Should You Be Offering Tiered Membership Levels?

Offering tiered memberships allows you to set different levels of access to your members. One of the most critical aspects of running a membership website is how you price your memberships. And among the most popular membership sites in the world, the tiered membership model is by far the most popular choice.

In this guide, we’ll look at the details of what a tiered membership model can do for your membership business. By the end, you’ll be able to make an educated decision on the pricing model that’ll work best for you.

Is a tiered membership model the right pricing model for your site? You may have noticed tiered memberships being widely used in the industry. It’s because of the flexibility it provides to you and to your users.

Pricing memberships is a lot different than pricing tangible physical or digital products. When you’re setting a membership pricing scale, you don’t need to worry about covering the cost of a product and marking it up for profit. In fact, membership pricing is more about marketing psychology than anything else.

To effectively determine the pricing structure of your membership site, you need to know:

• What people are willing to pay to access you exclusive, members-only content
• How to incorporate the different elements of your membership offerings into a structure that makes sense to your customers and yourself
• Ways to make your most lucrative tiered membership offer a “no-brainer” to most users

Of course, you also need to consider the niche you operate in, the type (and quality) of content you plan on producing, and the products you’ll offer. But if you plan on operating a successful membership site of any kind, there are some highly compelling reasons why a tiered membership model could be your best option.

A Tiered Membership Model Allows You To Capitalize Off of Your Most Loyal Members

If you’re already operating a membership site, you know that a percentage of your members are loyal to you through thick and thin. These people are incredibly active on your site, while consuming all of your content as soon as you publish it.

They engage with other members and bring in new people to your site because they’re so satisfied with the material you provide to them.

Your most loyal members are the exact people who would most benefit from a tiered membership model. In fact, because they’re so active and always looking for new content from you, these people would jump at the chance to have increased access to exclusive, premium content.

And that not only benefits them, but it benefits you.

As you can see, by implementing a tiered membership model, it’s possible to increase your bottom line by offering loyal members a higher-priced, more exclusive experience on your membership site.

If you have a significant (or even small and highly dedicated) portion of your members who seem to always plow through your new content before everyone else, you’re missing out on some major opportunities for growth and increased member satisfaction.

Conversely, perhaps you’ve noticed that a portion of your paid audience has a much higher degree of engagement than the average member. These people are also looking for new ways to become a more exclusive part of what you’re doing.

By offering them an upgraded membership option, you give them what they want while also generating new revenue for yourself.

Tiers Offer Members Unique Ways To Experience Your Content

Not only do membership tiers allow for varying use cases and commitment levels; they also give people different ways to experience your content. 

Let’s look at an example of how this works.

Say that you live in a world where you run a photography course membership website. There’s a good chance that a percentage of your members are paid professionals or people that hope to become professionals.

However, you’ll also have paid members who have no desire to make a living with photography. They simply enjoy hobby photography and want to become better at it.

Perhaps your professional members are looking for premium content and site features that will help them further develop advanced photography skills and business strategies. But your hobbyist members are there to learn beginner-to-intermediate strategies that will help them achieve more casual goals.

By creating a tiered membership model, you can create different plans of action for each unique member’s needs. Every level of your tiered membership model will offer different levels of content access, or completely different content altogether.

For your true super-fans or the people who are really serious about progressing through your content, a top-tier membership is more than just a small bonus. In reality, it can give them direct access to ultra-valuable material for self-improvement, career development, and an entirely new way of life.

The Psychology of the Anchor Offer

Generally speaking, marketing and product pricing are all about psychology. The goal is to build as much perceived value as possible, without pricing people out of making a purchase.

And when it comes to membership sites, an anchor offer has been proven to trigger a positive psychological response and drive consumer action.

But how does an anchor offer work?

An anchor offer usually refers to a higher-priced tier – an exclusive offer that “anchors” your customer’s attention and expectations to a higher price point. Your anchor offer should also offer customers the most value, making it the most attractive and sought-after offer.

The psychology of the anchor offer has been proven to boost conversions for lower-priced tiers, all while encouraging customers to get the most value for their money with the top-tier membership. 

Of course, to take advantage of the psychology of the anchor offer, you first need to have a tiered membership model to present to your customers.

How Many Tiers Should a Tiered Membership Model Employ?

You’ve probably noticed that three or four tiers are the most common strategy that most tiered memberships employ. Typically, this will include:

• The top-tier anchor offer (most expensive, with the most exclusive content)
• The mid-range tier (most popular, with a ton of exclusive content)
• The low-range tier (limited exclusive content, sometimes offered for free)

In most cases, your low-range tier (if not offered for free) should be presented to customers at about 20% of the cost of your top-tier anchor offer. A mid-range tier should be in the range of 50% of the cost of your top-tier offer.

It would look something like this:

• Professional Plan $100 per year
• Standard Plan $50 per year
• Introductory Plan $20 per year

There are membership sites that offer a wide range of monthly plans available at different pricing tiers, designed specifically for either individuals, groups, or businesses. Often, customers have the option to save money by paying annually, instead of every month. 

Types of Content in a Tiered Membership Model

A tiered membership pricing plan can work for any type of content you produce and you need to consider those tiers while you develop your content strategy. However, you’ll notice throughout the membership market that specific niches seem to follow their own trends.

For example, downloadable products are very well-suited for single-tiered memberships. This is especially true for sites that give their members a specific number of digital downloads (or download credits) every month.

This approach gives members the freedom to consume content in the unique way that they choose, while also restricting content consumption to only the content you deem acceptable for the price point you’ve set.

Many membership sites that offer downloadable products use a download “credit system.” Some of the most popular types of media to use a download credit system model with include:

• Stock photos
• Graphics
• Audio files
• Creative project files
• Documents
• Other digital assets 

It’s common to see these types of sites assigning different numbers of download credits to specific items to account for the appropriate weight value of each item. Then there are stock sites like Shutterstock that work on a combined model that incorporates membership tiers along with bundle packages.

Some membership sites have several membership options, giving people access to different numbers of download credits per month at different price points. How you structure your membership pricing model really all depends on:

• What your content is worth
• How you think your members will want to consume your content
• What restrictions you need to impose in order to maximize your membership revenue and avoid member churn

Tiered memberships can be effective if you want to offer different levels of access, or access to specific categories of content or downloadable products. 

Perhaps you exclusively publish only web-based content, such as posts, articles, podcasts, and videos. And maybe you want to offer membership tiers that combine them in different ways. Or, you may want to reserve your most impactful content for only your premium members.

For web applications and SaaS (software as a service) products, flat-fee memberships are the most common. The standard Netflix subscription model is a well-recognized example of this. In a flat-fee membership, your users get access to everything you have to offer, all for one flat yearly (or monthly) fee. 

However, some SaaS membership sites, such as Netflix competitor Hulu, offer different tiers with additional member benefits. In fact, Hulu offers more of a traditional tiered membership model, with their low-budget option, mid-range (advertisement-free) option, and the Live TV option that goes beyond what Netflix offers by giving customers access to traditional cable TV right within the Hulu app.

Extras and Upselling

Do you plan on offering one-on-one coaching as part of your membership site? Do you want to produce extra content and downloadable materials that won’t be a part of your basic site membership?

What about offering live training and webinars for your members?

By creating tiered memberships, you build the perfect structure to offer different levels of access to products, services, and content.

Rather than making a one-time purchase from your site, members are able to sign up for higher membership levels that give them access to your extras whenever they want to access them.

Of course, if you prefer, you may choose to offer only a single-tier membership and reserve your extras and upsells for individual purposes.

As you can see, the level of flexibility you have with how you price your content and memberships is almost limitless. This is why you need to use a tool that allows you to run your membership site exactly as you choose, without being blocked or restricted by technology.

For WordPress membership site owners, the best tool to use for managing every aspect of your membership site is Restrict Content Pro. This is a WordPress membership plugin that is the most extensible solution for WordPress users.

If you haven’t taken a look at Restrict Content Pro yet, there’s no better time than now.

Segmenting Members

If you want to tailor your marketing and communications to specific segments of your audience, tiered memberships are the way to go. Although you certainly are able to segment your member base by filtering user activity and purchase/download history, tiered memberships make segment-specific marketing almost automatic.

Let’s say you want to direct some marketing messages toward your most active and engaged users. With tiered memberships, you could focus these efforts on your professional level members, while offering mid-level members a completely different message. 

If you want your standard or mid-level members to upgrade to the professional level, you could tempt them with some special offers, such as a discounted premium membership or immediate access to your newest ebook.

Other Pricing Structures To Consider

If you aren’t sure about tiered memberships, or you’re curious about other pricing methods that are used for membership sites, there are several other pricing options to consider. Again, the pricing model you ultimately decide to go with will depend largely on your niche, products, and how you choose to conduct business.

1. The Single-Tier Membership

Single-tier memberships are as straightforward as they get. Basically, they either offer unlimited access to every piece of content on a membership site, or they include a predetermined amount of content per year (or month).

Admittedly, single-tier memberships are a little easier on the accounting and organization front, since there’s only one tier to manage. And they also can make things cleaner and simpler overall. After all, a single-tier membership doesn’t require a lot of decision-making from new customers: Either they join your site or don’t.

If you’re just beginning your membership site, you may prefer starting out with a single-tier membership. While single-tier memberships don’t allow you to take advantage of the psychology of an anchor offer, you can always expand your site to include membership tiers at a later time.

2. The Metered Billing Membership

Do you want to charge your members based on how much they use, download, or consume? Metered billing does exactly that.

Often, sites that use the metered billing model will charge a minimum monthly subscription fee, and members pay an additional amount on top of that, based on their own usage. Payment gateways like PayPal and Stripe are some of the best examples of this; as the store owner, you pay a fee for each transaction or successful card charge.

3. The VIP Membership

Some sites charge a membership fee in order to access exclusive deals. Commonly referred to as VIP memberships, members get access to goods and services at deep discounts in exchange for a recurring monthly, yearly, or one-time payment.

This is a popular model for certain services, as well as physical goods such as:

• Clothing
• Accessories
• Electronics
• Beauty products

A few well-known examples of VIP memberships are the ones offered by Costco and Sam’s Club.

But VIP memberships can also be used for digital products and content. You could even decide to offer VIP memberships alongside another pricing model.

Should You Be Offering Tiered Memberships? Ultimately, It’s Up To You

Regardless of what the rest of the membership site industry is doing, you are in charge of your own business. And you get to decide what makes the most sense for you and your members.

The purpose of this guide is to give you the information and tools that will help you come to the best conclusion for your business. But if you’re still not sure which pricing model is best for you, consider researching your competitors to see what they are doing.

Remember: Tiered memberships can empower your members with a more customized experience that’s tailored to specific levels of skill, experience, and commitment. If it’s appropriate for your type of products, content, and brand, then a tiered membership model is a great way to go.

But even if you decide not to employ a tiered model right now, you can always add membership tiers later.

When you hit the sweet spot for your pricing structure, your membership numbers will let you know. Until then, consider tired memberships as one of the best ways to build your membership site business.