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Membership Sites: Profitable Pricing for Your Membership

June 19, By Connie Ragen Green Leave a Comment

Membership Sites - Profitable PricingMembership Sites: Profitable Pricing

You may be thinking about starting a membership site for your niche or topic. It’s a wonderful business model, as I can tell you from my experiences over the years. When it comes to membership sites, profitable pricing is the key to great success, both financially and professionally. Let’s explore how this will work well and be effective for you and your business.

Perfectly Profitable Pricing: How To Nail Down Your Monthly Fee Structure

The next component of setting up your membership site is to do your Metrics Calculation. This is where you crunch a few numbers in order to figure out how much you’ll charge your members in order to make your desired income.

First, we’ll start by looking at different pricing models to see what sort of content your members might expect at each price point. Then we’ll do a few calculations to help you arrive at the most suitable price point for your particular site.

Let’s jump in…

Membership Sites: Profitable Pricing Options and Expectations

There are a number of monthly pricing models from which you can choose. Some of the most common include:

• $9.97 per month
• $19.97 per month
• $47 per month
• $97 per month

Before you pick a price, you need to consider what type of content and value you’ll be offering. Obviously, someone who’s paying $97 per month is going to have a much higher expectation regarding the quality (and possibly quantity too) of content versus someone who’s paying $19.97 per month.

Let me give you a general idea of what your users may expect at these different price points:

1. The $9.97 Per Month Price Point. This is a relatively low amount for a membership site, so your customers might expect something as simple as one new report per month.

2. The $19.97 Per Month Price Point. This is another common price for a membership site. Your customers might expect one of the following:

• A new eBook.
• A set of four (weekly) lessons.
• Access to a support group.

Or something else that’s easily worth $19.97 per month.

3. The $47 Per Month Price Point. At this price point, your customers are going to expect a little more. For example, they might expect one of the following:

• An in-depth guide or course.
• Two shorter eBooks.
• A combination of training and access to a group.
• Access to software.

4. The $97 Per Month Price Point. Your customer’s expectations are going to be even higher at this price point. You may offer one of the following:

• Access to a high-end piece of software (the type a business might use).
• Coaching.
• Advanced, in-depth training.
• A done-for-you service.
• A combination of high-end content, coaching, and/or access to a support group.

…or something similar.

Figure out what you intend to offer, and then do your pricing research to determine how much people charge for something similar in your niche. Your goal is to give people a lot of value to keep them satisfied.

For example, if you see others charge $30 per month or so for about the same value as your site, you may overdeliver and charge $19.97 per month. (Which is my recommended price point for a good number of “typical” membership sites.)

Profit Calculations

The next thing you need to do is run the numbers in order to figure out how many members you need at $X per month in order to hit a goal of $100,000 per year.

Now, in order to calculate this correctly, you need to figure out your expenses. These expenses include:

• The cost to create content (if you’re outsourcing).

• Web hosting.

• Autoresponder.

• Marketing expenses.

• Customer support.

• Any other expenses, such as purchasing membership scripts, outsourcing something not mentioned here, etc.

Generally, your webhosting and autoresponder costs are pretty minimal, ranging from about $30 to $60 per month on average (more if you build a really large list).

Your customer support depends on if you’ve hired any independent contractors. If you’re just getting started, you may be able to field inquiries yourself or hire someone on a very limited basis (e.g., maybe a couple hundred dollars per month to get started).

Marketing expenses depend on whether you’re using paid advertising, such as Facebook Ads, pay per click (Google) or other ads. This varies widely depending on the platform, your niche and how many ads you place. You could spend anywhere from thousands per month to as little as $25. As such, you’ll need to fill in this number yourself based on your needs.

Note: If you already have an existing customer base from other existing products and services, then you may not need an advertising budget to begin with as you will seek to convince your subscribers and customers to join your membership site.

That leaves content creation, which is likely to be your biggest expense if you don’t create it yourself. This too will vary, depending on how much content you need and how much your freelance writer charges.

For example, if you need just one report or eBook per month, you might spend anywhere from a few hundred dollars to a thousand or more (depending on the length, topic and the freelancer’s rates).

Let’s suppose you spend $1500 per month outsourcing content. That means your content creation costs are about $18,000 per year. Let’s add another couple thousand dollars for the other expenses mentioned above.

For this example, your grand total is $20,000 for expenses. That means you need to make $120,000 annually in order to clear $100,000 in profit per year.

Now you need to do your calculations to determine how many members you need to clear $100,000 based on how much you’re charging per month.

My recommendation?

Charge $19.97 per month and aim for 500 members, which will give you the six-figure income you’re looking for. (That works out to just about $120,000 per year – $20,000 in expenses = $100,000 net revenue).

EXAMPLE: Jimmy D Brown’s popular and effective Content Creation U membership (I’ve been a member since Jimmy opened it) is regularly priced at $19.97 per month with a “3 for 1” special offer where he “matches” your monthly fees with extra exclusive bonuses throughout the year and then matches it again after you “graduate” in 12 months with a massive bonus.

Your Turn to Choose your Membership Sites: Profitable Pricing Numbers and Terms

Now it’s time for you to crunch your own numbers. For this exercise, we’ll assume you want to make $100,000 per year (net) on the frontend (FE) of your business (for now, we’re not going to calculate backend (BE) revenue). Answer these questions:

• How much are your autoresponder and web hosting fees?

• How much do you expect to pay for content creation?

• How much do you expect to pay for customer support?

• How much do you expect to pay for marketing expenses?

• How much do you expect to pay for all other expenses?

• What is the grand total of these expenses per year?

• How much will you charge per month?

• How many members do you need to get in order to arrive at a six-figure net income? (E.G., Your membership fees – expenses = $100,000 yearly.)

Go ahead and crunch those numbers, and then reach out to me if you’d like some constructive feedback.

I Use and Recommend Wishlist for All of My Membership Sites. I Have Wishlist on More Than 40 of My Membership Sites and It’s Fantastic in Every Way!

I’m bestselling USA Today and Wall Street Journal author, publisher, and entrepreneur Connie Ragen Green and would love to connect with you. If you are new to the world of online entrepreneurship please check out my comprehensive training on how to set up Funnels That Click and learn how to gain an unfair advantage when it comes to building a lucrative online business.

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Connie Ragen Green helps new entrepreneurs build their business with online marketing and technology. She is an expert in article marketing and affiliate marketing and has written several books on these topics. DISCLOSURE - Many articles will contain affiliate links for recommended products or services. These are personally used and reviewed by Connie and she'll receive commission for any resulting sales.

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