Calendar

As a member of our Customer Success team here at  We work closely with our customers to support them to grow their membership business. As we continue to engage with our customers more and assist them grow, I'll be sharing some key learnings and outcomes that we're witnessing when it comes to the overall strategy for membership.

Recently, a hot topic of conversation for our customers has been the increase in prices. Customers are asking inquiries:

• "How do I determine if I'm able to successfully increase the price without creating a major churn event?"
• "How much should I raise prices?"
• "When is the right moment to increase prices?"

There's not a universal solution for this. And without a detailed plan in place, there's a the risk of increasing prices. However I've been on the process with a few of our clients, I'm confident in saying there are clear signals that show when prices can increase without risk. These signals include:

A high percentage of people are taking annual plans as compared to. monthly plans

The memberships with a strong growth in the number of people who subscribe to annual plans over monthly plans have a significant price advantage. If memberships experience at 70 percent of the first-time customers purchasing an annual plan during a time period of at least 4 months, this is highly evidence of the membership being priced at an undervalued.

In these cases, a price increase of 10%-20% will likely be well-received by members.

The content formats continue to evolve.

Memberships that constantly increase their content offerings may increase prices frequently (i.e. each year). Take the case where member benefits have historically been newsletter-focused. Expansion of those benefits into different formats like videos, podcasts, and more could increase the benefits of members.

If it's content recycled or is completely fresh, expanding content can create a runway for ongoing cost increases that range from of 5%-10% every 12-18 months.

Operating in an under-served market

Memberships in unserved market segments can cost more. In these cases there is a lack of competition and there are a limited experts with the qualifications who can compete in the market.

A membership that offers in-depth analysis and cutting-edge research on a specific subject, is sure to attract prominent CEOs, thought-leaders as well as innovators within similar markets. It's a market that's eager to shell out a substantial amount to comprehend the effects on their businesses and clients. Memberships that find themselves serving such groups in these markets hold significant pricing power.

Statisticians and guidelines

Below are some general trends that we've observed during our research:

• Customers who have seen the biggest success with increasing prices slowly - never exceeding more than one price increase each twelve to 18 months.
• If a pricing strategy involves each year's price increase, 10 percent per year are accepted by customers.
• Memberships with annual renewals that haven't increased prices in the past (or for more than the period of 18 months) and maintain a retention rate minimum 75% are likely to increase prices as much as 20% with no negative impact.
• Results from customers show that the rate of price hikes is more relevant than the price increase itself in the event that the consumer is in the 10%-20% price increase range.

I hope this is helpful. I'll continue to share these learnings in the coming months as we progress ahead!