Setting up the monthly charge to a membership website

Hi there fellas...

I founded a fitness start up that offers a all video based online training program. The thing is that we dont want to sell our product in the traditional way. Instead, we want to offer access to the whole program charging a monthly price, in a recurring billing system. basically, what we want is to offer a great fitness program, for a extremely low price, making profit off the mass.

The dynamics of the niche that we'll operate (we are a fitness digital start up, but our product is tailor made for a very specific niche)
give us a organic costumer retention. The thing is that we want to increase even more this retention, giving people a massive discount after three months of membership. We want to charge $14,90 per month, for the first three months. After that, the monthly charge gets way down to $2,90.

Do you guys think that this strategy is validy? Do you think that this is a good ideia, getting prices THAT low?

Basically, what i need to know is if someone up here knows about a guide or something like that that teaches you how to set up a low membership monthly fee, that is sustentable. Or, at least, someone how could give me some insights about how to set up a low, but sustentable membership price, focusing on making profit off the mass

I love this forum! I'm new here but i already can see that you guys are awesome...

Cheers,

G.

Sounds like a good idea. I believe to the best of my knowledge, you can use the paypal ipn to create a monthly recurring bill.

Yep.The billing system that we'll use is paypal's recurring billing

Thank you for the compliment! But what i'm asking for is that if this strategy is good...sustentable!

Thanks!

I dont know if this style of billing is going to be a good idea. You will likely have more success make the first payment low so more people will sign up.

Interesting insight... but the price of 14,90 bucks per month, only for the fisrt 3 months..really scares people?

G.O.BNetwork said:

Interesting insight... but the price of 14,90 bucks per month, only for the fisrt 3 months..really scares people?

Click to expand...

Trust me you start low and work way up...
Start at $7 a month (7 is a good number)
Then work up

A discount for continuing a recurring membership is a good idea - the #1 problem for paysites is member retention. But that's WAY too much to discount it, IMO. Take off a few bucks if they renew after month 1 or 2.

Hi there!

First, i want to thank you for your response to my thread!

You said that the discount it's a good idea to increase retention, but that the discount that i'm wanting to give to my clients it's way too high.

So... consider this: my product is a fitness program, all video based, with a duration of 12 weeks. After that, people do not get anything more from us. Yeah, i know that it sounds stupid, but understand that the dynamic of the market that i'll be operating makes the production of other products hard. But, in other hand, the great thing is that the dynamic of my niche makes retention of clients, and the need for a longer relationship with us a natural thing.

Most of our clients will need our fitness program for way more than 3 months (12 weeks), but i want to set up a price that people REALLY think that the cost/benefit factor its good for the long run. When the price of ''2,90'', after three months, gets in my mind, i can see people jus dont giving a shit about paying this little ammount of cash - even forgetting about it because of the automated billing. But when i see ''4,90'', for exemple, i see a LOT of people giving a shit about this number - in other words: low retention.

So, consider this two factors, and after that, please answr the question below them:

1) Video based, fitness product that really solves a very unique - and expensive - problem, for a low price
2) The dynamic of my niche makes retention easy, but yet exposed to a lot of unsubscribes on the long run if we offer a low discount (because of the fact that we'll offer only one, static product)

What would be a good initial price for the monthly charge billed in the first 3 months? And what would be a good discount from that initial price, in order to increase even more retention? Please, give me numbers

Thank you in advance!

G.

BacklinkBasket said:

Trust me you start low and work way up...
Start at $7 a month (7 is a good number)
Then work up

Click to expand...

you can bring your money to my poker table anytime mate.
If you go low and increase the price people will bow out.
Now go high to start and reduce the price makes people feel they are
up keeping something they have already invested in and are more likely to continue.
I would price it at $49.97 for the first 3 months in one payment. The advantage being
you are attracting people who have money and in 3 months they would've forgotten
to cancel the direct debit.
$4.97 a month. Never undervalue yourself.
The second that is deducted from their account you got to hit them up with a free gift and an upsell.
Make them feel good about the decision they made to join you and then take some more money off them.
Because you can do it as a hobby or charity or you can do it to make money.

They've prepaid the best part of $13.32 a month for the last 3 months which they paid in advance. You've just deducted
$4.97 from their account therefore you know they have $8.35 to spend.

Are you going to let them keep it or are you going to get it?

You won't go wrong using amember.
http://www.amember.com/p/

Already answered your PM, but listen to oxonbeef, he knows what he's talking about. As I said, I'd be more likely to charge $29.95 per month and then drop it $5 or so, but whichever way you go, don't sell yourself short.

Great tips guys. Great tips.Thank you all!

Jus' a question: what would be free gifts and an upsells? Give me pratical exemples, please. Sorry... i'm noob when it comes to business terminology in english!

PS: i know what a free gift would be. How can i place it in the context of my business?

I use Digital Access Pass with PayPal. You can test a variety of options from per day, weekly, monthly, quarterly, six months or annually. After you have a number of subscribers, you can determine what options are selling the most. Then you can remove a pay plan that isn't working or keep it there to drive people to the options you want them to pay for. Hadn't thought of the free gift after they forgot to cancel. Sometimes they'll just file an unauthorized claim without communicating and I'll lose 3/4 of the time even when I've got their IPs or other evidence.

Why don't you create something that makes it worth for people to stay on your program even after 12 weeks? I don't know what your program includes already, but things like nutrion plans come to mind, like a personalized nutrition plan generator, weekly new recipes, new short training videos, new excercises...

Maybe an advanced version of your 12 week program people can sign up for after 12 weeks... There are tons of possibilities that are easy to implement without much cost or effort involved which makes a lot of people ant to stay longer than the initial 12 weeks and pay the low charge of $2.90/m.

If you basically offer them nothing new after 12 weeks, that would be a mistake imho.

PS: Or for example... Since it's a fitness program, cut a deal with a supplement manufacturer and offer your members supplements for a cheaper price with your own brand. Just as example, there is so much you can do to keep people on board, you just have to crunch the numbers.

How i deliver the updated stuff (recipes, nutritional plans, short training videos)? Do i need CMS in the member's area for it? I'm using ruby on rails for my start up!

I'm really new to the subscription business! Yep, noob

well yeah, I assumed you already got that covered, obviously you need something where people can log in, do something, to keep them interested.
If you only deliver a dvd and then charge people month after month you will get tons of charge backs, for sure.

I would suggest you re-think your whole business model once again. The point is you should put your domain on everything, your dvd's, meal/nutrition plans, supplements, or whatever you ship out. (even on printable material, like for example meal plans, you never know who else sees those so you can even get new customers for free)
After a customer purchases, redirect them straight to your members area where they can see immediately all the cool stuff they can do, maybe even add some sort of community feature so people can interact and help each other reach their goals. This will also keep them interested...

Don't just sell to your customer and then leave them alone, this is the worst thing you could possibly do.

And PS: The updated stuff will be obviously delivered in digital form (except of course if you sell supplements or any other tangible product, for that you will have to work with a manufacturer and a fulfilment company that manages your orders and returns)

Weekly recipes could be delivered via email for example, always state at the top of the email that the person receives this email because they are subscribed with your awesome company yada yada
Other things like a meal plan generator could be integrated in your members area, same goes for short training videos.

Just think what would be useful for your customers to reach their goals, and how can you help them, and what form of delivery would be the most convinient for them (In doubt, just ask them... in your community, what do you guys need/want etc)

And PSPS: Ruby is not a cms it's a programming language So maybe you use a cms based on Ruby?
I would suggest s2member pro for wordpress, it's exactly what you need, it's very powerful, cheap and easily customizable for any decent php delevoper. It supports a multitude of payment gateways and has powerful membership features like different member levels etc etc, also drip feeding, so for example you could show your 12th week customers a link to purchase your advanced program, or drip feed new training videos, recipes etc to keep them interested.

Wow...Thanks for your responses people.

Now... a question popped up right here!

Do i really need to build up a system on rails, or can i simply make a wordpress site with a Membership Plug In and contract a web designer to make things look exactly how i need them to look like? Please, consider that my product is all video based. Using word press could interfere negatively on the display of the product, looking things in a costumer experience perspective?

Again, i'm learning A LOT from you guys! Thank you all! This is a high quality debate right here ; )

G.

This would be irony? Yep, i think so....

Why shouldn't you be able to use wordpress? What would your customers care, most of your customers won't even know that it's wordpress?
Your question doesn't make sense to me really?

I build sites that you never thought would run on WP, even friends of me didn't realize it at first, the only thing that gives it away on the front-end would be the url's in the source code /wp-content/uploads/ etc... And with w3 total cache, an amazon account and some custom plugins your site will run smooth and fast even with millions of posts.

(I had a movie site with 5 million posts, pingdom.com loading time was under 1 second, built on wordpress)

Not a good price model at all. People always look at the present value of money and it would be next to impossible to convince them. Just imagine I start such a business, collect initial fees and put a message on the home page, " Dear members, based upon our TOS we've decided to shut down this business without giving any reason. Thanks & to your success, your personal trainer Mr. Xinhuwa". So people will always remain curious about why you are offering them membership fee structure in this strange way. Most of the visitors will not become your members because even free resources like Youtube are full of such stuff.