How Many Membership Options Should You Offer?
I visited a membership site tonight that had 7 membership options. Monthly, Quarterly, Semi-Annual, Annual…and then options to sign up for a forum, a more personal mentoring program and finally a watered-down version of the full membership site designed for beginners. A veritable buffet of membership goodness.
At first thought, having more membership options seems like the right thing to do. You want to offer a membership choice that’s right for everyone who visits your site. Someone may not want to pay a monthly fee. Perhaps a quarterly fee will be more attractive to them. For others, the semi-annual fee is lower than an annual choice and therefore a better value. Then again, if you offer an annual choice, you’ll collect more money up front and your member is calmed by the fact they won’t have to worry about a re-bill for 365 days. But maybe you should offer a “beginner” membership that offers a low price yet limited access to the content.
You could go crazy just thinking about it. And that’s exactly what your prospective members will do when they are faced with more choices than they had at Hometown Buffet for dinner last night.
By offering too many choices, your prospect does the one thing all membership site owners fear – they wait. They promise themselves they’ll come back to the site when they have time to research your choices thoroughly and make an informed decision.
That day will never come. Tonight turns into tomorrow, tomorrow turns into next week, and before you know it they’ll remember some day about a great membership site they were looking at last month and “what was that URL….” Oh well, back to Google.
If you’re talking straight conversion numbers, you’ll find that having a single membership choice, usually monthly, will result in the highest number of conversions per visit to the sign up page. One choice means the only decision they have to make is whether your content is worthy of their dollars and their time. When we offered one monthly membership choice our conversions were higher than anything else we tested.
Revenue, however, is another issue. We found the highest revenue was generated when we offered 3 choices – monthly, annual, and lifetime. And that’s where we’ve been since our early tests. The lower conversion numbers were offset by the higher margins of a Lifetime Membership.
You may be thinking that a monthly membership, long-term, would outpace the Lifetime Memberships because over time you’d build up a larger base of people paying a monthly fee which would snowball into more and more dollars each month. But the truth is that attrition and average stick-rate of monthly memberships just didn’t add up to the revenue we generated with the three choices listed above.
Granted, we didn’t test it over years, but over 6 months we found that we maximized the value of each membership by offering longer-term memberships at higher prices (discounted from what it would cost if paid monthly, of course).
The Interview Income blog is written by Tim Bourquin and Emile Bourquin, brothers and owners of Ideas For Download. The Interview Income Blog is your front row seat to see what we've done that worked and failed in selling content online. Thankfully, we've been pretty successful but we promise to always show you the reality of building an online business.
