Jul 6, 2021 · 8 min read
How to Price Your Membership Program: Costs, Purpose & Pricing Models
The #1 question I receive is, “Hae, how should I price my membership?” – whether it’s a membership, a course, or even a high-ticket program, prices are always the most asked question.
While many people say that “pricing doesn’t matter,” I want to say that creating the right package that fits the purpose and people of the membership is incredibly important. So we’re going to focus on the two specific reasons, as well as identifying the costs of you running your membership so that you’re not accidentally negatively profiting.
Additionally, we’ll cover the different pricing models of a membership so that you can identify what model best fits your program.
Identify Your Costs
To begin, you want to identify the exact costs of your membership. For example, our clients spend anywhere from $20,000 to $30,000 for us to build their membership platform, automated funnel, website, and work on their organic marketing. However, in most cases, our clients already have a running membership and are upgrading the digital experience of their customers.
For starters, here’s the usual tech stack that I use and recommend.
WordPress Hosting ($30/mo)
I recommend WordPress because the flexibility and possibilities are endless. For example, one of our clients wanted to add an interactive member directory inside the custom membership that we built. In just two weeks, we were able to design & develop the entire member directory and launch it to her members.
Additionally, you can create your funnel, a blog to use to market your membership, and so much more directly within the membership site.
We use Kinsta hosting in our agency because they have the best features/support we’ve ever used for both our website and our clients’ websites. However, there are more inexpensive options such as Bluehost, which is the hosting I used when I created my first WordPress website.
With a WordPress website, we recommend using MemberPress for your membership features. This will help you set up features such as logging in, account management, subscriptions, payments, etc.
We use MemberPress because of two specific reasons.
- It’s incredibly easy to use both for us and our clients
- It’s flexible and has integrations that don’t exist in all-in-one software
Beaver Builder + Themer ($246/yr)
This, however, is not required as there are themes that you can use + install to create your membership website. We use these plugins because this gives us incredible flexibility and freedom to be creative with our layouts.
If you offer regular calls inside your membership, you will want to invest in Zoom so that you can hold meetings with groups and record them.
Inside our agency, we always use Google Meet for our team meetings because we’re already paying for Google Workspace. With an add-on like tl;dv, we record our calls and keep meeting notes.
Additionally, if you want to take a simple route that offers this in one platform, I heavily recommend Thinkific. It is completely free to start, but you will have to upgrade for membership features.
However, the reason why this is not my #1 recommendation is that it is not as flexible as building your own platform.
What is the Purpose of the Membership?
Memberships are diverse in not only pricing but the format and purpose. In this section, we’ll cover the three types of membership formats that you can consider.
Community + Content by Content Creators
Community memberships are what you usually see YouTubers do with YouTube memberships or Patreon. The purpose of these memberships is not for educational gain, but more for being more connected to these content creators, influencers, or public figures.
The purpose of joining is to support these creators and even get access to some exclusive content. However, the membership is not driven by solving a problem for the audience, but for sole entertainment.
We have never created these types of memberships in our agency, so I can’t tell you about retention rates and other important metrics in a membership. However, if I had the chance, I would change their community-style memberships to a more legitimate program that helps their audience instead of just relying on their popularity.
These types of memberships are usually less than $10/mo.
Membership with a Niche + Community
You can have a membership that focuses on a specific niche or topic. For example, there can be a membership about health & wellness, entrepreneurship, writing, fitness, etc.
While these can be created by larger content creators, others who have a smaller audience can create these as well. Because it’s usually not focused on the creator of the membership but the topic, you can attract people who want to be connected to a community for your specific niche.
However, you shouldn’t just have a community but also have content that helps your members. With these types of memberships, I like to recommend that you have a foundational framework or content that all your members go through, and identify different categories that they would be interested in.
These types of membership programs are around $10/mo to $100/mo.
Membership With a Specific Solution
If you have a specific solution to a problem your audience is facing, you would be a great fit for running a membership that provides a solution. This doesn’t have to be a low-ticket membership. It can be a course with limited access, a high-ticket coaching program, and more.
With this type of membership, you’re more likely to create a curriculum for your members to follow. There would be support calls every month to guide your members through the curriculum, and there is a clear result attached to the membership.
These types of memberships range anywhere from $100/mo to $1,000/mo and the member cycle is around 3-12 months.
Membership Pricing Models
The first model we’ll cover is the flat pricing model. This is your regular $50/mo or $500/yr (or even quarterly) pricing options. You don’t leave any variation and all members join at the same price for the same information/access.
This model is incredibly easy to communicate during the buyer journey. The customer isn’t confused at what their options are and instead, they are given a choice of yes or no.
The only difference in this pricing would be that you would charge a little less for your yearly pricing. This is because of a few reasons such as your members committing to a year instead of months where they can cancel during the year, and also because you may have other expenses that are added when members join monthly.
Additionally, your monthly price can be a commitment of any amount of months. Instead of joining for one month and canceling the net, you would clearly communicate that they are staying for a minimum of 3 months each time, but their payments are made monthly instead of quarterly.
With tiered pricing, you are offering multiple versions of your membership with different features. Instead of everyone gets the same thing, you now divide your members into different groups.
For example, you can offer a VIP plan that gets access to more exclusive content, an extra call, personal touch, and more. From experience with different clients, this option serves your members who want to receive more 1:1 or exclusive features inside the membership.
The tricky part here is about balancing the two plans. It’s important that you make your higher-end plan members feel special and supported. But it’s as important for you to keep serving your existing members in the basic plan and making them feel like they’re still a part of the group.
Installment plans are technically not memberships. However, I consider memberships to be courses, membership sites, and coaching programs where one belongs to a program for a specific period of time.
Installment plans can work incredibly well for courses and coaching programs. However, the rule of thumb is to keep the payment plans maximum 1.5 times the amount they are inside the program. For example, if the program is 6 months, your maximum payment plan should be 9 months.
The reason why I recommend this is because no one wants to pay after they have completed the program. It would indirectly cause them to form negative feelings about the program, and that does not help with customer retention in the long-run.
With programs that offer lifetime access (which I personally don’t recommend), your payment plans should be maximum 12 months. More than that and it becomes old news because your members don’t rave about your course all year long. They rave in the beginning and sometimes along, but not year-long, especially when they’re receiving payment receipts each month.
The Big Picture
After sharing this article to our team, one of them asked, “Hae, they’re coming to ask about pricing and you’re giving too much lol” and honestly? I forced myself to stop writing.
Here’s the thing: there is so much more to pricing a membership, course, or coaching program than just coming up with a number and deciding on it. Yes, it’s not bad to do that, but deciding on your feeling leaves so many holes that you’ll have to fill up in the future.
And above all else, remember that you’re doing this for your members and you. Make this custom to your preferences, but also think of what your members will need and want.
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Meet the founder – hae park
Strategist, Designer, Developer & Code-Lover
Hello, my name is Hae and I've been supporting women leaders & founders for the past six years. From professionals and educators to innovators and influencers, I have worked with an incredible & diverse group of women and supported their vision.
I started working at 16 when I built my first membership as a travel photography stock site. Now, I use my experience and strategy to help women build transformational experiences for their mission-driven brands.
I'm excited to get to know you!