Membership programs have many pricing models and must be tested to determine the right price for your business and clientele. However, pricing your lower membership levels inexpensively is a smart tactic. Your goal should be to convert your customers into members so that theyll begin to feel an affinity to your business.

After your customers have joined, then you can begin to start the up-sell process by providing tempting offers to move up the membership ladder. Look at your first membership level as a "loss-leader."

For example, it only costs $10 a year to be a member of Sams Club. Its free to be a member of Hollywood Video (video chain store). It costs $25 annually to be a member of my local library. The low membership fees serve to attract people into the program, but because its not completely free, customers will place a value on their membership and use it.

Renewals: The Key to Membership Program Success

Its one thing to package your services into a membership program and sell it, but sustaining your subscriber base by getting customers to renew is another. If you dont provide value and keep your promises during your customers membership, it will be difficult to get them to renew.

To be honest, even if you have kept your promise and provided value it can be difficult to get people to renew. Magazines consistently have this problem. In fact, companies have been established with the sole purpose to help other companies to maintain a high renewal rate.

The key to getting your members to renew is to provide value beyond what was promised and to offer incentives to renew. The incentives should have a low cost to you and a high perceived value from your member. For instance, suppose you offer a paid newsletter service. Your renewal offer might include several free teleseminars or a free discount coupons from a popular vendor that advertises in your newsletter.

Another option to improve your renewal rate is to sell renewals upfront by offering multiple period memberships at a discounted price. For instance, when you offer a one- year VIP membership at your restaurant, up-sell the offer with a second year at a 35% discount.

Locking your customers into multiple period membership programs should be an important goal. Because your customer was willing to buy the first period, theyll be inclined to consider multiple yearsif the offer is right. A powerful hidden benefit of locking your customer into a long-term membership program is that youll also be locking out your competition!

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