Start Free or Start Paid on Membership Websites?

By David Eedle |

There’s something of a debate raging in my household about the best way to start a membership web site. Do you have a subscription fee from day 1, or build a free list first to bulk up the numbers for a couple of months, then move to paid?

And no, the debate is not about the Niche Content Millionaire blog, it’s a little idea we’ve had tucked away in the closet for a while, but which we’re considering launching later this year.

Here are the options we’re toying with:

Start Paid

You charge from day one. If people want to access your content they must sign up and pay their membership.

Pros

Cash flow starts immediately
You set the tone for the site straightaway, people understand this is a paid subscription

Cons

You need enough content in the site to justify pitching a paid membership
You are probably not capturing a large amount of traffic

Start Paid Trial

Users hand over their credit card number, but you don’t bill for the first 30 days.

Pros

Up front commitment secured
You can pitch as a 30 day trial, no payment if they cancel in the 30 days

Cons

You can lose a bunch of people because they decide to cancel
Once people cancel, it’s much harder to go back to them later and pitch an offer

Start Free

You deliberately make everything free for a period of time – say three months – while you build up the site, its content and membership. You are up front with people and transparent about the plan, so they are aware a membership fee is coming later down the track.

Pros

With no financial commitment means people will sign up readily
You can build your list quickly to gain traffic and repeat visits

Cons

You need a really great conversion campaign when time comes to charge
Your list can wind up cluttered with a bunch of hangers on who you’ll never extract $$ from

When we started Arts Hub back in 2000, we commenced with a free membership. Not, I hasten to say, because we had every plan to charge, rather it was a free service we thought might be useful to a few people. What changed our minds were the thousands who signed up in the first few months. That gave us the impetus to put together the paid membership, which launched in November 2000. Within three months we’d sold $50,000 worth of memberships, and the rest, as they say, is history (we tell this whole story in detail in Niche Content Millionaire).

So the Start Free model worked for us – really well.

We have experiemented with 30 day credit card trials – most notably on our USA and UK sites, although with mixed results. I became a fan of these trials after researching their success on other membership sites. But I’m not sure we really nailed the whole process. We had to turn off straight membership sales while the 30 day trial offer was in place. We aqcuired thousands of new users, but a great many cancelled out. We did some number crunching and found that we would have made more money simply selling membershipas straight up, and spared ourselves the hassle of all the work to ensure the trials did convert to recurrent paid members.

We’re leaning towards the Start Free option for our new membership site. We know we’ve had good experience at running conversion campaigns over many years designed to turn free listers into paid members. A well designed competition and incentive program almost always does the trick.

Niche Content Millionaire is a downloadable eBook that tells you the true story how we made millions from subscription content and membership websites.

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