Ray's Marketing Tip #1 - Visitor / Membership Conversion

[Ray]

Marketing Tip #1 - Visitor / Membership Conversion

Outline:
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1. Overview
2. Example of Need
3. Membership
- Free or Limited
- Standard
- Premium
4. Pricing
- Montly
- Semi-Annually
- Annually
5. Membership Conversion
- Incentives
- Price Mind Game
- Coupons
6. Conclusion
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1. Overview
In this tip, I will discuss how to convert a visitor to a member of your site and ultimately a subscriber of a product.

2. Example of Need
Service Providers having difficulty converting visitors into overall paying subscibers.

3. Membership
Always offer three levels of membership. This gives users to select the service option that better suites their needs.

Example

• "Free or Limited" - Limited Access and No Support. This gives the end user the opurtunity to gain more familiarity and or interest in the overall purpose of your website and business and test your products and services. When users become familiar with the product, they may choose to upgrade their service. You could also generate revenue from this method by using ads. It is likely at times that your site will generate more revenue combined from free users than Premium members.
  
• "Standard" - Full Access, Limit Support. This gives the user full access to your companies products. They can test, use at their need. If you are a web hosting provider, this could consist of a lower based plan.
  
• "Premium" Full Access and Priority Support. This gives the user full access to your companies services and full support. They can test and use your service at their need knowing that support is just right around the corner. If you are a webhosting provider, this cound consist of a feature rich plan.

4. Pricing
Always offer atleast 2-3 different pricing structures for your services at the minimum / maximum. For example, Montly, Semi-Annual, and Annually. This gives the user the ability to determine the terms of his contract with your company. Be sure to offer different pricing for each option, and when advertising / marketing the pricing throughout your site, always use "As Low as $x.xx/mo" with the highest term broken down into montly installments. Doing so will help retain your subscribers and depending on the pricing option selected, this will also lock your customer into a contact, helping you generating you revenue longer. The lower pricing being advertised attacts users to signup.

Example

• Monthly - $4.99 for 1 month ant $4.99/mo - Member can Leave after a Month of service. Least amount of revenue is generated unless the user decides to renew service on a monthly basis
• Semi Annually - $44.99 for 6 months at $4.16/mo - Member is locked in for 6 months. More revenue is generated than monthly service.
• Annually - $44.99 for 12 months at $3.74/mo - Member locked in for 12 months, maximum revenue generated. User is likely to continue service.

As of right now, there are 6 different ways to generate income via memberships contacts off of your website with pricing ranging from low to high cost. 2 Paying Membership Options with 3 differnt pricing stuctures = 6 different rate plans
5. Membership Conversion

• Offer Incentives - Offer users different incentives to upgrade their membership. Ie. For a limited time, get 2x sevice for the same price when you upgrade now! This will help promote your service.
  
• The Price Mind Game - My personal favorite. This is the best method to convert free or limited users to full paying customers. Market one solid price throughout yoursite. Banners / Popups / Everywhere. About two weeks after the free user signs up for your service, send him an email with a discounted price if he upgrades within the next 24 hours. After drilling the standard price into the users head, when he receives a one time offer for a lower price, he is more likely to upgrade then not. The two week period gives the user the ability to use your service and gain the experience needed to feel comfortable with it.
• Coupons - Send out coupons to your monthly subscribers giving them an even bigger discount at a yearly rate. Again, this is all about locking the customer into a longer contract. Remember, Time = Money

6. Conclusion
Above I discussed different methods of how to generate revenue by pricing and membership options. I hope that this article was helpful to you. If you need more information on these practices, feel free to contact me.

- Ray

 

[RicoShay]

Excellent stuff Ray.

The levels of pricing and various membership options for users is extremely useful. Especially after giving a small trail so that they get used to the site. Offering a time limited discount also reels them in.

One thing I've personally avoided is offering too many options and levels of membership. Its best to stick to 3 paid plans and maybe a trail/free plan. Anything more (in most cases) can become confusing for the user. What you want is for the user to feel he/she is getting the best deal... and to be happy for the duration of the membership. By offering too many plans it can sometimes make people wonder if they've taken the best option - often leading to downgrades.

 

[Ray]

Bump

 

[Peetr]

Ray - if you keep bumping things I’d look into getting glasses.

Of course 'look into getting' might not be the best phrase for something that has trouble seeing.