Flexible Membership Tiers: Why They Matter for Scaling Revenue

Customers fall into different budget categories. Pricing membership plans rigidly is like putting a limit on your target audience. Such plans don’t speak to the majority, restricting conversions to only those who can afford. Flexible membership tiers eliminate this rigidity.

They offer something for everyone, catering to multiple price points and customer demands. Moreover, they let customers change their membership tiers whenever they feel like it. This encourages membership entry for customers with differing spending limits.

However, it isn’t easy to manage different membership tiers and their billing manually. That’s where the need for membership management software arises. Such software automates your members’ entire lifecycles. Let’s dive into the details now.

What are Flexible Membership Tiers?

Flexible membership tiers offer customers value across different price points. They go against the one-size-fits-all model that supports one plan with a fixed price. To understand flexible tiers better, it is necessary to first understand what constitutes a rigid plan.

A rigid plan speaks to a limited audience only—the audience that aligns with its price. It offers a comprehensive set of features for a high price. That makes it unsuitable for members who don’t require all the features it offers. Such plans also don’t appeal to customers looking for more budget-friendly solutions.

But rigid plans don’t always mean only the singular one-size-fits-all plans sold by businesses. Tiered plans can be rigid too. Tiers can feel rigid if customers are locked into them. Meaning, when customers cannot easily move between different plans, and are stuck into any one.

In contrast, flexible tiers allow frictionless switches. They also offer multiple feature/service packs, such as Basic, Advanced and Premium. Each pack is assigned a price compatible with it. This diverse plan structure addresses diverse consumer needs. It allows easy and affordable membership entry to most of the customers.

As these tiers widen the target audience, they automatically enhance the conversion rate too.

Why Memberships Need Flexible Tiers

There are many reasons for why flexible tiers are a need for memberships today, and not just a nice-to-have. The major ones are as follows:

For attracting a wider audience

One way to increase sign ups is by considering the financial standing and requirements of your target audience, and then setting up plans accordingly. It is a great practice to have special plans for special customer segments as well, such as for students and recent graduates.

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These plans offer services at lower than regular prices, so that non-employed customers can benefit from them too.

Flexible tiers are the membership’s way of showing that it cares about its audience’s needs, and that it embraces member diversity. The more diverse kinds of plans it offers, the more its chances of onboarding new members.

For boosting member engagement

Member engagement is boosted by giving members more opportunities to interact with your services. Recurring payments are essential touchpoints in this regard. They act as friendly reminders of customers’ ongoing membership, so that they don’t become inactive.

Plan upgrades/downgrades are important touchpoints as well. These options offer members the freedom to move between plans, and adjust them as their needs evolve. Members requiring more services can switch to higher tiers, generating more revenue for the business in the process.

For encouraging retention/discouraging cancellation

Members are likely to cancel when locked in rigid plans. However, with flexible membership tiers, there are solutions other than cancellation that they can be offered. To begin with, customers can downgrade a plan.

If they feel like they don’t need some of the services being offered by their current plan, of course they can make the switch. They don’t necessarily have to opt for cancellation to save money. Instead, they can just adjust their plan, and their bill.

Moreover, members can also be encouraged to pause their memberships for a while. In case they are currently finding their payments too hard to manage, or they simply don’t need the services for the time being. Pauses halt billing cycles, but retain members. Members can resume their membership later when their budget allows them.

How to Make Your Membership Tiers More Flexible?

Want to know whether your membership tiers are flexible enough or not? Check if you offer these vital features:

Tier-based pricing and perks

Each of your tier must be priced differently, and must include value that justifies its price. The price range depends upon the audience you’re targeting. Memberships accepting individual members vs business members will naturally price their plans differently.

Each plan’s value must correspond with its charge. For instance, a gym membership offers a basic plan that only includes access to the gym’s space and exercise equipment. Its advanced plan includes coaching sessions as well. And its premium tier includes diet plans, free protein drinks, and workout gear on top of the other services.

All services provided by a plan must be listed out clearly, so customers can make informed choices.

Trials and add-ons

Free membership trials play an important part in conversion. They introduce new customers to all the premium services that a membership offers. Customers get to fully access all services for a limited time, experience quality first-hand, and then happily pay to join permanently.

Similarly, selling add-ons helps out your members a lot too. That is in case they don’t want to upgrade their plan entirely. So they can simply purchase an additional service separately, without having to buy an entire package.

Let’s take the gym membership scenario again. A gym member on the basic plan can buy one coaching session à la carte, without needing to upgrade to the advanced plan.

Automatic billing adjustment

To allow members to switch their plans effortlessly, memberships must first be prepared for billing adjustment themselves. They must have a membership management software that helps them with charge proration, invoice changes, and account updates. Without these features, bills have to adjusted manually. That can lead to unprofessional errors, slow processes, and member dissatisfaction.

Real-time tier performance monitoring

Tier performance needs to be constantly monitored, so that it can be improved further. Memberships require insights such as each tier’s conversion rate, retention rate, churn rate, popularity, revenue generation, and more. They can also track their members’ upgradation journeys to mark when their customers made the switch, and analyze what motivated them to do that.

And if you don’t offer these features yet, you have no time to lose! Sign up with our capable membership management software now.

How SubscriptionFlow Converts Your Membership Tiers into Profit Engines

SubscriptionFlow offers a comprehensive suite of membership management and billing tools. These tools help you set up versatile tiers, and then manage them for optimal revenue. Here’s what you can do:

Manage everything from one place

Memberships get unified dashboards from where they can control all their operations. They don’t need to rely on disjointed tools or platforms to manage their tiers. Instead, they can configure different tiers, tie them with different prices and billing cycles, and monitor their performance—all from one platform.

They can also instantly update their plan prices, or schedule price updates whenever needed. SubscriptionFlow ensures that all your members are timely notified if any price changes are scheduled.

Automate invoicing and proration

If a customer moves to a lower plan mid-month, say on the 15^th, their charges are automatically prorated. Meaning, the system keeps only that portion of their upfront payment that justifies their 15-day service usage. The rest of the amount is refunded to them. Of course, this depends on the membership’s refund policy as well.

Similarly, if a customer upgrades their plan mid-month, the system re-calculates their invoice. The unused portion of their payment for the current plan is deducted from the total charge of the new plan, so that the customer only pays for what they use.

Integrate with multiple payment gateways

Memberships can encourage international conversions too by channeling payments through multiple payment gateways. This means that they can offer various payment methods that accommodate a wider array of preferences.

They can use multiple backup payment options to reduce their payment failure rate as well. Any time a member’s payment method creates problems, they can be encouraged to change it.

Enable self-service portals

SubscriptionFlow allows your members access to their own portals. These portals let them manage their membership tiers themselves, saving your time while improving their experience. They don’t need to rely on support tickets to change tiers—that is simply too slow and full of friction. By giving the control in their hands, you facilitate instant tier changes, and automatic account updates.

Want to take your membership tier flexibility to the next level? Team up with SubscriptionFlow now. Learn how we help memberships like yours scale their revenue.