The membership business model is now among the leading solutions for corporates. This is because it guarantees your business a constant income even when business is generally low. There are various elements, however, that you need to consider to ensure that the membership model works for your organisation.
The marketing, management, and pricing of your business model are some of the crucial ones to determine the profits you can reap. These are not elements an in-house team might efficiently handle regardless of your company’s size and available resources, though.
A membership data management company in the UK, for instance, might be the only one with efficient software and tools for the handling of your members’ data. This will determine various aspects of your membership management, including your pricing model.
Before you start celebrating over the number of members, whom will be paying you a recurring fee for your products and services, you should ensure that you set a price that matches the value you of what your members would expect. The following are some pricing models that might suffice for your membership model:
Fixed Term Pricing
Here, you will have a specified term for the expiration of your member’s subscription. Your members will need to pay a set fee to renew their membership. Fixed term pricing is generally used for traditional organisations, associations, and benefactor groups that report their membership annually and require the renewal of membership.
Discounts for those who renew their memberships early or purchase multi-year memberships and pro-rate memberships (for those who will sign up mid-term) can maximise their benefits in a fixed term pricing model.
Recurring Subscriptions with Fixed Period Pricing
In this model, you will charge an upfront fee and a monthly or annual fee that might change for the life of a membership. The recurring subscription works best for listing sites that deliver expert advice and newspapers or magazines. The primary caveat in this model is to continue offering value for every term so that members will renew their membership.
Here, you will charge a high upfront fee for your membership and low prices for each specified term in your membership. This is the best pricing model if the value of your service or model is delivered within the first few weeks members sign up. These include fitness clubs aiming for weight loss or software companies with a ‘get started’ rate and periodic maintenance rate.
Though this is a stand-alone pricing model, it can also be added to all pricing models. Here, you will have a reduced rate for a ‘lifetime’ of accessing your products and services. This model works if you can deliver the same quality of products and services for an extended period. The term ‘lifetime’ for this pricing model is a misnomer since there is a cap on the membership, but the period is long-term.
The pricing of your membership determines your revenue and how many customers you will get to sign up. The above pricing models are designed to ensure that you get the most out of your membership model. Get an expert to assess your business and guide you on a pricing model that works best.