Is Your Membership Pricing Affecting Your Retention Rate?

Your pricing has a lot to do with your members deciding to stick with your membership site or leaving.  Price yourself too low and you won’t make any money.  Price yourself too high and you won’t get anyone to join your site and even your current members will leave.  But, how do you know what the right price is?  Here’s how to figure that out.

The right price is the one that delivers the most value to BOTH you and the new member.

And the cheapest price isn’t necessarily the best.  When you price yourself too low, people don’t respect you. They think your information isn’t worth it.

For most membership websites aimed at consumers, a price between $10 to $30 works well.  Usually, you see this represented as $9.95 per month, going up to $29.95 per month (a nickel underneath the psychological threshold of $10 and $30, respectively).

For membership websites aimed at the business market, $30 to $50 is the general rule.  And I’ve seen some “coaching” sites go up to $100 per month (usually sold at the $97 psychological threshold).

I put “coaching” in quotes because there’s been a crop of these sites being pushed by the Internet “gurus”.  Luring people in with false claims and delivering very little value, with an extremely high cancellation rate from dissatisfied customers.

I wouldn’t recommend pricing your membership site over $50 per month (business or consumer). It’s really a lot of money for people to fork over to “another bill” and they’ll have to justify the cost, making it much harder for you to convince them to buy.

The one exception I would make to this rule is if your site deals with the stock market or financial matters.  Then, the price because one of the main selling points.  The more expensive you are, the more valuable your information must be!  Expect mass cancellations, however, if you can’t deliver on your claims.  Stock market or not!

For pricing under $10 per month, you have a very good chance of people joining your site then “forgetting” about their membership (which is good for you, as it means more renewals and a steady monthly income). People won’t complain about that, as many intend to use the site anyway eventually.  They just haven’t gotten around to it yet.  Under 10 bucks a month isn’t a big deal to most people if they still see the value in sticking around as a member and it helps get them closer to their dreams.

When you start pricing yourself in the $20 to $30 range or above, that’s when the clock-watching starts.  Your members know the date they signed-up to join and know when their membership is coming up for renewal.  They won’t forget.

Unless you deliver REAL value, expect cancellations the day before renewal or even the day of renewal.  It happens no matter how good your site is.  Some people are just damn cheap!

If you find a high percentage of your new members doing this, you may want to consider offering a yearly membership price.  People are willing to pay for your site, but they just don’t want another “bill” to deal with every month.  This is very common for business memberships, as a monthly bill is just another thing they have to manage.  Companies want to invoice it once and be done with it.

To stop cancellation, you could offer a discounted yearly rate at the time of first joining and give your members 3 to 6 months free membership if they decide to pay it all upfront.  Or, during the cancellation process, make the same offer.  You’d be surprised how many members you could save by simply giving them another choice.

I don’t recommend cutting your monthly rate when members try to cancel (in an effort to keep them on board).  For example, if your monthly membership is $30 and the member tries to cancel…you offer a discounted monthly membership of $20 if they decide to stay.  This NEVER works.

Sure, you might get a few members to stay, but they’ll likely cancel anyway after another month or so.  They become clock-watchers again.

It also makes you look cheap and desperate.  Don’t do it!  Respect yourself and what you have to offer.  Your information has value and, if you price yourself fairly from the beginning, people will respect you.

The best way to approach your membership rate is to think as if you were in your members shoes.

  • Is this site worth paying for?
  • Am I getting X amount of value or more per month to justify this expense?
  • Did I make more than X amount this month because of the help or information I received from the site?
  • Did the site pay for itself?
  • Can I expect the same level and high quality of information next month?
  • Is the site a financial burden?
  • Am I happy as a member?

Answer these questions and you’ll know whether your membership price is too high.  Only then will your retention rate improve.

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3 Comments on "Is Your Membership Pricing Affecting Your Retention Rate?"

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I think $30 a month is probably the tops for most people. Anything more and it becomes a bill.


I can’t imagine any boss wanting to spend more than they have to. $100 a month is probably a ripoff for most companies when you have to factor in all of the other expenses one has to pay. If the owner pays for it then that’s another thing. But an employee having to ask the company to shell out for a membership has a much harder time.