharing this knowledge and these secrets to help other people be successful.
Thinking about that higher price point or you can have it at a lower price point and you could close the door if you are like, “My people will not pay a big price point. They will only pay so much amount of money to get the result that I'm offering here in this membership like yoga.” People aren't going to pay you $1,000 a month to access your yoga videos. They are not going to do that. They are definitely going to go to someone else. If you are providing all this one-on-one service, you can't have 1,000 people in there. You could close the door but that's not how you would scale a membership site. I want you to generate seven figures with your membership site. You are here to learn how to scale and make more money. Does your membership thrive off of that large community and figuring out a way if you have to have a low price point? How can you serve the masses? How can you modify your community to be able to serve the masses? Maybe that's hiring more support to help you or not offering one-on-one care.
I have seen a podcasting community where you can get exclusive access to the special community for collaboration. This is going to be much more desirable for someone if there are 10,000 people versus 10 people in there because it's all about collaboration and exposure. Therefore, it would make sense for it to be priced lower at $10 or $15 a month versus $100 a month, which would decrease the number of people joining but they want the masses. That model of going for $10,000 a month, lower price point, more people would work better in that scenario.
Hire more support to serve the masses.
I hope this is all making sense to you. I hope it's getting your wheels turning about your membership. I hope that you are now thinking about your membership and asking yourself these questions, “Would it work better with fewer people or more people? Where are they at in their journey? What are the spending habits of my person?” We covered these three things. Number one was, where's your customer in their journey? Two, do I have any competitors in your industry? Using that to try and help you figure out a starting point for your pricing and considering everything else. Does your membership work better if there are more members or fewer? Once you decide that, you can also determine what you are offering in your membership to make sure that you are able to present it in a way that you want.
There are some other things to consider other than these three things but this is going to get you started. It's going to get you off in the right direction. If you are looking for ongoing support to scale your membership, you can certainly join the waitlist for my coaching membership where you get more exclusive access to me. I offer monthly training, Q&A calls to help you with course and membership to scale to multi 6 and 7 figures, which include a community to collaborate with and learn from. If you are reading and as I teach, it's creating more questions and you are thinking, “I wish I could ask Krissy this question or tell her this scenario.” You can go to, TheKrissyChin.com/membership, hop on that waitlist so you get the first email to let you know when the doors are open. They don't stay open for very long. You will be in the know for that.
If you are getting started in this space, you can download my free guide to turn your knowledge into a profit. It's a worksheet and a guide to help you figure out how you can take that knowledge in your head, turn it into passive income, whether it's a course or a membership site and help you start generating $1,000 a month of passive income with less than 30 minutes a day. Go to TheKrissyChin.com/profit to grab that guide. If you found this information helpful, please let me know in the comments on YouTube or shoot me a DM over on Instagram, @TheKrissyChin. I love to know that you are reading and of course, hit that subscribe button so you are notified when the next episode is. I appreciate you so much for tuning in and I will see you on the show.