What you should charge for your membership site will depend on a number of factors like your market, your competition, and the content in your site. If your market is more affluent then as a rule you can charge more. For instance, you can charge more if your market is commodities investors than you can if your market is school teachers looking for lesson plans. There are lots of very successful sites that charge only $9.95 per month and have thousands of members that never leave because it is so cheap to stay a member, and there are sites that charge several thousand dollars per month and offer content plus services like coaching. While there is no “magic formula” for determining a website’s price point, the following can be used a guideline.

Price Point Levels:

Level #1: $9.95 – $39.99 per month – This is the range that most new content driven paysites will start at. Anything under $40 is considered an impulse buy. This is the range that you can safety charge for digital online information without having to ship anything physical like a monthly newsletter, CD, or DVD. Research done by infomercial marketer’s has revealed that any charge of $39.99 or less will not raise a red-flag by husband’s going over credit card bills, which is why you will see most monthly recurring programs geared towards women (cosmetics, skin care, etc.) will have a monthly recurring fee of under $40 per month.

Level #2: $40.00 – $299.99 per month – Membership site’s that are this intermediate range generally offer a lot of content or highly specialized content that can’t be found anywhere else. These sites may send out physical DVDs every month or provide a database of research information to businesses.

Level #3: $300.00 – $999.99 per month – Websites with monthly fees in this range usually have a lot of content, send out physical products on a monthly basis and offer some form of online training or coaching. StomperNet.com falls into this category and bills it’s members $800 per month.

Level #4: $1,000 and above per month – Most sites that command over $1,000 per month are websites that offer business related information. For instance, many employment recruiting companies pay Monster.com several thousand dollars per month for access to the large database of job seekers. Websites that cater to individuals and charge this amount generally also provide physical items or personalized coaching like Dan Kennedy’s Centurion Inner Circle which charges it’s members $2,297 per month.

Pricing Plans

Monthly –This is the most common pricing plan. It’s simple for the member to understand and your members will become trained to see the charge for your site on their credit card statement every month. A monthly payment plan has the least amount of customer care problems.

Quarterly – Sites that charge every three months tend to have problems with charge-backs and refunds. This is because of two reasons. First, many members will have forgotten that a charge is coming and will get their credit card bill and say “What is this charge for? I never bought that.” Second, by billing quarterly the member’s charge will be almost three times higher than it was for a monthly membership. So while a $19.95 will go unnoticed month after month, a member will take note when his credit card gets hit with a $50 charge. When the member first joined he may have liked the idea of saving $10 each quarter, when the bill comes he may decide to cancel his membership from “sticker shock”.

Annual – When member’s are polled and asked what type of payment plan they would like to be on, the majority will say they want to be billed annually if it saves them money. However, in reality there is a high drop-out rate when the bill comes after the first year. However, the plus side of annual billing is that the average paysite member that is on monthly billing will only keep his membership for 6 months. So if you offer a an annual payment plan, first determine how long your average customer stays a member and make sure that the amount you charge is equal to or greater to that amount and you will come out ahead. Then any annual members that do keep their memberships is just added revenue. Also, if your sites makes a lot of money with backend sales, then it may be worth your while to have annual members since, on average, you can market to them twice as long as a monthly member.

Initial Pricing: For many membership sites, the price to join is the same price that recurs every month. For instance, a site that charges $19.95 to join will re-bill its members $19.95 every month. However, many successful sites have business models that let members join at a greatly reduced price (or for free) to sample the site then begin to charge full price after a trial period. While a lot of other successful sites will take the opposite approach and charge a high premium price to join, then will lower the monthly recurring price. There are pros and cons to both models which will be explained below.

Free Trial Offer: A free trial offer is where a website lets the member join for free and will capture their credit card information. If the member does not cancel their membership within the trial period then their credit card will be billed for a full month and monthly recurring billing will start. The free trial period generally does not last a full month. It will be anywhere between 3 to 10 days. A free trial offer should not be used for a site that has a lot of archived content unless the site updates almost daily, as the member can simply download all the content then cancel his membership. Some sites protect themselves by having certain download areas available only after the member is past his trial period and converts into a full paid member. If this strategy is used, it should be clear in the sales page that the member will not have full access to the entire site.

Paid Trial Offer: Sites that offer an initial period, or the first month, at a reduced rate are offering a paid trial offer. Many sites will allow members to join for as low as a dollar for the first month. StomperNet very successfully used this business model. They charged their members only one dollar to join then converted them to an $800 per month recurring billing plan. By doing this they were able to fill all 1,000 of their limited membership slots and there is now a waiting list to join. Both the free and paid trail offers are good strategies for sites whose content is comprised of user generated content. For instance, if the site’s member’s area has a forum, then a new site can immediately add a lot of members quickly to start an active forum.

Premium to Join: Many established sites charge a premium to join. Sites that offer a lot of initial content up-front and limited on-going updates use this model. This strategy also works well for a site that sells software. The site may charge a $99 fee to join which gives the member access to download the software, then the monthly price drops to $9.95 and gives the member access for support, add-ons, and updates. One advantage to a premium to join model is that member’s will be hesitant to cancel their membership because they if they ever want to become a member again, they will have to pay the premium to re-join.