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17 Comments

Monthly vs Yearly vs Lifetime

Greetings all,

I'm currently running an online community. I'm planning on making the site paid for access. The reason I want to is to weed out the unmotivated as well as add friction to how many people sign up. I'm wondering what's best for these types of membership sites? Monthly, yearly, or lifetime?

Lifetime is great since they pay and you forget about it. The problem with this is that you'll always need to find new members to keep up with the MRR you want to hit. With a monthly/yearly subscription model, it's much easier to get people to sign up and you get the MRR/ARR, but a user might not be interested at some point in time and there will be churn.

Would be interested in ideas!

  1. 5

    Have an option for all

    $9 a month

    $90 a year

    $150 Lifetime

    1. 1

      That’s a solid idea there! Capture all the market. This could work. This assumes the people who’re paying for lifetime would do so no matter what. It’ll also capture the market that’s simply wanting to try it out.

  2. 3

    I think it's important to give people the choice. I for one don't like monthly as it means I need to ensure each payment is accounted for in my company accounts (I expense it is 'business learning').

    So from that perspective I prefer a yearly membership, perhaps an occasional life time one if I really believe in what was on offer.

    1. 2

      Yes agreed! I was thinking that too, every month I'd need to book keep which takes up so much time. Perhaps I'll do a yearly and lifetime to give people the choice. Thank you :)

  3. 2

    Is your target audience big enough to warrant you users for a lifetime plan? Also, given potential churn, lifetime can perform better. As a user I love one time payments. Even they are higher it's so much easier for me to justify them.

  4. 2

    I don't think lifetime deals weed out the unmotivated at all. On the other hand, if you send out your receipts to your monthly customers and letting them know that you still charge them, that's a stronger push to weed out the unmotivated.

    1. 1

      That's a good point you brought up there. So are you advocating for pure monthly subs?

      1. 1

        I guess weekly would be even better.

  5. 2

    Hey, we've been discussing this a lot lately. We've built https://www.wellybox.com/en and charging $6/month for freelancers and $15/month for INCs

    MRR - best conversion rate (I once talked to a guy marketing @ India - they are charging on a weekly bases) - if churn % is in the single digits - you may learn a lot from people who left how to improve your product.

    ARR - great for cash flow, if you're buying media and break even after 7-8 months or more, charging a monthly a subscription may get you into cash flow issues. Also, the clearance costs a bit less.

    Lifetime - it looks great, especially on product launch (see a post by @DannyPostma) + we already got requests for lifetime plans from our existing customers, so it may also be a good selling point

    1. 1

      Yeah I think lifetime makes sense when you know the LTV fo your subscribers. Still need to think about this. I'll for sure throw out monthly, especially for membership community sites, doesn't make much sense.

  6. 2

    I'm building https://nocode.mba right now, and starting with a lifetime deal and will eventually move to an annual price. I think annual is optimal because it's an infrequent purchase that still gives you some security that people will pay each year (even if some people churn).

    1. 1

      Yeah agreed! It's low enough for people to not completely disregard it. And I also don't think churn will be that bad either.

      1. 1

        Yup exactly. It's easy for people to feel like they're getting value from an annual membership

  7. 1

    I'm surprised nobody has mentioned this yet but one way to do it is to run a Limited Lifetime deal on launch. In other words, only offer the Lifetime deal to the first 100 users and then move on to monthly / yearly only.

    The idea here is to get a bunch of early users and money up front while also creating some FOMO (fear of missing out).

    Disclaimer: I don't have any direct experience with this approach. I just thought it was worth mentioning as I've seen it a few times and it has pushed me over the line to buy something I might otherwise not.

  8. 1

    This probably doesn't address your business need but as many people are getting paid bi-weekly it would also make sense to have that option too

  9. 1

    As a Business owner, lifetime deals are crap

  10. 1

    I used to think tiered approaches were always king. That is likely when you have a wide audience and lots of variance in your customers - i.e you have individuals, startups, and enterprises.

    The tiered approach also works well when you are accepting donations - or non-required payments.

    In your case, you are trying to market to a very specific audience. They will have similar interests, opinions, and budgets. If I were you, setup one option, maybe two.

    Limit them, like you said add some friction. This will do two things: weed out the uninterested and force people who enjoy the benefits.

    If it doesn't work out, simply add plans/tiers later on.

    Let me know how it goes!

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