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Memberships: Gradual Price Increases

by MarketingMinded
9 replies
Anyone have experience with gradual price increases for continuity/membership sites?

How did you implement them and what are some of the things one should be aware of?
#gradual #increases #memberships #price
  • Profile picture of the author GMD
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    Originally Posted by MarketingMinded View Post

    Anyone have experience with gradual price increases for continuity/membership sites?

    How did you implement them and what are some of the things one should be aware of?
    Yeah, bleed 'em and bleed 'em good!

    Seriously, strictly depending on the VALUE that you're offering your members you're going to have to justify any price increases to your members; by justify I mean are you offering something now that's above and beyond what you were offering previously?

    You get the idea.

    But the question remains, what's your reasoning for wanting to increase, gradually, your prices? Are you starting way low to get them hooked and wanting to go up from there? If so, that's a different subject all together.

    Now, one membership site that I own I have kept the price consistent always offering better content that's usually not found anywhere else nor presented in the way that I'm able to present it. I'd rather have people paying me $30 a month for years and years than get them "hooked" on something less and then risk loosing them down the road with increases -- gradual or not.
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    • Profile picture of the author MarketingMinded
      Originally Posted by GMD View Post

      Yeah, bleed 'em and bleed 'em good!

      Seriously, strictly depending on the VALUE that you're offering your members you're going to have to justify any price increases to your members; by justify I mean are you offering something now that's above and beyond what you were offering previously?

      You get the idea.

      But the question remains, what's your reasoning for wanting to increase, gradually, your prices? Are you starting way low to get them hooked and wanting to go up from there? If so, that's a different subject all together.

      Now, one membership site that I own I have kept the price consistent always offering better content that's usually not found anywhere else nor presented in the way that I'm able to present it. I'd rather have people paying me $30 a month for years and years than get them "hooked" on something less and then risk loosing them down the road with increases -- gradual or not.
      What's wrong with that "hook" tactic?

      Say start at $10, then $27, then peak at $47? All with components added with each increase?
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      • Profile picture of the author GMD
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        Originally Posted by MarketingMinded View Post

        What's wrong with that "hook" tactic?

        Say start at $10, then $27, then peak at $47? All with components added with each increase?
        There's nothing wrong at all with the "hook" tactic.

        But like any tactic, it has to be employed correctly and under the right circumstances.

        So in your case, you have to ask yourself: do I possess those correct set of circumstances?

        Example:

        You've got a membership site and you charge $10 to join and your members find out, "wow, this site is packed full of exactly what I need and what a great price".

        Now you've got members in at $10 thinking they're getting a great deal.

        Then you somehow inform them that the price is now going up to $27.

        How do you justify the price increase?

        How many of your current members at $10 will leave and how many will stay at the $27 level? Would you rather have more members staying with you at $10 than fewer members staying with you at $27?

        Remember, it's a membership site so members expect new components and material to be added regularly anyway. Therefore, unless you can add way more than just the obvious, you might find yourself loosing more members than you'd care to lose.

        Now don't get me wrong: it CAN be done and it's been done.

        However, specifically for your situation, it's not possible right now to say if it would work for you unless you'd like to disclose what kind of membership site it is.
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        • Profile picture of the author MarketingMinded
          Originally Posted by GMD View Post

          There's nothing wrong at all with the "hook" tactic.

          But like any tactic, it has to be employed correctly and under the right circumstances.

          So in your case, you have to ask yourself: do I possess those correct set of circumstances?

          Example:

          You've got a membership site and you charge $10 to join and your members find out, "wow, this site is packed full of exactly what I need and what a great price".

          Now you've got members in at $10 thinking they're getting a great deal.

          Then you somehow inform them that the price is now going up to $27.

          How do you justify the price increase?

          How many of your current members at $10 will leave and how many will stay at the $27 level? Would you rather have more members staying with you at $10 then fewer members staying with you at $27?

          Remember, it's a membership site so members expect new components and material to be added regularly anyway. Therefore, unless you can add way more than just the obvious, you might find yourself loosing more members than you'd care to lose.

          Now don't get me wrong: it CAN be done and it's been done.

          However, specifically for your situation, it's not possible right now to say if it would work for you unless you'd like to disclose what kind of membership site it is.
          It's targeting people who are new to or struggling with email marketing. Teaching best practices on building unique one-to-one relationships with subscribers, ultimately with the goal of increasing lifetime value.
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          • Profile picture of the author David-JP
            I would leave the price the same for existing members and increase it for new sales.

            David
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            • Profile picture of the author Steve B
              Personally, I prefer the strategy of reducing the price a little for customers that stay with you.

              The average person stays with paid membership sites about 3 - 4 months (according to what I have read from Ryan Diess). If you try to raise the price over and over you are going to lose customers quickly, in my opinion.

              Keep giving continued value and lower the price a little as an incentive to stay. Even if you have the member paying for a year and then give him a free membership forever, you're going to have a friend for life and someone who will probably tell all his friends about the sweet deal you gave him. It certainly beats having a guy pay for three months or less then losing him forever.

              Steve
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      • Profile picture of the author shane_k
        Originally Posted by MarketingMinded View Post

        What's wrong with that "hook" tactic?

        Say start at $10, then $27, then peak at $47? All with components added with each increase?
        Well like everyone else is saying it depends on how you apply this tactic.

        Look at the two example situation below.

        Situation #1

        let's say that you walk into a McDonald's tomorrow and you buy a cheese burger, fries and a coke and they sell it to you for $8.

        Then you go in two days later and order the same thing but this time they want $12

        Then two days after that they want $16.

        How would you feel about that?

        And would you continue going to McDonald's or find somewhere else?

        Now,let's look at

        Situation #2

        let's say you go into McDonald's and order a Burger. They charge you $3 for it.

        Then two days later you go in and they say the Burger is now $5.50 but it comes with a drink.

        Then you go back a week later and they tell you well the Burger is now $8 but it comes with a drink, and fries.

        So again I ask you how would you feel about this second situation?

        Would you continue going to McDonalds or find somewhere else?

        Looking at things like that can you now see what some of the other posters are trying to tell you about "justifying" the price increases and increasing the value along with the price?
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        • Profile picture of the author David-JP
          Originally Posted by shane_k View Post

          Well like everyone else is saying it depends on how you apply this tactic.

          Look at the two example situation below.

          Situation #1

          let's say that you walk into a McDonald's tomorrow and you buy a cheese burger, fries and a coke and they sell it to you for $8.

          Then you go in two days later and order the same thing but this time they want $12

          Then two days after that they want $16.

          How would you feel about that?

          And would you continue going to McDonald's or find somewhere else?

          Now,let's look at

          Situation #2

          let's say you go into McDonald's and order a Burger. They charge you $3 for it.

          Then two days later you go in and they say the Burger is now $5.50 but it comes with a drink.

          Then you go back a week later and they tell you well the Burger is now $8 but it comes with a drink, and fries.

          So again I ask you how would you feel about this second situation?

          Would you continue going to McDonalds or find somewhere else?

          Looking at things like that can you now see what some of the other posters are trying to tell you about "justifying" the price increases and increasing the value along with the price?
          But if as an ongoing customer you get a charter membership card, which allows you to buy the burger at the original price- wouldn't you be happy? wouldnt you be more likely to come back and prevent your membership from expiring?

          I know i prefer to see something i just bought go up in price- makes me think i'm smart

          David
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  • Profile picture of the author Sarevok
    I like what David says.

    Increasing pricing point just isn't legit.

    Ask the CEO of Netflix if it worked out for him; he nearly folded his million dollar enterprise with a FEW DOLLAR increase.

    Imagine if your ISP bill went up 40% and they offered the same service? Would that please you if they said "they're adding new exciting features" ?

    Better to let the people who are already members keep the same price, and anyone new to get the increase.
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