Community Building May 22, 2020

How to set your membership price?

Jas Hothi @jas_hothi

Whether you run/have run a monthly or annual membership service...

What factors do you consider to help you decide the price?

How do you "know" what to set the price at? How do you know when to raise it?

Confession: I'm about to move from 'beta' to 'launch' version of my paid community, so this is something very much on my mind :)

  1. 2

    My approach is to start with the value you create for your members.

    Assuming someone is actively engaged/participating/using the service, what is a reasonable expectation of what they could gain? Can you save them some measurable amount of time or money? (If it's time, what is that time worth in a billable sense?)

    I typically aim to set prices in a range where they could reasonably gain anywhere from 3-10x value by using the resources of the community - including access to the other members. I don't usually say it explicitly in marketing, but that's my target. Another related option is to anchor the price I'm charging to something related they're already spending money on, and are unsatisfied with. Even if I don't change the AMOUNT they spend, it's an opportunity to deliver a better result.

    And if I'm not happy with the number either of these land on, I will find ways to raise the value potential rather than lower the price.

    Obviously that's not a guarantee that they will get that ROI every time or every month, since it depends on them to implement, but this is true of software and books and a many things TBH.

    1. 1

      thank you! I like the way you're thinking about it in terms of 'value' delivered.

  2. 2

    The right price depends on your goal.

    Are you looking to maximize the profit right now? Do you just want to see if people see value in your offering, while keeping it affordable to grow?

    Anyway, you will never know what's the right price until you test it.

    A good rule of thumb is to choose a price that makes at least a bit uncomfortable, because as founders we tend to underprice our products.

    Another suggestion is to say to your users that the price is X right now, but will grow in time. It also fits your product well as the value of a community depends on the number of its members and the content and both will increase with time.

    1. 1

      thank you! some great suggestions -> I especially liked:

      Anyway, you will never know what's the right price until you test it.

      A good rule of thumb is to choose a price that makes at least a bit uncomfortable, because as founders we tend to underprice our products.

  3. 2

    Look at the market and charge what your service is worth.

    1. 1

      thx :)

  4. 2

    Take into consideration your expenses. That will give you an estimate where to start pricing. It can atleast be a break even of monthly/annual expenses.
    e. g. If you have 50 users in beta version and your monthly operating expense is $100 then charge somewhere near $2 per user.
    In future you can adjust your pricing based on number of users, operating cost and profit margin.

    1. 1

      thx :) I've definitely been thinking about this, especially as I'm looking to move to a forum like Discourse. I think I'll be at around breakeven initially.

  5. 2

    Look at your competition. What is their price? That will give you an understanding of the market value. Do you think you have a better product to charge higher than your competitors? Make it very clear to your customers why that is.

    1. 1

      thank you. The challenge here is that my membership community is very niche (for introverts) - I've not found many out there for introverts (just 1 other), so I've been having to look at ones that are still content/community focused around other niches.