Raising the price of your ongoing membership can be very tricky. While traditional corporations like Netflix can get away with sudden increases, you might end up with disappointed members and possible lose a good portion of your clients.
In this episode, we are discussing why price increases during a membership are very delicate and how you can work around them.
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3 Big Take Aways
- Why price increases during a membership can have a negative impact
- How to avoid shortcuts that will create problems in the long run
- How to create additional funds without price increases
- Mighty Networks – a community & online course platform, bringing together your website, online courses, memberships, and more to create your own thriving creator economy business.
- Mail Chimp – amarketing automation platform and email marketing service.
- Paul & Melissa’s Inner Circle – The Inner Circle with Paul & Melissa Pruitt is an epic 12-month experience for online business owners, coaches, course creators, and membership site owners who aspire to create financial freedom and a lifestyle they want for themselves and their family and also create a positive impact in their community and the world.
- Adaptive Membership – Adaptive Membership is an exclusive opportunity for online business owners, coaches, course creators, and membership site owners to play bigger and bolder in their business and explode their bank account with more clients!
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Melissa: So we're going to dive right in and we're going to start with Sharon.
Sharon: Hello. I need to give a little back story. So I have a founding member group right now with 20 people and I have set it up in mighty networks and I realized that I need to up the level . I need to go from community to a business level because it's just not working the way it is.
So that's going to cost me a bunch more money. My founding members came in for $200 for a whole year. Is it appropriate to ask them now to pop in a little bit more since I'm upgrading the network? And if so, how would you do that? Or do I just eat that and leave it? I'm not making money at all.
Paul: Carrie has her hand up . So she has some input.
Kari: So going to, first of all, tell you, you don't have to spend more money lady. I have 600 people in my membership and I'm delivering everything with MailChimp.
So, you know, if you're saying you're a 20, you do not need to be spending huge sums of money for a platform. And I mean, I might eventually switch, but I haven't found a reason to yet. And when I reach a point that I need it, I will move it. But
Think about the fact that, you don't have to always spend a ton of money to achieve the results that you want. So that's my advice.
Paul: Excellent, love that. Anybody else have any input?
Sharon: So the mighty network that I signed up for, I signed up for $29 a month. So it will go up to $89 a month. I thought I would have new members coming in after three months, but my group isn't ready yet. So I'm keeping them just founding for a while longer.
Zelisa: Hi, just a quick question. When you say you need to upgrade for what purpose, like what are you hoping to add to the experience?
Sharon: It's just a better structure for delivery of the course.
Zelisa: Okay. So I feel like there was a little bit more of a deep dive into like structure. Like there's something fundamentally with the system and structure that it, I don't know if your members feel the differences, but it's more on your end that maybe you feeling like you need better systems to support whatever you have to deliver.
Sharon: No, it's just, without taking a lot of time, it's just the way the mighty network is structured. It would give more structure for my students. So it's easier for them to find the things that they need to find.
Zelisa: Okay. So without speaking about the platform, I would say in general with the members, whatever they pay, they pay, they're not going to want to pay anymore. And so if you need to look for a, more of an investment for your members is going to have to come from the new people. That would be my take. Yeah.
Paul: Any other advice? So real quick, besides a, like Netflix, where you got a notification that they're increasing the price on you, has anybody else experienced a membership where the influencer came back and said, Hey, we need to raise the price on you. So we take away like a traditional corporation company. Has anybody had this in the influencer space at all? Okay. So I think it's something that people aren't used to. So I think that's just something to keep in the back of your mind, like if their condition, if there was like an, almost an industry norm and people are used to that, but before I jump in, do you want to?
Melissa: Just coming into like the delivery. And I know part of it is definitely a book. Like we have our own expectation, then it sounds like too that's structurally there is something that you want to make it easier for them to find the content. So it's finding that balance between what is the top, most important things as how they could find that content and navigate, because really at the end of the day with our memberships, it's all about, we want our members to be able to find content very easily and then also to have good communication and support.
So if what your platform doesn't allow all that, then I definitely will look into it. And maybe there's a hybrid solution, like kind of a bridge solution. In the meantime, from one to the other, I don't know, depending kind of what the structure that wouldn't add, like an extra financial piece there to you, but something as a hybrid piece that you could do in the meantime, as you're building, that could be something just to kind of think on a marinade on, but that also could maybe solve a solution if it's just a matter of delivering content, what could there be something to really list out what kind of experience that you want your members to have?
What are those missing pieces? Are there other ways that you can look at this to fulfill that, need for them? So just a thought on that. I don't know the answer to that because depending on how it's structured and everything, but just to think on that too.
Paul: All right. This is a great question. And probably for not the reason, what would a lot of people obviously think because a lot of these programs are set up where it's like, oh, this is free. Oh, you can come in your first few members. This is great. I'm going to use this program or this product. And what they know. And behind the scenes, these programs it's called being sticky.
And what that means is the more content, the more information you put into these programs, it's harder for you to unwind yourself as a business, to get out of this platform, to go to another one.
So we, we had people, hundreds and hundreds of members in a platform, and it was really hard for us to like, it was a lot of work to get them off of an old WordPress platform and into a whole different platform. And we lost people along the way, just by default, because you put it in front of them, they had to make a new choice, a new decision. And that's why some of these programs, when we're new, you're like, Oh, this is really attractive. I can go here. We didn't realize the lockdown features technically are things that we really do need to serve properly when we're new.
So when we get in, we're like, Oh, this is free. Or this is minimal. And what happens? So what we do want to do is we want to be careful whenever you make a decision for your business, just don't look at it. Like, does this solve the problem right now, but will this solve the problem in the next couple stages? Because if it immediately creates a new pain for you and your growth, then you're perpetually behind. Like, you're, you're just not going to get ahead.
Now, the, the good bear, when we have these businesses, we want them to be profitable. You're putting time, energy effort into it. And you're doing this mainly as a nonprofit, right? This second, you know, because you're putting the time, energy and effort. And the 200 a year that you got from these founding members is basically paying for probably all the things that you've done. So in a way it's kind of like, you, you feel like you're giving up a lot of energy and a lot of time now use the feedback, get case studies. Those things will help you. That's where the value is to bring these initial members in.
Now, what I can say is, before you go into like your next launch, knowing that the next level is between the $29 solution and the 89. So when I did that, I took the difference between the two price points. Cause you're already paying the 29, no matter what, like that's there. Right? I looked at the difference and multiplied it for the entire year. Like, what does this really equate to attire year? And it's $720.
So for me, when I go, when I have a dilemma like this, what I look at is can I do a flash promotion? That'll drive enough, like three more extra members, five more extra members where I can actually just grab this money and do the improvement. And that I don't feel it like the 24 members or the 23 members is no different than serving the 20 members, you know? And it doesn't have to be a big launch. So that'd be a big promotion, but is there a flash sale or an opportunity where I can make this a cost neutral, that way I can upgrade the experience. It doesn't negatively impact me, but I can leverage and use money. That's not there right now in secure to build.
Sharon: Great idea. Thank you so much.
Paul: Yeah. So that's just one creative solution. if you think that way, then you can pre invest. The first day that we started "ADaptive Marketing Membership", we didn't have five copywriters on our team. What I did as I sat down and looked and I said, okay, we're going to start this out the gate, how much revenue do we need to pull in to be able to support that? So then I was able to purposely go out instead of pulling the money out of our pockets to pre invest, I knew the baseline number. I wanted to get the membership on our beta launch to get to in order to finance that. So then we could then go publicly and take it up. Even several levels from there.
Sharon: I knew that this was brand new, like had no idea how to do a membership. And I didn't find you guys until after I'd already launched, because I probably could have saved myself some errors, but thank you very much.
Paul: Oh, you're welcome. So just get creative, because you probably have people in your ecosystem that will come in very little, like no Facebook ads, no crazy launch stuff where you could bring in would make that difference for you.
Sharon: Do I charge them what I'm going to charge when I open it up or just the same as my founding members, or?
Paul: That's totally a hundred percent up to you.
Sharon: Thank you.
Paul: Because technically you're going to bring them in into a new experience because they're going to have the improve experience versus what the founding members received.
Sharon: Thanks so much.
Melissa: Excellent. Great question.