I’m in Stu McLaren’s FB group for membership site creators. Someone recently posted what he’s considering in offers for the subscription membership he is about to launch.
He was debating whether he should offer a monthly or annual subscription. If he offered monthly, wouldn’t people just leave after a month? He was worried about his bottom line – whether he was risking profitability by offering a short monthly term.
Busy, I paused on responding. Only to have my thoughts stay with me and become fodder for this note.
My first reaction was… what do your customers want?
Prices and packing of them ultimately are what the market will bear. Sure, you can offer whatever you want. The decision to buy it is with the customer to buy a monthly or annual subscription. So, either ask people or do a test launch.
My gut reaction was… You’re trying to solve a problem that hasn’t happened yet.
A rabbit hole a lot of business owners fall into when they are dealing with uncertainty or risk.
At this point, he doesn’t know if people will cancel after a month. It’s a scarcity mentality to be overly focused on the risk that people might leave. Yes, it is a risk. But if you haven’t been in business long enough to know if it will be an issue.
The full post hinted at a scarcity issue that comes up for content creators. They think that the value is in their content. They are often worried if you offer a short term, people will sign up, consume it all fast and then leave.
My next thought…. Offering ideal customers value month after month is what increases recurring revenue and reduces churn.
The value of a membership is in experience, rather than the content. The real gold is in the transformation they make and using the content. And in how the membership helps guide them to that transformation.
If they can’t get what they want easily and quickly, then that’s why more likely why they leave.
(They don’t have some devious plan to take all the content and run.)
If your customer is so unhappy that they leave after the first month (churn), they will be 12x unhappy if you charged them for 12 months. You are just putting off the eventuality of not getting a renewal.
The collective wisdom from people with existing memberships… A lot said they offer both.
People with memberships said they offer both and use contrast to show multiple offers differently. A month or two free when people pay for annual. Possibly contrast in features when they are pricing at different tiers of users.
A way to nudge the customer to make their choice your preferred subscription model.
Hmmm. I’m glad I kept my ramblings to myself. Lol. This advice is simple and clean.
What subscription models do you prefer to offer? Given the choice, what is your choice?
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