By • 6 min read
If you’re considering charging for access to an online membership community, figuring out what to charge can be difficult. How much will people pay? What’s your break-even point? What is your competition charging?
There’s a lot to consider when determining how much to charge for an online membership community. This guide is going to help make it a little easier, giving you a framework to use to find the magic number that will work for both your subscribers and your bottom line.
Here’s what we’ll cover:
Let’s dive in.
This can be a little tough, particularly if you’re just starting out. However, understanding the value your community provides to its members isn’t just critical to pricing — it’s also important for communicating the benefits and features to potential customers and can help inform your sales and marketing materials, signup pages, and more.
Start with the unique value that you’re adding and compile a list of benefits, features, and perks, such as:
Once you have this list, you will have a good foundation to determine where your group stands in comparison to competitors and other communities in your space.
In any pricing decision, you need to understand what your operating costs are going to be, and what kind of revenue you’ll need to break even, and ultimately be profitable. It’s also important to set some revenue goals and timeframes against your operating costs. Here are some costs (by no means an exhaustive list) to account for:
The cost of hosting your community on a platform or website; server and storage costs; maintenance, etc.
Do you have or will you need staff to manage and moderate your community? Be sure to include these real or potential costs in any projections, if applicable.
How are you going to attract members to your online community? Do you have a marketing plan or sales team? Include costs for advertising and marketing campaigns, content creation, etc.
Are there any legal or regulatory requirements you need to follow based on the type of community you run? Don’t forget to account for things like business tax, and other administrative requirements.
These will vary depending on the type of online membership community your run.
Also, don’t forget to account for your time. A simple way to do this is to assign an hourly dollar value and do some math estimating how many hours your community will take to create, manage and maintain.
Generally speaking, larger and/or more established communities are able to demand a higher price. But it’s not just the size — the type of community can also impact your pricing structure. Here are a few things to consider:
Often, larger established communities with a very engaged membership base can command a higher price than one that is just starting out. This isn’t always the case — in fact, many communities choose to offer a limited number of available memberships to maintain exclusivity — but having an established community brand will allow you to charge more.
Your type of community may also impact how you price. For example, professional or niche communities can often command higher membership prices than say, more general interest communities due to their networking opportunities; industry-specific information and content; and the real value community members get.
Similarly, who your community caters to is an important pricing consideration. A student-focused community probably wouldn’t pay a $100 per month subscription fee, while a community of finance professionals would.
Competitive research is a fantastic way to get a general idea of what others in your industry and charging, and what your potential audience is willing to pay. It can also help you determine how your online community stacks up from a features and value perspective. As you go through your pricing exercise, take stock of the following when researching similar communities:
Is it common for competitors to tier offers (for example basic, premium, VIP), or offer different subscription types, like weekly, monthly and yearly?
What kind of features and benefits do they offer? How does your community compare?
How much are they charging? Analyze the price points of competitors and look at how they compare to each other and your own pricing strategy.
How many members are in their communities? What is their social media following? How engaged are their members? And, what kind of reputation do they have based on reviews?
Do they rely solely on subscriptions to their community, or do they have additional revenue streams such as sponsorships, partnerships, or affiliate programs? They may not have the same business model as you, which is an important factor to consider when pricing your own community.
While everything mentioned above is an important component in determining how to price your online membership community, the best way to know if you’ve hit the mark is by testing out your pricing strategy. We recommend you play around with some subscription models and options to determine what works and what doesn’t:
This model combines free and premium, where basic access is free and open to anyone, and users can choose to pay to access premium content or features within your community. This can be a great way to let users get a taste of your community before they make a purchase, and also allows you to upsell to a user base that is already familiar with your brand.
A great way for people to try before they buy, allowing them to get full premium access on a trial period.
Testing out tiered offers that provide different levels of access to certain channels, features and benefits can be helpful in understanding what potential customers are willing to pay, and why. This can help you determine what members find most valuable, what they don’t really care about, and how to price accordingly.
Test out different subscription lengths to see what performs best and what members prefer. Popular options include weekly, monthly, quarterly, or yearly. If your community offers regular new content or benefits, recurring subscriptions might be the best pricing strategy.
Testing pricing models and subscription types is important since you may find that a one-size-fits-all approach might not work well for your community members. By testing and monitoring performance, over time you can determine which pricing strategy is right for your online community.
Ultimately, the key to pricing an online community is to find a balance between providing value to your members and (obviously) turning a profit, while also remaining competitive in the market. While it can be challenging, following the above framework and keeping these considerations in mind can help you create and refine your pricing strategy so that you can attract, grow, and retain a healthy stream of subscribers.
If you need help pricing out your paid community, or you’re thinking of starting your own, get in touch with the LaunchPass team — we’re happy to talk you through what we’ve seen work for the tens of thousands of paid Discord and Slack communities powered by our platform.
Create and manage a subscription based community with LaunchPass.Get started for free