Mastering Membership Payment Plans: A Comprehensive Guide

So you’re offering or are thinking about offering a membership scheme for your organisation. But how are you going to run it? There are lots of different ways to run one, and if our experience has taught us anything, it’s that almost every organisation runs them in a unique way.

In this article, we'll delve into various membership payment plan types, highlighting their features, benefits, and considerations to help you choose the perfect plan for your organisation.

Who are your prospective members?

Before we start looking at membership payment plan types, let’s first ask this basic question. Who are your prospective members?

Are they individuals? Are they organisations? What are their interests and what drives them? These kinds of questions are essential when you’re picking which plan will best suit your needs.

If, for instance, we know our potential members are professional bodies looking to be part of an association, we might offer them something very different from students looking to sign up to support a cause they care about. The same goes for if you’re an organisation supporting a historical site  versus an organisation representing professional athletes.

You might have one clear set audience or you might have a diverse one with different categories, which might well cause you to want to diversify what you’ll offer in order to appeal to different groups. All of these considerations will directly impact your decisions about the duration and price of your membership, so be sure to be very aware of who you want signing up while designing your scheme!

What are you offering?

This might sound like an obvious question, but it’s vitally important to seriously consider this before launching your scheme. You need to be offering something that is of value to your members. What is their incentive to join up? Even in asking someone to fill in your membership form, you’re asking them to use some of their valuable time and give you personal details so be clear about what it is you’re offering and why it matters.

You might have a basic list of what you can offer - regular communications, greater access to your organisation, possibly also support or services. But what else could you provide? And how much effort or time might you have to spend providing them?

These fundamentals all need to be considered at the very start of your membership journey and it might be worth surveying members of your prospective audience if you’re not entirely sure which of your ideas best strike a chord with them.

Tiering your memberships

Now we’ve thought about what we’re offering on our membership payment plans, let’s discuss the topic of tiered membership.

There are lots of reasons you can do this, from offering lower tiers to be more flexible for your audience’s budget or getting your members to pay more for services that cost you more to run.

Here you’re really going to think about what’s on offer to your members as we’ve already mentioned. A lower tier membership might give access to your basic online resources, a newsletter and anything else you might consider core to what you do. 

At higher tiers you can offer a bit more. Perhaps sending out physical items such as a magazine, offering VIP events, greater access to any training courses you might run, possibly even discounts if you offer goods or access to some kind of venue or service.

Add-ons and experimentation

You can even experiment a bit with tiered memberships and do membership add-ons for specific offerings which might be popular but you don’t want to include at lower tiers.

The great thing about tiered memberships is that you’re also setting yourself up for increasing future revenue with the possibility of encouraging upgrades through targeted communications, based on what you learn from usage patterns, and building more engagement with a member as they get to know your organisation over the years. 

If, for instance, you find from a survey that the main reason members upgrade is that they are interested in greater access to your training courses, you might think to promote them more to lower membership tier members and possibly even expand your range.

Advantages

• Appeals to broader audiences with different preferences
• Natural upselling to higher tiers possible
• Can create flexible add-ons to tiers

Considerations

• Need to make sure different tiers have clear value differences
• Ensure you clearly communicate your tiering system
• Monitor usage patterns so you can further optimise

Free plans

If your organisation raises money through fundraising and/or grants then an entirely free scheme can be a great way to encourage greater engagement from your supporters by creating an easy to overcome barrier where they can give you their details in exchange for your most valuable content or services. You can then create stronger mailing lists and get to understand your target audience better.

A purely free membership plan can be an effective marketing and engagement tool for charities and nonprofits looking to further their mission, but who already have secure funding. It’s also worth noting here that as already mentioned, just because your scheme is free, doesn’t mean you should forget about offering a good value proposition!

You can even offer a more limited free offer - possibly free membership for the first 6 months to entice people in or a free option to students or those under 18. They’re less likely to have the money to support you directly anyway, so you might see it as an investment in the future to get them interested now!

Advantages

• No barrier to entry encourages engagement
• Effective marketing scheme

Considerations

• Won’t self fund
• No financial commitment can mean lower engagement over time

Fixed vs rolling memberships

So now we’ve looked at free plans - how might paid plans work? There are basically two different models (with various offshoots) you can work with here. Rolling memberships and fixed memberships.

Rolling memberships

A rolling membership is something you’re probably very familiar with. Common with gyms or subscription services, the idea here is that you sign up for a set period of time for a fixed fee after which the membership will renew for the next period of time. Members can cancel their membership for the next period if they so wish before a date which will usually be defined in their membership agreement.

How long this period is can obviously vary. The three most common lengths are monthly, quarterly and yearly. Which one of these time periods you go for will depend on what it is you do and probably how involved the membership application process is. If it’s as simple as a form and a quick payment then monthly makes more sense than if you’ve got an involved process with reviews required.

Advantages

• High flexibility for members
• A steady cash flow throughout the year
• Reduced churn and spread out renewals 

Considerations

• Can be complex to administer without good IT infrastructure
• Comms need to be more personalised for individual renewal dates
• Makes revenue forecasting a little trickier

Fixed memberships

Fixed memberships on the other hand have a set start and end date. You might, for instance, have a membership duration that starts on 1st January and ends on 31st December. After this period, every member has to renew at the same time.

There are different ways to handle enrolment here - you can either have  one set period of the year which is the only time new members can sign up OR you can operate a pro-rata system where they can sign up at any time and pay a reduced rate to reflect the right amount of time before the next full year’s renewal. Without a system like CiviPlus which can handle the calculations for you, this can become tricky if multiple members join mid-way throughout the year. Being able to accept pro-rated members can be very useful in ensuring that you don’t miss the chance to sign them up and hope they retain interest until your next enrolment period.

Generally this membership period will be for 6 months, a year or more, as renewing everyone simultaneously can become quite a task to keep on top of. Like rolling memberships, fixed memberships can still be set to auto-renew, which can make this process much easier to handle!

Advantages

• Revenue very predictable and easier to forecast
• Easy to structure shared communications
• Have membership cohorts to inspire community

‍Considerations

• Can be inflexible without pro-rata
• Might experience higher churn all at once
• Need to carefully plan out comms strategies

Which is better?

As you might expect, whether a rolling or fixed membership type works better for your organisation depends on its mission and what your members might expect.

If you have a very selective group of members which you don’t expect to grow much over a year, then fixed memberships can be ideal with their revenue predictability and the opportunity to plan out more universal communications. This can be really useful for organisations that have a clear yearly cycle, such as academic organisations or if there is a big annual kick off conference or event that drives membership sign up. 

On the other hand, if you expect a constant stream of new members, it’s probably best not to limit yourself to a fixed period as you might miss out on opportunities.

Ultimately it can also come down to your administrative capacity. Rolling memberships require constant attention, whereas fixed memberships instead have incredibly busy periods around renewal but normally require less involvement. Both can prove challenging to your teams in different ways and it’s definitely worth thinking about investing in a system which will make communications and keeping track of different renewals easier for them to handle.

Conclusion

There are a lot of different options for how you can configure your membership payment plans and ultimately it will come down to you weighing the pros and cons of each plan and which is right for you.

Implementing your payment plan will be made substantially easier if you have a digital platform that can help you organise any different tiers, pro-rata calculations, and the all important renewal communications and payment tracking. That’s where CiviPlus comes in - it’s designed to do all of that and so much more!

If you’re interested in finding out how CiviPlus could help you create membership plans, then get in touch with us today, we’d be happy to discuss what it can do!

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