Lowering membership fee
 

What are your thoughts on this? Have you done it? Why? Did it increase sales or decrease them cause of lower perceived value?

For me it increased sales and rebills, also lowered refunds and chargebacks.

1) Work out lifetime value of a member
2) Split test 3 price points
3) Wait 3 months
4) Calculate the price point that generates the most value over the lifetime of the customer

What was your initial monthly fee? What did you recude it to? At what point did you decide trying to reduce the fee? ;)

Though I'm an affiliate myself, there are a couple of sites I was about to join to grab some content, but when I've seen it's almost $30 I've had a change of heart. Not sure if surfers also have this way of thinking.

Interesting method -- could you elaborate on point 1?

In my personal experience, Lower perceived value = Less purchase made.

(I am talking about a site selling individual video downloads for a one time fee. Not a membership model)

The reason I ask, btw, is because we did a survey among (a lot of) non-paid members of our site. Over 65% answered they thought the price was too high.

I am aware that not-free is automatically too high. But I'm curious to see what a decrease in price will do but am anxious because the perceived value of a site/product may decrease with it.

Nevermind...

What was the sweet spot?

The problem is not the price champ. Add more value.

Rethink your business strategy.
:2 cents:

Definitely not a bad point. We did add 6 free nude cam & chat shows every day for premium members, no extra hidden fees. Was hoping that would set us apart from other amateur sites, since it does.

Adding more value is another way to look at it and something to look into, thanks.

Whereas 100% of the paid members did pay the asking price. I would say 65% is quite low for non-paid members, I would have expected a lot more of them to say the price was too high

This works a few times, when the tour shows the same as a higher priced site, the members area is the same as a higher priced site the myth explodes.

I tried $5 sites and never took it to it's full conclusion because of problems with the CMS. The idea was 10-20 scenes for $5. Based on one girl.

Conversions were good and they would buy site after site.

When we got the CMS we needed we dropped the idea because of the problem of traffic. Who will send traffic to a $5 site? Maybe now they would, maybe someone else can go with the idea.

Such as?

Clips 4 Sales maybe.

Agreed, but we get about 100 free member signups every day. Trust me, the paid members per day aren't close to that number ;)

Simply looking for ways to convert non-payers to payers.

Give them something 1,000 other sites aren't giving them. And I don't mean exclusive content. That means little to surfers, unless it's 10 years old.

6 free nude cam & chat shows every day is our extra feature. Pretty "uncommon" for amateur pay sites as far as I know. Or am I way off?

have a 'lifetime of a customer' that is 3 months is bad news :(

The life time value of a customer is the total revenue you earn from him. So work out the price of the membership, then whatever else you do to extract money from him:

- members' area upsells
- phone services
- email newsletter and the real estate on there
- cancelled member upsells
- other products (cam, dating, pills) etc etc

Without this information, you're totally shooting in the dark.

True enough, but in terms of a pricing experiment, if you cannot see the indications after 3 months as to which price point out of 9.99, 19.99 and 29.99 is gonna generate you the most cash, then something is wrong.

Obviously 5 years data would be much better, but I assumed the OP wanted a quick solution! I would put 3 months as the strict minimum this sort of split testing should be run.

Thanks a lot for the input DamianJ - this is gonna be the first thing on the to-do.

Anytime.

Would you suggest trying 1 price for 3 months straight or creating a script that chooses 1 of 3 price points on the sign up page, seperating them evenly among the views of the form? Not sure if that question made sense.

Lets take it in the other direction.

Say you start a site with regular, archived updates. After a few years the amount of content offered has quadrupled.

Doesn't seem right that one would charge the same amount for something that has grown exponentially.

So when is ok to raise the price of a membership?

I'd say it depends on your site's/product's reputation. If you're the awesome site that's easily worth the money and has members sign up like crazy because of that, why change anything?

This is something I find really interesting.

I was talking to a sales guy on a plane the other day and he was telling me how they ahd a great product (yeah all sales guys say that), point is ti was priced low and they kept getting the question "what is wrong with it?" - they upped the price by many multiples with the exact same product and that was when they started to sell a whole lot more of them.

Yeah, happens all the time.. Stupid human psychology I guess.. A 97$ piece of software sounds more promising than a 12$ one in most people's eyes.

Still, with porn, I have a feeling that the lower the price the more people get on board...

Give them more content then they could ever hope to use. Let them know that constantly, point out to them the new updates that are added daily. Make sure they know it will play anywhere on any of their inet devices and that you charge what you do to maintain that.


Don't get caught in the belief that you need to cut prices again and again, value should be reflected in price.

Cheap is usually that....cheap

Lets say the site sells memberships, has great retention of it's members, gets no complaints and has extremely low number of chargebacks.

Why keep charging the launch price point when you've quadrupled the content offered?

I'm selling beer by the six pack for $5 and they are selling great. Then I start selling beer by the case. I certainly wouldn't keep selling four six packs of beer for the same price I was selling one six pack.

Why wouldn't that apply to the website?

Simple math tells the truth, eh?

I like the idea of live shows. So long as the girls are doing it right it should work fine.

Ask all those "9 buck" sites how it worked out for them. Oh, right. Nobody's talking about them anymore. :2 cents:

True dat fine sire.

Yep. Its proving the opposite for me. Without going into absolute specifics, I have a micro niche fetish site.

Vids were $7.99 each (approx 25 mins long) and I sold them all day long... (For a few years, not just months) Eventually, sales slowed, so I decided to try a controlled experiment, and reduced all to $4.99 per vid.

Exact same site, same vids etc, but now at the 'under 5 dollar' price point, as opposed to the 'nearly 10' price point.

Sales are dire. Will be raising prices back to 7.99 soon...

Very syuprised with the result...

Try to lower the recurrent price and a bit higher the non-recurrent price For example: one month non-recurrent for 34.95 and recurrent 24.95.

Many surfers don't like the idea of a recurrent price, although they can cancel the subscription.

Raising our prices has had no visible effect on sales....

The problem is the method of selling, eg $30 for the first month when the client downloads all the material, why pay another $30 next month when the updates will only be a tiny fraction of the initial material ?

Most clients will buy the cheapest trail option then cancel ASAP.

We have found by dropping the recurring charge and offering cheap longer memberships (reflecting the number of films over the year) a lot of punters will choose the more expensive but longer membership.

It pays to be as honest as possible to make your clients your friends as I think Damian said.

I'd use website optimiser and pop in the three different landing pages there. The question made perfect sense!

@TGITC I'd love to split test your sales properly and throw in a curve ball. Like pricing it at 10cents (but I reckon your stuff doesn't have a wide enough appeal to make it work at cheap = loads of sales model). Perception about quality is certainly true of many products and it could well be your microniche stuff could sell at even more. I'd try putting them up to 9.99 and see if it makes a difference.