Should I charge annual Subscription Fees? Or monthly?

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One of the most common questions I get about membership or subscription sites relates to not the price to charge but the interval to use for charging. Should someone charge monthly? Or should they charge annually?

Of course, the logical answer is that it depends.

But that makes for a pretty short and boring article. Plus, given the number of posts on membership sites I’ve written, I’m pretty sure you know by now that I don’t lack opinions.

So I’m going to give you my opinion. And then I’m going to explain it, if you want to hang around for that.

I recommend annual subscription fees

My recommendation is that you charge annually. But before I get into it, let me highlight some things you may not know.

Did you know the average churn (or attrition) on subscription websites is between 4–6 months?

Did you know the average monthly fee across tons of surveyed membership sites was under $20?

Did you know that many sites spend up to 2 months of fees to win/convert prospects to customers (including affiliate payouts)?

Think about all that.

I know. We all think we’ll charge $50/month or more, and that people will come naturally, and that they’ll stay for a year.

The differences between our hopes and the average reality can be a difference of more than 90% of projected revenue.

It’s one more reason why I’ll repeat that hope is a wonderful thing to have, but that hope is not a strategy.

Given all that, it’s no surprise that I recommend annual subscription fees.

It gives you a chance to demonstrate value before someone has another buying decision presented to them.

Another dynamic relates to the rate at which you must keep adding value.

Monthly charges drive the “What have you don’t for me lately?” question. Annual subscriptions still require great content but at a slightly less frenetic pace.

Lastly, and maybe my favorite reason, is that you can then charge people even more money – aligned with their specific interests.

Here’s a simple example

My wife and I, at one point, wanted to have a Costco membership. For the life of me, I can’t recall why. We don’t have it anymore. And it’s not like we suddenly stopped needing 50 lb canisters of mayonnaise. But that’s all besides the point.

Our membership gave us access to buy more stuff. The cost yearly was low so we didn’t really think about it after paying it.

But once we were inside, we could buy fruit roll-ups by the foot while others bought cameras or clothes.

Imagine your subscription fees were similar. A low cost annual price, with several other products (reports, eBooks, one-time video webinar replays) available for purchase, but only for members.

You’ll have to do the math yourself, but I think you’ll find that in many cases my recommendation will work for you as well.

About Chris Lema

Chris Lema has been working with WordPress since 2005. Over the years he's been a blogger, a speaker at WordCamps, a coach for WordPress product companies, and the founder of the conference for WordPress business owners, called CaboPress. Today he's the VP of Products at Liquid Web, where he manages the world's first managed platform for WooCommerce stores.

Chris Lema

Chris Lema has been working with WordPress since 2005. Over the years he's been a blogger, a speaker at WordCamps, a coach for WordPress product companies, and the founder of the conference for WordPress business owners, called CaboPress. Today he's the VP of Products at Liquid Web, where he manages the world's first managed platform for WooCommerce stores.

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