If you’re running a WooCommerce store, a membership site is a good idea. Now it can be a great idea!
WooCommerce membership sites
A year ago, I reviewed the WooCommerce Memberships extension by SkyVerge. The Memberships extension ($149) isn’t inexpensive (especially when added to the Subscriptions extension), but it is completely and totally worth it. It was one of the best extensions and plugins for membership sites out there – especially when combined with the Subscriptions extension from Prospress ($199).
But there was one key feature that I felt was missing. And it wasn’t just me. I collected the feedback from several people and companies who all wanted the same exact thing.
So I had a few conversations with the folks at SkyVerge and they were not only thankful for the feedback but excited to help make my hopes a reality.
That feature, which I’ll describe below, isn’t just available to me. It’s available to everyone and when you start using it, I think you’ll find that it puts the combined works of Automattic, SkyVerge and Prospress into a class all on its own.
My WooCommerce Site Series
This is part fourteen in a thirty part series, started this summer, on making your eCommerce stores much more awesome than they already are. If you’ve missed any of the other posts, here they are:
Payment Plans for membership sites
So let’s step into the challenge that many different internet marketers have.
When selling an information product, the value delivered is often concentrated towards the initialization of the transaction, but customers want to distribute their payment over time.
What does that mean?
As a seller of a course, membership site, or some other information product, I want to charge a good amount for the product. Because I believe there’s a lot of value in the information I’ve provided.
But once you, the buyer, buys it – you get that value all right then. At the initial transaction.
But to make the product available to you at a price you’re willing to pay, I need to break up payments into multiple smaller transactions. And here’s where the challenge arises.
Because if you use the monthly subscription approach, every following month gets you further and further away from the moment where value was delivered – and that means people stop feeling thankful and start feeling like maybe they don’t want to keep paying anymore (incremental regret).
So a monthly subscription doesn’t work. But the upfront one-time cost may not work if it’s too much.
So what you really want are payment plans.
But this wasn’t possible. The Subscriptions extension would let you charge $100 for 4 months. The Memberships extension would let you protect content for the duration of the subscription. But they were locked together.
What I wanted, and what others wanted was this:
New Information Product delivered as protected content
Single Payment up front: $499 (access for 1 year)
Two monthly payments: $300 (access for 1 year)
Three monthly payments: $250 (access for 1 year)
Four monthly payments: $225 (access for 1 year)
That’s what I wanted, and today that’s what you and I have access to. Payment plans.
Because what the SkyVerge folks did was detach the duration of the content protection (of the membership) from the subscription dynamics. And once that’s in place, you can create a variety of payment plans like the one above.
Why are payment plans important?
How many of you have ever bought a car by walking into the dealership with a bag of cash? I’m thinking that the answer is not many of you. Even if you’ve not done that, most folks haven’t written a single check. They’ve applied for credit or arranged with their bank in advance so that they can make a car purchase on a payment plan.
I’m not a financial advisor and I am not recommending that you apply for credit for anything, including your next car purchase. Just making that clear.
The reason that most people apply for credit is because normally a car purchase is expensive. Yet they want the new car right away.
When I was growing up there was this thing called Layaway. You went to the store. You made payments. And then one day after you’d made enough payments, you got to take the fancy suit or dress home.
Today I never see or hear anyone doing that anymore. They’re taking the item home with them right away and then paying for it over several months.
While I think the whole world was better the old way, that’s not the point. The point is that we’re dealing with two dynamics:
Inability (or lack of desire) to pay the entire amount up front
Because this is the world we live in, we normally see people selling digital products do one of three things:
Lower their product price so that people can pay up front
Create monthly payment plans and hope people don’t cancel
Create multi-payment installment plans that don’t go too long
It’s that third option that makes the most sense. Because along the way, you can charge an extra little bit for your financing.
If you do the math on the pricing list above you can see that this approach can be profitable while also aggregating the revenue towards the initial transaction so that people won’t still be paying you (and wondering if they should cancel) in month seven or eight.
So you get to deliver value immediately, and you don’t require all the money up front. And you even get to monetize the financing. All of that sounds like a great reason to give payment plans a try.