How to Get Membership Pricing Right
Ever wondered how to nail membership pricing? Think about “The Price is Right” game show. It’s been on for half a century because it resonates with us. Prices matter, but they can be tricky to pin down. Getting them right can lead to big rewards.
Likewise, association pricing often feels like a guessing game. How do you even determine the prices of your offerings? Some things might have always been priced a certain way, and you might not know why or who decided. If you’re like most, you rely on your best judgment without much further thought.
But here’s the thing: nailing your pricing strategy comes with a prize. And it’s not just about money. Associations have a “Triple Bottom Line” to consider: Money, Member Value, and Mission.
Let’s delve into each of these aspects:
1. Money: Researching Membership Pricing
The value of your offerings is determined by how much money they generate. This means subtracting your costs from the price. So, start by asking yourself: are we charging enough for our memberships? Is there room to increase prices? Take a look at your competitors and similar organizations. What are they charging? Also, consider surveying your members to find out how much they are willing to pay. You might be surprised to discover that they are willing to pay more than you think.
Now, let’s talk about your expenses. Do you really know how much it costs to produce your offerings? If you’re like many associations, you may not have a clear idea. You might know the cost of organizing an event, but what about the true cost of training, content, or even membership itself? It can be challenging to figure out, but it’s crucial that you do. When organizations conduct an honest cost analysis, they often realize they’re losing money on things they hadn’t considered.
2. Member Value: Measuring Member Value
3. Mission Aligning Membership And Mission
When it comes to membership pricing, it’s important to consider what you offer in relation to your mission. Some things you provide may not directly benefit your members, but rather serve the overall purpose of your organization. Take, for instance, your content. If raising public awareness aligns with your mission, you probably offer a majority of your content for free. Evaluating the impact of your mission objectively is also crucial. You can assess alignment with your strategy, the ability to bring about change, and other relevant factors. It goes without saying that certain aspects are absolutely mission-critical, and it’s vital to assign them appropriate value.
The ultimate goal for your association’s pricing strategy is to maximize at least one of the three bottom lines. It’s acceptable if a product or service doesn’t generate profit, as long as you intentionally choose to provide it at a loss. Consider a database that offers immense value to your members, even if they couldn’t afford it otherwise. However, it’s not acceptable to incur losses unintentionally or on offerings that don’t directly benefit your members or advance your mission. When it comes to membership pricing, striking a balance is key.
The Membership Price Is right
To learn more about membership pricing strategy see You’ve Got the Wrong Affinity Products: Value Comes First and Name Your Price: The Challenges of Association Pricing