Pricing membership fees for your membership site isn’t always easy. The price depends on numerous factors, including perceived value. However, if you aren’t careful, your membership site could be costing you money.
The first thing to figure out is the actual cost of running the site. This does not include building the site and launching it, although that cost does need to be covered as well at some point. Mainly what you are looking at right now, is the actual cost to operate and maintain the site after it has been launched.
Some costs to consider include:
- Web hosting fees
- Domain name renewals
- Any membership fees that you must pay in association with the site
- The cost of adding content to the site on a regular basis
- The cost of services associated with operating or maintaining the site
- The cost of payment processing
- The cost of your autoresponder
- The cost of ongoing marketing
Take note of how often such expenses are paid out. For example, a domain name only has to be paid for every year or two years, depending on how you set it up. That needs to be averaged out monthly. If it costs just $10 for the domain name, and it is good for one year, it should be figured at $10 divided by 12 months.
Once you have a dollar figure for operating and maintaining the site you need to determine the cost of building and launching the site. This may include:
- The cost of membership site software
- The cost of having content created
- The cost of developing bonuses
- The cost of all associated services
- The cost of setting up various services (not ongoing monthly costs – just the setup fees)
- The cost of marketing the site during the launch period.
- The cost of all testing campaigns
You don’t want to have to hit members up with higher membership costs to recoup your startup costs right away. Add it up, and divide by twelve. It shouldn’t hurt you to spread the recovery of those costs over twelve months.
Add the monthly cost of operating and maintaining the site to the monthly cost of starting the site. This is your total monthly expense.
Now, set that number aside, and look at the actual value of the site. Don’t pay any attention to the perceived value at this point – just the actual value. Note that this is the hardest part. How much are pixels worth? Instead, you have to consider what the content on your site is worth to your intended audience.
For example, if your audience is highly interested in organic herb gardening for medicinal purposes, it would be worth a great deal to them. On the other hand, if they only have a passing interest, it would be worth less.
As you can see, determining this may be an impossible feat. So instead, let’s go back to your monthly cost. Ideally, you should hope to earn a profit of at least 100%, and hopefully more. For example, if your monthly costs are $100, you would hope to make at the bare minimum $200 from the site per month. Of course, this is an extremely low number, and just an example.
You must also consider the number of members that you will have. This number cannot be easily determined, unless you have placed a restriction on the number of members that you will have.
You need the cost of membership to be affordable. Few people have the means to pay hundreds of dollars, month after month, for a membership. Although, if your information is very specialized, and targeted to professionals, they will pay it.
Remember that the average membership site brings in about $20 per month, per member. If you have just ten members, you’ve achieved your goal of 100%. Hopefully, you will have closer to 100 members or more, which would bring in about $1900, after you subtracted the operating costs.
Nobody can tell you exactly what price you should set, but you do have to set a price that is affordable and competitive. What are your competitors offering, and what price are they charging for what they offer? This is a good starting point for determining what you will charge.
The most important thing is to know what the cost to you is, so that you can set prices that will at the very least cover those costs. Again, you won’t have any idea of knowing how many members you will have, until you have them. Furthermore, if you start out with a price that is too high, with a membership site, you will find that it is difficult to lower that price for future members, after your current members have already paid the higher price!
Think about your pricing carefully – and be prepared to stick with the price that you choose later.
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The perceived value of your membership site's offer should always be greater than the amount you are charging. These days, people want more for their dollars – and if you can’t give them more, someone else can, in most cases. The only time that an Internet Marketer can get away with charging the full value of the product these days is if he or she has something that really cannot be obtained from any other source. That rarely happens.
So, does this mean that you have to charge less for your membership site than what it is worth? Not at all! You can charge exactly what it is worth, as long as your members feel like it is worth more. Don’t worry, you aren’t about to scam anyone.
So, how do you raise the perceived value of your membership site? With bonuses of course! You need to give away several bonuses with membership. Furthermore, depending on what you are charging, you may need to offer bonuses on a regular basis.
Ideally, you want to retain membership. Therefore, you want to offer bonuses based on the length of the membership. One way to do this is right up front. For example, you offer membership at $20 per month, paid on a monthly basis. You could also offer an option of the member paying $180 up front, which gives them a total yearly discount of $60 right from the start.
You will, of course, also offer downloadable bonuses on top of this, which will be discussed shortly.
You could also offer upfront bonuses, and then have other bonuses available once a member has been a member for a certain length of time. They might receive bonuses after three months of membership, six months, nine months, and one year. To do this, however, each bonus needs to be a little better than the last one – and worth retaining membership for. Again, what you are considering is the members perceived value, and that value over time.
Now, what should you offer as a bonus? There are lots of choices. Obviously, the best bonuses are those that can be downloaded. However, you can also offer some form of service that you can perform for members. Use caution here, as this means that you have to use your time to honor that commitment – for each and every member!
You don’t have to create bonus gifts. You can use private label rights products. It is important, however, that you give those products a new title, and of course make the required changes to the product, as stated in your PLR license. A bonus that someone can easily get from someplace else isn’t worth much to you or to them.
Bonus gifts can consist of reports, ebooks, audios, videos, software, and services. Every Internet Marketer needs tools that are used to create these things. Even if you don’t think that you will need them, it is a safe bet that you will need them and use them at some point.
You need software to convert documents to PDF files, and a way to create audios and videos. At the very least, use software such as Camtasia to create screen shot videos.
You will also need software to create product covers. These may be book covers, report covers, box shots of audios, videos, or software. You can also opt to hire a professional graphical artist to create these things for you, as needed. You will want to create a product cover for each bonus gift that you will be presenting, however, because this also raises the perceived value of that product.
How many bonuses do you need? At least three, and possibly more. Again, people want value for their money. Some people offer thousands of dollars worth of bonus materials, and you can’t do any less.
Do you have direct competition in your niche? Do they have a membership site? Go see what bonuses they are offering. Are they just selling a related product? Again, go see what bonuses they are offering. This will give you an abundance of ideas for your own bonuses – and it will also help you to compete better for that market.
Make a list of everything that your members will have access to, including bonuses, and assign a value next to each item. This information is needed to ensure that the perceived value is higher than the amount you will be charging.
The information will also be needed when you write your sales letter – and of course it will help to ensure that you don’t overlook anything when you are getting your site all set up.
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