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The Pros and Cons Of A Paid Or Free Membership Site Model

Aug 21, 2008
Basically with the free site you will attract more members and have no recurring income but you can make money as you cross-sell to them. The paid membership will yield fewer members than the free one but you will have a recurring income through membership fees. The paid site will have a higher drop out rate than the free one and the paid site is more difficult to upsell to because they have already paid for content.

To understand fully which model is better for your particular membership site you have to analyze your content or service to see how valuable it is, know your market and know how well your backend products will sell. If you have weak backend products than the paid membership will be better. If you have a narrow niche than the free site will not work.

One solution is to use both models, the free and paid. You can entice the larger numbers to your membership site by offering a free 1st tier and then increase the content and tools for those who want to upgrade to the paid 2nd tier of membership. This way members can try out your site and get a feel for how valuable the content is and then when they learn to trust that what you have is consistent quality products or service they will be confident enough to pay for the 2nd tier of your membership site.

With a free membership site you can generate an income through ad revenue.

Look towards your closest competitors to see if they are paid or free. If you have a close competitor that is free and you come along, as a paid site unless you are offering superior content and can promote it well prospective members will probably opt for your competitors free membership site.

You will need to test your market to discover what your prospects respond better to the free model or the paid one.

Your content will ultimately be key in determining if you can successfully have a paid membership site. High quality content that is fresh and consistent will mean real value to your customers and they won't mind paying the monthly fee.

Most successful membership sites have found that the best solution seems to be having a limited free option for members with a quality package of goodies for paying members. Whether you will do best with a limit on how many free members or if you will have a time frame limit for the free membership depends on your market, your content and your upsell products as well as your competitors.
About the Author
Tom Williamsen is an membership site expert.
Find out more about his membership website ebook and script here: http://www.yourmembershipwebsite.com
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