Dornubari Vizor January 6, 2023

Developing A Membership Pricing Strategy — 3 Key Components Of An Effective Pricing Strategy

What do you have in mind when it comes to Membership Pricing? Probably, an unstructured but basic idea of charging your potential community members for the value you provide. And that is perfectly fine as you begin. However, you need to come up with a membership pricing strategy with a suitable pricing model.

A well-suited membership pricing model goes hand in hand with a well-thought membership pricing strategy.

Understanding different membership pricing models is the way to go. It will enable you to pick the right model that resonates well with your progress and revenue goals.

In this article, we will help you understand and create your own membership pricing strategy. We will round off all the Membership Pricing models. Further, we will talk about essential aspects of developing the right membership pricing strategy. That will allow you to make an informed decision.

Let us begin by understanding what a membership pricing strategy is.

What Is A Membership Pricing Strategy?

In essence, it is your price plan! It tells about how much you would be charging your members and how frequently. This strategy will drive revenue through your customer ecosystem on your site.

What’s At The Core Of A Membership Pricing Strategy?

At the core of a “membership pricing strategy” is a membership pricing model.

Look at it this way. In a membership business, you have financial and growth goals. A membership pricing strategy with a well-suited pricing model is a system to achieve those goals.

Next, let us understand what a membership pricing model is.

What Is A Membership Pricing Model?

Simply put, a membership pricing model is a structured and well-calculated manner of charging your members.

Think of this model as a roadmap that dictates how often and how your members need to pay. This payment comes in exchange for benefits in form of courses, exclusive knowledge access, or any other community perks.

The nature of the model you pick depends on several factors. Some of these are the niche of your business, your value proposition, goals, revenue expectations, operating costs, and your targeted audience. Any model you pick has to correspond well to your needs.

It would not be wrong to refer to your membership pricing model as the backbone of your membership business. However, striking the right model can make all the difference.

A well-suited membership pricing model will enable you to drive the value you deserve. Moreover, it brings you revenue that further can be used for growth as well.

With that in mind, let us begin with different membership pricing models.

8 Membership Pricing Models

Now, we will tap into different membership pricing models. It would be good to have a solid value proposition of your business in mind before picking any of the models here. First, go through these models to get a good idea of each option. You can work out your choice later.

Lifetime Membership Pricing

Done and dusted! This membership pricing model is the simplest one. It is a one-time upfront payment for a lifetime of membership.

This is a hassle-free pricing model for both sides. A lifetime pricing model is enticing to potential members who wish to avoid recurring payments.

You can channel it smartly and use it for early adopters with a reasonably-good discount. That can get you quick sign-ups. For this model, you need to have a good idea of customer lifetime value and the rate of any renewals.

Here is a real-life example of this model implemented by ACCA for its community.

Time for some downsides. There is a fair chance of low community engagement over the course of membership. Plus, it can give your membership an overpriced outlook that can bring fewer leads.

Lastly, it might not be sustainable for your revenue goals.

Recurring Fixed Term Membership Pricing

The most popular one and highly recommended!

In this model, the membership comes with an expiration date and set payment intervals.

The member is required to renew their membership on set periods i.e. monthly, quarterly, bi-annually, or annually. Renewals are mandatory for membership retention and access to premium content. Fixed Term model sits perfectly on the calendar year.

Babbel uses the recurring fixed-term pricing model. You can offer a seasonal discount like theirs to attract more leads.

Deploying this model allows you recurring predictable revenue. Recurring revenue is one of the biggest motivators for starting a membership business. According to Online Membership Industry Report 2022, 81.5% of people started their membership business to attain recurring revenue. It ultimately enables you to pave your way ahead for business growth.

Tiered Membership Pricing

Here is when things get a bit complex but more efficient!

In this model, the value you offer branches out into several tiers. These tiers offer different product and feature combinations available at different price points.

This instills flexibility into your offering by making it more suitable for the needs of different customers. Generally speaking, most sites have three tiers/packages, usually referred to as basic, pro, and premium. There is room for more tiers but that has the potential to make a customer indecisive.

One can also name the tiers based on the nature of the targeted user, just like Apple Music.

The tiered membership pricing model can be beneficial for you and your members. First, it enables experimentation for you and your customer. Next, it presents your customer with choices leading to a more positive outcome. That ultimately gives it an edge over the above-mentioned models with the yes/no condition.

You can also free tier/package to attract members. This way, you can allow them to experiment with your service and you can get testimonials as well. Moreover, you can upsell your members to pay for tiers with more perks.


Putting it simply, free + premium = Freemium. For sure, a smart one as it offers true value.

The Freemium model is an interplay of free-of-cost features with optional paid features. In this case, a member registers for a free membership that comes with limited access and perks. The member can upgrade their membership by paying a certain amount to enjoy full access.

Spotify’s model is a phenomenal example of Freemium. It offers a basic free version and a premium version as well. The premium side of Spotify’s Freemium offers a delightful, smooth, and ad-free experience.

Remember that a freemium is not like free trials. Freemiums do not expire, and the user can have access as long as they want. This model is well-suited for beginners to build a community and authority in their respective fields.

Usage-Based Membership Pricing (Pay As You Go)

A membership pricing model that is fair!

According to this model, a member will be charged based on the usage of different perks a community offers. There can be when a member or subscriber is not able to utilize their membership perks fully.

Think of it this way. You pay to get access to a community with courses, and that access will expire after a period, say in a month. Due to any reasons, you were not able to complete all the courses, it’s the end of the month and your access expires. Boom!

Now, your payment and unutilized perks just went down the drain. Here comes the question of whether this is fair or not. Well, this model puts that debate to rest.

This model operates enables the application of an Activity-based Management strategy. That allows companies to operate with cost-efficiency.

Usage-Based membership pricing mode is well-suited for Saas companies. AWS (Amazon Web Services), the world’s leading cloud computing platform uses this Pay-As-You-Go model ever since it began. It offers an AWS Online Calculator to estimate the price of the templates and solutions you pick.

Using this model will give a positive image of your site and say a lot about your personal values. It will set a real sense of transparency and utmost fairness among your members. Remember, the use of this model may lead your revenue to vary a lot.

Custom Rate Membership Pricing

Taking the extra mile to create value for your customers!

The Custom Rate membership pricing model is brilliant. In this model, you offer solutions tailored to the unique needs of different members/clients. This model gives freedom and control to the member but the core authority remains with you.

The Custom Rate pricing model is very helpful in case you are dealing with enterprises that want a very specific combination of features. You need to provide a solution to cater to the complex needs of your member. In that case, a fixed-rate pricing model is useless.

For this model, you need to have a very clear idea of your value proposition for specific membership services. If done right, it is capable of creating high value for your membership business.

Installment-Based Membership Pricing

A compassionate yet risky model!

This installment-based model comes into play when your members cannot afford a one-time high payment. In that case, you can apply this model and come up with an installment plan that is well-suited for your member. You set up an initial fee with a recurring fee at fixed intervals, i.e. monthly basis. It will also include a billing cycle with an expiration date.

This kind of model is helpful for people who wish to be a part of your community but cannot afford it. Plus, it can help you a lot in lead conversion.

But, it is risky! You need to lock the member; otherwise, they can cancel their subscription or disappear. That can take a toll on your business. You need to limit the user’s control over their account and implement security protocols.

Group-Based Membership Pricing (Umbrella Model)

A long-term investment model that boosts community and revenue for membership sites.

This model entertains groups who wish to join your community. Mostly, this model works in the case of B2C membership companies such as fitness or well-being clubs.

You may charge a comparatively lower fee for each group-based membership. Now that might not seem so profitable as you begin. However, you need to look for value in the long run. Your community and revenue will grow.

In the long term, you can upsell these group-based memberships and lead them to upgrade. You can also upgrade your group-based membership charge over time.

Next, let us grasp the crux of a membership pricing strategy.

The Right Recipe To Create Your Own Membership Pricing Strategy

You know about the pricing models. Now, comes the strategy. How much would you charge your potential members?

Let us set that straight for you.

When coming up with a price that would function well on your pricing model, consider the following 3 key aspects of your membership business.

  • Your Costs
  • Your Member-base
  • Your Competitors

Your Costs

Your revenue has to cover the overall cost of running your membership business.

Take into account all of your business costs (fixed and variable). Then add a certain percentage margin to attain a membership price for your site. This strategy will keep things simple and aligned for you. However, it lacks feedback from your members and other aspects.

Your Member-Base

As it is said, “Know your audience”

You need to analyze your member base. Check what your target audience is. This will enable you to find out how much they are willing to pay. This can also affect your choice of pricing model for your site.

You can figure out how to come up with a price that corresponds well to the budget of your target audience. Plus, you can create tailored features and add-ons for your target audience, ultimately driving more value.

Your Competitors

You need to eye on your competitors’ pricing. Running a competitor analysis would be a great idea. The 2022 Online Membership Industry Report 2022 tells that 34.7% of the creators came up with their pricing after analyzing with competitors.

First, come up with a list of your potential competitors.

Next, check their prices in light of their services, free benefits, number of packages, and what their members say about them. Then, you can come up with a reasonably-good price for your services.

Work on these three aspects with due consideration. You will be able to fashion yourself an efficient membership pricing strategy.

Getting Your Membership Pricing Strategy Into Action!

You need to know this!

Let us say now you have a membership pricing strategy. You have also chosen a membership pricing model for your site. Well, unfortunately, that’s not enough.

Your strategy is still just like a plan on a piece of paper. How you are supposed to get that into action to achieve your goals.

You need a reliable and versatile membership platform such as GroupApp for that.

Try the #1 Membership Platform, GroupApp!

GroupApp is trusted by over 575 creators. It will set your membership pricing strategy in motion.

GroupApp enables you to create value for yourself and your community! Let us tell you how.

GroupApp enables you to scale your Revenue, ensuring financial well-being!

GroupApp empowers you! With its exceptional set of features, you can channel your expertise into creating a sustainable membership business. You are able to build a predictable income for yourself by selling courses and recurring membership subscription charges. With its features, it will accelerate your processes and strategy to drive more revenue.

And, GroupApp’s success speaks for itself. With the help of GroupApp, the Founders of Wealth Nation were able to make a six-figure, $100,000 membership community in just one year!

Check out the Wealth Nation’s journey with GroupApp here or you can listen to their story right here.

GroupApp is a Cost-Effective Solution!

GroupApp understands how important it is for beginners at content creation and young entrepreneurs to use affordable options. In fact, that is true for any sort of digital expert. Costs matter! That’s why GroupApp offers 4 pocket-friendly plans for every kind of customer. Whether you are a beginner or an enterprise with a massive team, GroupApp has got your back.

Check out the GroupApp pricing plans in detail.

GroupApp is a Complete Community Building Solution!

With GroupApp, you don’t need to look anywhere else. You will have every feature and integration that is essential for building an effective membership business. That in turn is good for your community members as well. A one-stop solution is what everyone looks for.

GroupApp offers an interactive and comprehensive set of tools for community management. You can build channels for engagement and discussions. Not just that, you can adjust access levels according to each member’s subscription.

You will also have a GroupApp Library. This feature is for harboring your community resources and course material.

Up next, you can even hold Live Streams using GroupApp for webinars and courses. That allows you to make an interactive community with high engagement rates.

GroupApp’s Course Management feature is for creating quality cohort-based courses. You can even track your student’s progress with personalized reports. That will give your community members a sense of close coordination and care.

Not only that! GroupApp goes the extra mile by offering App Integrations. Its efficient workflow API and integrations, such as Zapier, will streamline your processes. You can even build your own workflows with your preferable tools. On the whole, your business will function with absolute financial well-being.

All of this sounds like a pretty good deal! So, what’s next?

Create Your Free GroupApp Account!

A free GroupApp account! You can begin your journey with GroupApp by creating a free account. That’s what amazing is so good about GroupApp. It leverages users to experience the platform features and makes room for experimentation. You can start earning money right away!

Later if you wish to increase your revenue and broaden your community, you can opt for any of the affordable paid packages by GroupApp with more features.

Create your FREE account now at GroupApp!


Create your free account

Join 1,100+ creators and bring your courses and community together!

No credit card required

All rights reserved . GroupApp