Membership vs. One Time Purchase? And The Winner Is...

I have done the one time purchase and it works, but it's totally up to your audience. You still end up having to do updates for the one time purchase, so why not make them good enough to get them to stay on board for months and make more over time per user?

Recently I've begun work on a new coaching program for my niche and am excited to see if the membership style works for it.

People really hate memberships, so it can be difficult to create the value and compete against one time payment style products.

If you go the one time payment method, you are better off creating new products all the time than keeping one that you update constantly. I've gone the update the same product constantly route and it requires quite a bit of work for advertising and getting a new stream of fresh buyers each week.

b - I HATE paying people repeatedly for something they could have delivered in one go.

I tend to go for the one-time fee, only because it's cost-effective for the consumer. If you have a strong product or service, membership retention shouldn't be an issue. And if a person is sincere about what they are seeking, again, membership retention shouldn't be an issue. I like to research a program, make a decision, then pay for it and stick with it. If I only have to pay one time, I don't have to worry about my account debits month after month.

But then, on the other hand, a small monthly membership fee with on-going support is very attractive, as long as the monthly fee is affordable and is not so costly that a member will get discouraged having to pay every month, and therefore, cancel.

They say the average retention rate of a membership is about 3 months.

So that means you'd make about $30 per customer with the $10/month membership site.

If you sold the product straight up for $40, then that'd be $10 more per customer.

No idea what the possible conversion rate of each offer would be.

...You can always split test offers to find out which is more profitable.

Personally, I prefer the membership site model.

In my experience, this works well opening with a course overview and leaving all the really tasty stuff towards the end to encourage people to remain members for the duration of the course.

I also tend to price the monthly membership slightly higher over the duration of the course than the one-time fee, simply to make full payment up front a better offer, in order to free up working capital for the next project.

Hope this helps.

Thanks everyone.

Good stuff so far.

Most of the replies are very similar on a a lot of key points and also similar to what I was thinking as well.

I suppose the most important piece of a membership is it has to provide improved value over a one time purchase. Something that makes it worth investing in monthly.

Updates and support are expected by customers so they aren't an improved value.

If a membership doesn't provide much additional value, most customers would prefer a one-time purchase, even at a higher price, and be done with it.

This actually reflects my own buying habits. For example, I don't own The Best Spinner because it requires a yearly membership. It's not even the price that bothers me, it's just knowing that I'll have to pay every year for that turns me off. PS.. I'm not knocking TBS, it does kick major spinning butt, it was just the first example that came to mind.

I'm only Fairly new on heres but in my own experence that i have dealt i find the monthly paid site out there many don't have value to be charged at a monthly rate also support may be effected to i was joined to a site and it took over a week to get back to me and i also tried to cancel membership last week as there where no updates for weeks etc and really didn't like getting charged 39.95 for no new infomation which they still have yet to get back to me

So def one Time Payment as in my own view is that i'd more likely buy a one time payment offer at a high price then Monthly.

I'd go for both options... Sell the $40 product and use the membership site as an upgrade. Then, on a different site sell the membership and offer the $40 product as a one time offer.

This is of course assuming that you have killer content in the membership section that you can continue to create and expand on over the months.

The reason behind these two offers is now you are capitalizing on those who want to buy the $40 product outright and the people who want to have monthly membership dues at $10. There are also those who will choose to upgrade in both cases so it's a real win/win/win and could actually make you more income.

Treat both ways as separate products and offers and see what happens.

Also, you are now creating 2 products when you really only thought you had one. The $40 product will have to be completed before selling it obviously but the membership site is something that you keep adding to so you only need to create the first months content.

Membership sites, by far. Why get paid once when you can get paid for years? Hell, I just got a check from a sponsor I used more than 5 years ago.

The best part though is that very few webmasters have a clue how to run a membership site. This keeps competition very low. You have to treat it like a business and treat your customers like royalty and those concepts are too difficult for most site owners to wrap their heads around.

Just so you know, people don't mind joining membership sites as long as they know that they can easily quit and that they will be able to get help if needed.

You guys are funny, I can't believe this is even a serious question.

My thinking is that you can attract some people who may be on the fence if you use the memebrship model. The $10, along with the idea that they will "just cancel at the end of the month", can get you more customers.

In other words, the ones that cancel after 3 months or sooner may not have bought at all otherwise, so it's not a question of $40 vs. $30 ($10 X 3); it's a question of $10 to $30 vs. $0.

Also, thinking about your "real" customers (the ones who would have paid $40), a lot of those people will stay much longer than 3 months as long as you give them a reason to. For each one that stays a full year, you have the equivalent of 3 customers at the one-time $40 price.

But then again...

The numbers can work out in so many different ways, so it really comes down to how well you know what your target market wants.

All the best,
Michael

As other's have mentioned here it all depends on your audience and what they prefer.

Personally I have one private membership site, which will be a public one soon, and I'll be launching another membership site in about 7 months which is specifically targeted toward the security industry. It's a membership site that will be teaching "malware reverse engineering" so you have to find out what your audience wants.

For instance, I have to do some considerable research to find out what the security industry would want from a membership site that taught reverse engineering.

So do some research and find out what your people prefer.

I think a membership requires a lot more content and continuity effort as compared to a one-time product.

If the amount of effort required to produce a membership site is too tough to handle, i think a one time product is a better idea. You could use the same amount of effort on one mebership site to create 3 products, which you can promote to your past customers at the backend.

I think a lot is going to depend on the content you're delivering. If you're truly delivering massive content that would work best if drip-fed over several months for optimum results, then by all means utilize the membership model.

On the other hand, if the information you have can be delivered effectively in a one-time manner for $40, then you'd want to pick this delivery method.

Instead of trying to look at it from the viewpoint of which pricing model to use, I think it'd be better to look at what you have to offer first, and then determine which pricing/delivery method would suit it better.

Paul

I agree with Jay Vikaz.

I have been toying with this idea where I sell a product and they would have the option to sign up for a program to get continued support. They would get free support for maybe 30 or 60 days then after that they would have to sign up for a support program. And the support program can be different levels, like, say, standard for email and forum support, silver for live chat on top of the standard offering, gold for inclusion of phone support. And maybe even platinum to have on-site/on-premise support, e.g., one-on-one face-to-face support.

You might want to consider micro continuity program.... It means the recurring membership fees only last for a period of time...it could be 3 months, 6 months, 9 months or 12 months...depending on how much content you have.

There are alot of benefits in this form of business model. First, you get paid regularly month after month. The second is because people are more willing to pay uhf they can see the end of it. They MUST see that at the end of 6 months, they can use the information to do something.

Personally, I use both....short reports are for one time purchase only. And membership site is my backend.

I also include a coaching program as my upsell....

If you go one time, then no support is implied and no new content is implied.

If you go recurring, then support, ongoing is implied and there should be new content too.

Whatever you do, someone is going to have an issue with it and not like it.

You just have to do it and accept that you will never please everyone no matter what you do.

Why not just offer the software both ways at the same time and on the same site. Offer it as a one time purchase for $79 OR as a monthly recurring fee (billed quarterly) of $5, membership cancellation only after the first full year. That way folks who choose the membership route get a good discount over the one time purchase and it gives you a full year to build a solid relationship with them.

Offer either a 14 day free trial or a dumb'd down trial version of the software.

YMMV


Terry

Both work but personally? I love a good one time offer, it makes me feel like I got a good deal for some reason . Depends on the audience and how they'll take to it, also the niche. Also depends on if you will be updating the product. Some people will charge a monthly fee and give nothing back, if you do that good luck getting repeat buyers. However, if you give out good quality content each month people will love you

I think is better offer a expensive product at the frontend, because you deliver everything in the first download, I think if you offer a membership site should be good to offer for high price not $10, this works equal the one time purchase, for example you sell your product for $97 and deliver the content you are about to deliver in 9 months with a membership of $10 per month!

I think it really depends on what the product is. Is the product a stand-alone item that doesn't really require support or updates going forward? If so then I think a one-time payment is probably the best.

But is it time-sensitve? Are you selling content and delivering it like it was "news?" Reason I ask is because I know a fellow IMer who writes about pro-wrestling (of all things!), charges $7.50 per month and has 1000+ subscribers!

I think with a membership site you need to constantly be offering something fresh and new to keep people paying the monthly rate.

And the Winner is?

Horses for courses.



No one individual can state what is right or wrong, you have to test and then test again. What works for some, won't work for others, there is no winning formula thet you can take to any market and sell it as the " recipee" of the day.

Unless, of course you know different, and are willing to share it with others.

It depends on your product, you cannot imagine selling "Monthly fresh articles" for a 1 time fee or "Wordpress theme with updates" on a monthly fee base..

It also depends on where this product fits into your overall business plan.

In other words, is this a front-end or a back-end product?

Too many people just throw up a bunch of sites with no real strategy. You really have to think where this fits into your funnel.

In general, it's MUCH easier to start a relationship with a one-time purchase product on the front end (even if a membership site has a $1 trial).

Recurring revenue sites are great once you have established a relationship.

And as others have said, then the name of the game is RETENTION (if you don't retain them, then it's not really a recurring revenue product)

Rock 'on,
Ryan

It really revolves around the product and the market. Sometimes a product can be offered either way, but sometimes it seems weird.

What to do in this scenario:
Selling a website to a business owner that doesn't even know what cPanel is. Do you offer a large one time fee and just host it forever? What if they want something changed? It sounds weird to charge them a one time fee for continual support, even if it is a lump sum. Sometimes the recurring price sounds better to the client.

Personally, I prefer the one shot deal myself. But it might also depend a little on what the product is. I'm likely to at least consider a membership if it includes a forum where I can share and stay up on what others are saying/questioning/sharing.

No comment.

Good stuff. A lot of good advice here that I think a lot of people who are considering membership sites as an option can use.

It also comes down to your own preferred lifestyle to be honest. If you don't want to keep creating content, then a one-sale is the go.

Hence why I prefer drip feed memberships that expire after a fixed time. No need for ongoing. Customer gets value. You make more money.

I have run both types and from a vendor's perspective, I prefer either 1 off or fixed term.

I can also add that I spent almost 1 year testing membership v 1 off and for my membership products, I have now gone to 1 - off sales.

Here's why...

In most cases and depending on the product... if members are not consuming it, or getting the results they desire, then they quit. Simply really.

So in answer to the OP's question.. it's not just the 2 options to consider, but also the membership model you wish to use.

If we are talking traditional membership model, then... no way for me.

And from a customer's perspective, unless the membership helps me achieve what I want, then I'll go for a one of product. And the reason for this is that many memberships just stuff their are with a forum, and tons of content to make it look like you are getting amazing value for your money. And most of the content you'll never have time to read, or will never use.

But that's just my view.

Actually it can be funneled down to a very simple question.

• Do you provide a service or an information that is constantly being refreshed?
• Do you constantly add new valuable articles?
• Do you provide SaaS?

If answer on any of those is Yes, then go recurring.
If no, you don't have any reason to do it.

one time payment up front but make them login to a membership site to get access to the product

then upsell them the long time support and updates/upgrades

If I am the affiliate, I prefer membership. If I'm the end user, I prefer one time payment..