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The Value of Paid Membership

by | Apr 28, 2010 | Industry News & Trends

The argument has been around since the first club took its first member; and since the first product met its first consumer. With so many organizations trying to reinvent their offerings, “free” memberships have been experiencing a new-found surge in interest. The problem with free is that it costs you in other avenues of your organization.

Members Value What They Pay for. As an Econ major in college, one of my first classroom memories was my professor calculating how much my education was costing my parents down to the minute of classroom time. I still remember the number and her saying that if we wanted to waste her time and our time, that was fine but as Economics students we should always remember the amount of money associated with doing so. She put a monetary value on our education and thus grounded it in practical thought. Education was no longer a nebulous concept. The same can be said for membership. When there is a dollar amount associated with it, members are more likely to see your membership as a valued commodity, which leads into:

Members Feel Invested in a Paid Membership. Because of the financial outlay involved in a paid membership, members feel more need to “get their money’s worth.” This may mean they feel obligated to participate in events or use the discounts you’ve offered. But note that this feeling of guilt (in non-use, like those new-year purchased gym memberships) can easily erode into a reason not to renew for next year. To avoid this make sure the member knows exactly what benefits he or she is receiving. If possible, keep track of these encounters or activities in touch logs and use them to create personalized examples of their member benefits over the past year, in their renewal letter.

Materialism Rules. We, as a culture, almost feel apologetic when we are using a product that’s free, like it’s somehow more inferior to a paid product. We also make excuses for it and lessen our expectations around it, including customer service and personalized attention. Your association deserves a greater reputation than something people are a part of because they can’t afford the one they really want. Finding the right price point for membership may not be as black and white as one member cost. You may find that offerings a tiered-level of member pricing (and thus member benefits) allows you to reach the entire community without down-playing your value.  

What if you’ve already decided free is where you need to be? How can you do free without the negative connotations of giving yourself (and your funding base) away?

Member Gifts. Are you looking for a way to reach new constituents? Consider allowing your members (or a particular tier of members) to provide a free membership invitation to friends or colleagues. This allows the invitation to come from someone they trust (appearing special, as in invitation-only); allows you to reach someone you may not have otherwise approached; and gives the invitee an incentive (free) to try out your offerings. This type of membership works best for organizations that have multi-tiered membership levels as you don’t want current members to feel put-off that they had to pay and now you’re giving it away for free. 

Student Memberships. If your association has a new group of students or recent graduates in your industry, you may want to offer an automatic free membership invitation to them upon graduation or entering a specific school program. They can upgrade later to one of your paid memberships as their interest and finances grow. Not only does this membership help you in enticing new recruits, it also brings new ideas and prospective to your group. For greater idea shakeups, consider allowing these newbies a certain level of board interaction as well, even though they are part of a free membership. Deciding whether these memberships expire or not is up to you but if you decide that they don’t, you may have a group of young members who never become paid members. You will have to focus on giving them a reason to pay, such as additional content, networking opportunities or access to discounts.

Hook ‘em: Free Trial Memberships. This type of membership allows you to give interested parties the ability to take your organization for a test drive. Memberships of this type work best when you are confident of your offerings, provide great content/value and can take the time to welcome members personally. You do not want to make your free trial membership unlimited as a prospective member could spend the trial period accomplishing everything they want to do (from accessing/printing content to attending a particular members-only event) with your organization and then choose not to renew. Hold something out there for them. Dangle the proverbial carrot. 

As long as there are products and services available, the argument over free or paid membership and content will exist. Social networking has given us all a shove toward free content. We feel pressure to open everything up, but the push from social media is not a question of whether content should be free or paid; it’s more an argument of access. Content should be accessible, the focus is on offering not cost. Playing nice in today’s Web 2.0 world means creating hybrid offerings – free access to some things and paid for others. It is up to you to examine your association/organization and decide what works best for you and your audience. Keep in mind, even the social media master Chris Brogan (who makes tons of information available for free) offers content and networking at a price in his new social networking community Third Tribe. Part of his success in recruiting 2,000 members (at $47 a month) in less than thirty days has been his explanation that this is content and conversation (and access) to him that you cannot get elsewhere. It is unique and worth the money. So maybe the question you want to ask is not should our organizational memberships be free but are we (currently) worth the money. If not, going free isn’t going to change that and if you are (worth it) why would you consider devaluing that? Thoughts?


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