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Monetizing Through Multiple Tiers: Upsell Opportunities for Members

Introduction

The most lucrative membership sites monetize through multiple tiers. Offering upgraded packages, access levels and products gives you diverse revenue streams. More importantly, it maximizes lifetime value through upsells.

But how do you structure compelling membership tiers? And seamlessly guide members from entry-level plans to premium upgrades? This guide provides proven tier strategies and upsell tactics to monetize members over the entire customer lifecycle.

By mastering membership upsells, you can:

  • Appeal to diverse needs and budgets.
  • Increase conversion rates for first purchases.
  • Drive higher recurring revenue through upgrades.
  • Reward loyal, engaged members with exclusives.
  • Gather data to improve offers over time.

Let’s explore smart techniques for architecting membership tiers, positioning compelling upgrades, and automating the upsell process.

Designing Your Membership Tiers

The foundation is thoughtfully designing each tier and associated benefits. Follow these best practices when structuring packages:

Good-Better-Best Pricing

Include a range of pricing levels – entry-level, mid-tier, and premium. This gives clear stepping stones.

Explain Benefits Clearly

Articulate what added value justifies higher tiers to remove confusion. Show don’t just tell.

Limit Discount Options

Avoid coupons, bundles or lifetime deals that undermine future upsell potential.

Increase Perceived Value

Enhance higher tiers through elite branding, new releases first, limited quantities, etc.

Restrict Key Benefits

Gate your most desirable assets like certifications, tools, content or network access to top tiers.

Focus on Exclusivity

Give upper tiers a VIP experience through access, status and community.

Align Payment Terms

Annual payments are best for higher tiers for stable recurring revenue. Consider monthly for entry level.

Strategic Pricing Considerations

Pricing tiers effectively requires balancing multiple factors:

Value-Based Pricing

Set prices relative to the value being delivered at each tier. Quantify the ROI.

Competitor Benchmarking

Research pricing of competitors with similar tiered offerings to find alignment.

Cost Plus Pricing

Determine costs of delivering promised benefits, then add margin.

Volume Discounting

Offer scaled discounts to incentivize higher quantity purchases like annual plans.

Psychological Pricing

Leverage charm prices ending in 9 or 5 and round numbers we associate with quality.

Testing and Optimization

Gradually adjust tier pricing and packaging until you find revenue sweet spots.

Guide Members Along the Buying Journey

Members won’t automatically understand how to progress through tiers. Guide them subtly over time through the member lifecycle:

Tailored Onboarding

Provide education on available tiers and benefits during onboarding.

Drip Content Teasers

Release some premium content to entry tiers, then explain fuller access requires an upgrade.

Milestone Offers

When entry members hit engagement milestones, reach out with a special upsell offer.

Pre-Expiration Outreach

Before renewal, highlight benefits of upgrading tiers for the next membership term.

Post-Cancelation Winback

If members quit, make them tailored upsell offers to reactivate their account.

Surveys to Identify Needs

Survey members to better understand their evolving needs as input to improve tier alignment over time.

Promote Upgrades Through Marketing Automation

Automating promotions and outreach is essential for scalability. Use your email platform, CRM and website to:

Display Targeted Tier Content

Show promotional content for the next logical tier at strategic times.

Trigger Behavior-Based Emails

Send tier upgrade emails when members hit engagement milestones.

Retarget Site Visitors

Remarket upgrade offers to members browsing pricier tiers.

Multi-Channel Nurturing

Follow up phone or in-person upsell conversations with matching email and web messaging.

Create FOMO Around Benefits

Share testimonials and perks from upper tier members they are missing out on.

Use Promo Codes Strategically

Provide promo codes for next tier trials or discounts only when appropriate to avoid devaluing.

Optimize Your Checkout Flow

Many abandon carts happen at checkout. Removing friction here is key.

Offer Alternative Payment Options

Allow installment plans, additional payment methods like PayPal.

Reinforce Value

Share testimonials, ROI stats, and reminders of key benefits they gain.

Reduce Fields

Only require essential user details. Keep it simple.

Add Coupons at Checkout

If offering promo codes, allow them to be entered on payment page.

Confirm Before Processing

Show a review page summarizing their order before charging the card to avoid surprises.

Follow Up Abandoned Carts

Send customized emails re-pitching the benefits to win back those who left.

Conclusion

Monetizing through multiple tiers creates clear upsell pathways and unlocks member lifetime value. By designing compelling benefits, guiding members along the journey, automating promotions, and optimizing checkout, you can maximize recurring revenue. Structure your tiers strategically from the start, then refine them based on customer data over time.

By Dani Davis

Dani Davis is the pen name of the writer of this blog with more 15 years of constant experience in Content marketing and informatics product, e-commerce niche.

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