Membership business models
Monday 6th October 2008
This weeks article takes a look at membership business models and the different approaches that can be taken when charging users for membership and to access your online content.
Recurring Fees
Firstly we have the obvious model, where users are charged a set fee for membership to access a product, for example on a monthly or annual basis. This method is good when the user will continue to use the product, for example if your content is the product then you will need to update your content regularly to keep users returning and paying for their membership. So for example, if you were selling access to a book then a monthly fee would not be suitable because once the user has read or downloaded the book they would no doubt discontinue payment - in this case, a one-time fee is more appropriate.
One Time Fees
If you are selling a product which is only used once, or for example when a user would only need to access the content once, then a one time fee may be more suitable, since if the user is unlikely to return to use the product or view the content then they will be unlikely to want to maintain regularly payments or membership.
Trial Memberships
Another model is the free trial, this is where we offer users a free period of membership, where they are given access to the product for a set period of time, free of charge or at a reduced cost. Then once the trial is over, the user is required to pay in order to continue accessing the content. This membership model is ideal if the product or service is one users are likely to build a reliance on, for example offering a trial of a product for building a web site, then once the user has built their web site around the product they need it to continue maintaining the site, and therefore must pay the fee after the membership trial. This membership model is also good for attracting customers and allowing them to try a product before committing to pay.
Conclusion
The model you choose all depends on the products you have and often it makes sense to use multiple models for different products, the key is to choose the right membership models which will attract the most customers to use your products and services.
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