This article was originally published on Restrict Content Pro. 

Figuring out what to charge your members can be confusing. Some membership sites seem to have such high prices, yet others are so affordable. It leaves you wondering: What’s the value of my own site anyway?

Membership prices are not one-size-fits-all. There are significant variables that may influence your pricing decisions–everything from your market niche and competitors to your brand image and membership benefits. All of these combined factors give your site a comprehensive value that will determine your prices. 

When you invest the effort into getting it right from the beginning, you can start off on the right foot and leave yourself room to adjust along the way.

In this article, we discuss perspectives to help you understand what you should charge and why.

Know your value

The price you charge is a direct reflection of the value you provide. The extent of your membership benefits (or outcomes) will drive your price higher. Here are some points to think about: 

• What is the ultimate value of the result that your members experience? 
• How are their lives improved by subscribing? 
• What differentiates you from your competitors, otherwise known as your unique selling point? 

You always want to be aware of what your competitors are charging (and what they are delivering for that fee), but ultimately you get to decide what you’re worth. So, instead of competing solely on price, you might decide that your time, effort, knowledge, and expertise are worth a certain monetary value. 

Remember, your prices are an announcement to the world that establishes your level of quality and exclusivity. Are you presenting your site as a premium brand? Or are you aiming to be affordable and widely accessible? Know this first!

Figure out your costs

Although it may seem obvious, the costs of running your membership site influence the price you charge. If you’re putting the time, energy, and cash into your site, you want to be sure that you end up with enough revenue at the end. 

Identifying and keeping track of your costs helps you to more accurately calculate your profit, set your prices accordingly, and avoid mistakes.

Some typical costs to consider include:

• Domain and hosting costs
• Web design and development costs
• Membership platform and plugin costs
• Payment processing fees
• Marketing and advertising costs
• Any hired help for things like social media, support, administration, etc.
• Any other operational costs

You’ll also have to consider costs associated with time. Consider how long it will take to create content and communicate with subscribers. 

Despite all the costs, you can still get started with a membership site on a budget. 

Decide on your revenue goals

In tandem with your membership value and associated costs, the revenue you aim to earn is another pricing factor to think about. 

The amount you charge your members could vary greatly depending on your revenue goals and how many people you expect to sign up. If you’ve generated a lot of buzz around your site and you’re sure that you will have a larger volume of signups, you could confidently charge middle-of-the-road prices. 

If you have a larger revenue goal and you’re expecting fewer initial signups, or if you’re not sure, you may be looking at charging a higher price. Here’s a simple formula to help you:

Revenue = Number of members x Membership fee 

The question then remains: Are your customers willing to pay that price? How do you know?

Research your niche

There are so many factors to consider when calculating your member prices. It’s easy to overlook some of the more obvious things, like researching your niche. 

Thoroughly understanding your competitors, your audience, and your market can arm you with the data you need to make an informed decision.

Here are some questions to get you started:

• What are your competitors charging? 
• How does your membership differ from competitors in terms of value and benefits? 
• What is your audience willing to pay?
• What are the other popular products your audience looks for, and what do they cost?
• What is the end result your audience is looking for, and what is the dollar value of that outcome?
• Is your market niche saturated?
• Are you an authority figure within your niche, who can charge higher prices?

Dive into research by looking at competitor websites and pricing and surveying your audience to see what they’d be willing to pay. 

Choose a pricing model 

There are a few different pricing models to choose from. Each model has its pros and cons, and your decision is ultimately based on your revenue goals. 

Recurring payments

Many membership sites operate with recurring monthly payments. You’ll want to charge a much lower price than one-time fees since subscribers are paying consistently. You can choose a weekly, monthly, or yearly payment plan. 

Most monthly recurring payments are under $100, but that can fluctuate based on your audience, niche, and goals. 

One-time fee 

Membership sites don’t have to have recurring payments. You may opt for a one-time fee. This allows subscribers to pay once and access whatever content you’re offering. 

This pricing model warrants a much higher price than other membership models. One-time fees can reach into the hundreds, or sometimes even thousands. However, that doesn’t necessarily mean you earn more over time.  

Tiered rates and the “anchor offer”

If you decide to offer more than one membership level, or tiered rates, settle on different price points to match. This is where the anchor offer comes in. It drives customer desire by establishing a high-priced, exclusive option (containing the most value). Essentially, it “anchors” customer expectations to higher prices and boosts conversions on your lower-priced options at the same time.

You can offer a few different membership tiers, such as:

• Anchor offer (most value)
• Mid-range offer, sometimes up to 50% of the anchor offer price
• Affordable tier, sometimes up to 20% of the anchor offer price

Be sure to explain what benefits each membership level offers and highlight the potential outcome that people would get if they invest more. 

Freemium pricing

To help start or grow your membership site, consider freemium pricing. People can become members for free, with limited access to your content. Although you’re not getting paid (yet), the freemium model offers a few other benefits:

• Grow your potential subscriber base. More people are likely to sign up if there’s a free option. 
• Upselling and lead generation opportunity. Send out targeted emails to freemium subscribers to encourage paid subscriptions. 
• Establish credibility and build trust. Those who are unfamiliar with you can sign up for a free membership and explore what you have to offer before committing to a paid subscription. 

Find the sweet spot

When pricing your memberships, you’re aiming for the sweet spot – the point at which all of these factors converge. Be sure to carefully assess (or estimate) each variable line by line. The value you have to offer, your costs, revenue goals, competition and market precedents, payment model, and membership tiers will all point you in the right direction.

If you haven’t built a membership site yet, take a look at MemberDash. It’s the most flexible membership plugin for WordPress, with features like flexible memberships, easy content restriction, built-in reporting, and more. Explore the MemberDash demo to get started.