Should You Increase the Price Existing Members are Paying?
When you first launch a membership it's quite common to offer your initial members an amazing deal to entice them to join.
But a few years down the line when your membership has evolved, new content and features have been added, and your member base has grown, you might be regret being so generous.
Perhaps you've increased the price of your membership for new subscribers and now you're questioning whether it's fair your founding members continue to pay so little.
Maybe it's time to increase the price they're paying…
There are two main reasons why you might consider this.
Firstly is that with the addition of new content and features, your website is no doubt worth more today than what your initial members are paying.
Secondly, there's the question of whether or not you're being fair to your new members when they're paying more than your earlier ones for the exact same product.
It seems like a no brainer that you would increase the price for existing members.
In this article, I explain why this is actually a short-sighted approach.
1. Early Members Deserve a Lower Rate
Your early members financially backed you when your membership was in its early days.
They backed you when you had less to offer and were more of a risk.
Not only that but they’ve stayed with you since then.
They’ve helped you improve your membership with feedback, grow your community and have helped spread the word about your site.
Ultimately, your membership wouldn’t be where it is now without your founding members.
So, you owe it to them to honour their initial rate, however low it might be.
If they've stuck with you from day one, their loyalty should be rewarded not punished.
2. It’s Great for Member Retention
If someone locked in a no brainer deal when they joined, and they know you've put the price up two or three times since, they'll be aware that if they left and decided to come back in the future, they'd need to re-join at the higher rate.
This can be enough of a difference maker to incentivize a member to stick around even if they haven't used your site as much recently.
Whereas, someone paying your current rate doesn't have as much to lose.
So you'll typically find that retention is much higher amongst your earliest members.
Even if older members are paying half as much as new sign ups, but they stay twice as long, they make you exactly the same amount of money!
Their member lifetime value is identical!
This is why its important to take a longer term view rather than make a short-sighted decision.
3. It’s Actually Very Hard to Do
Most payment processing services don’t let you make these kinds of changes. So, it's difficult for you to raise the price of an existing subscription.
Think about it…
If it was easy for someone to change the payment terms of their subscribers, there'd be nothing stopping unscrupulous people from luring members into a $5 membership then whacking the price up to $500 without warning or permission.
The last thing payment providers want to do is make it easier for scammers to rip people off like this.
So in most cases, once a subscription is established most payment providers will not let you change the amount or frequency you're charging.
To get people to move to an increased payment rate, you’d need to manually cancel their subscriptions and persuade them to re-join at a higher rate.
It’s a hard sell, and you risk losing many of your existing members by doing this.
Still want to increase the price for your existing members?
If you've made it this far, taken my arguments on board and are still determined to increase the price your existing members pay, then there may be a better compromise.
Perhaps you feel justified in raising the price because your membership has drastically transformed to the point where it's essentially a whole different product.
Maybe it started as a pretty straight forward membership with a simple content library and a community, but it's since evolved into an intimate group coaching program with more access to you and all sorts of bells and whistles.
Instead of raising existing member prices, you might consider a tiered membership system.
This way, new members can select which membership level they want access to – the premium high-price tier or the standard lower priced option.
Giving your members this choice is a much better alternative than trying to force a price increase.
Hopefully you've now got a clear understanding of why increasing the price for your existing members is a little short-sighted.
Instead of lamenting the fact that you've got long term members paying you a little less, you should be celebrating and rewarding the fact they've stuck with you for so long.
Embracing this longer term perspective is a key element of a successful membership business.