Lifetime memberships can be a valuable tool for membership organizations seeking to reward loyal members, boost non-dues revenue, and enhance member retention. By offering lifetime memberships, member-based organizations can charge a higher upfront fee, reducing the need for frequent renewals and fostering a sense of brand loyalty among members.
Despite their advantages, lifetime memberships also present potential drawbacks. The higher upfront cost may deter some potential members, and organizations may face inflexibility in adjusting pricing for future offerings or cost increases. Additionally, lifetime memberships could be misused by members, leading to increased costs and service quality concerns.
Membership organizations should carefully weigh the pros and cons of lifetime memberships before implementing them. While lifetime memberships can be a powerful strategy for retaining loyal customers and generating revenue, it is crucial to consider the potential financial implications and the possibility of membership misuse.
To mitigate the risks associated with lifetime memberships, organizations can implement strategies such as establishing clear membership guidelines, regularly reviewing membership fees, and monitoring member behavior. By proactively addressing potential issues, organizations can maximize the benefits of lifetime memberships while minimizing their drawbacks.
This article will provide you with an objective overview of lifetime memberships for associations, covering both their merits and demerits. This information will help you make an informed decision about whether lifetime membership is right for your organization.
Quick Reads
- When Should You Offer Lifetime Memberships?
- What Should a Lifetime Membership Cost?
- What Are the Pros and Cons of Offering Lifetime Memberships?
When Should You Offer Lifetime Memberships?
There are a few instances when offering a lifetime contract for your association might make sense. If you are starting out and trying to get people to join your organization, then a lifetime membership is the way to go.
A lifetime subscription is also a good idea for getting some cash into your business.
If your organization needs an injection of cash, a lifetime deal can be a great way to bring in that money. The downside is that a lifetime deal will leave you vulnerable to not having incoming recurring finances in the future, which you would get with a monthly subscription.
So, when should you offer lifetime subscriptions? It depends on what you're trying to achieve.
If you're looking for short-term gains and want more people to join your organization, then go for it. However, if you want long-term sustainability, you should think twice before offering a lifetime contract.
Read more: A Step-By-Step Guide for a Successful Membership Drive
What Should a Lifetime Membership Cost?
There is no definitive answer, as each business is different, and you need to tailor your pricing strategy accordingly. However, we can provide some general advice.
When pricing a lifetime membership, it's essential to consider what the members get for their money. In most cases, a lifetime membership is more cost-effective for them than paying month-by-month. This is especially true if they expect to use your service for an extended time.
However, lifetime memberships should generally be offered when there is significant value for your members and when the business can reasonably expect to continue offering that value for a long time.
For example, a lifetime membership could be an excellent option if you have a constantly updated course with new content. This is because they would get access to all future updates without having to pay again.
In contrast, offering something other than lifetime memberships might make sense if your organization undergoes cyclical changes. If there's no guarantee that the members will continue getting value from the membership after a certain point, then a lifetime membership won’t work.
You don't want to price your lifetime membership too cheap, as you'll miss out on potential revenue, but you also can’t price it so high that nobody will buy it. A good rule of thumb is to price it around 2-3 years of the monthly rate. So, if your monthly rate is $50, your lifetime price should be around $1,200-$3,600.
Read more: A Comprehensive Guide to Membership Pricing for Associations
Of course, this is just a guideline, and you may find that you need to adjust your price depending on your membership model and what you're offering. The most important thing is ensuring that your customers feel like they're getting a good deal.
What Are the Pros and Cons of Offering Lifetime Memberships?
Offering a lifetime membership to your members is a big decision. There is no one correct answer because it depends on many factors. We can provide you with all the pros and cons of offering a lifetime membership to your customers so you have a clear understanding of what you should do for your association.
Pros
There’s no doubt that lifetime memberships might be a good idea for your organization. Some companies love them, and some won't touch them with a ten-foot pole. You’ll have to decide for yourself which camp you fall into, and to help you decide, here are some pros to offering a lifetime membership for your course, software, or website.
Sustainable Audience
When you offer lifetime memberships, you create a committed audience loyal to you and your association. They become a reliable source of ongoing revenue as well as refer your organization to others.
In addition, having a sustainable audience allows you to establish yourself as an industry leader. When your members have invested in you for the duration of your membership site, they are more likely to follow your lead. This gives you a competitive edge in the marketplace and ensures your success.
Upselling and Cross-selling Opportunities
Upselling and cross-selling are two different sales techniques companies use to increase revenue. The main difference between the two is that upselling is about convincing the customer to purchase a more expensive product while cross-selling is about recommending a complementary product to the customer.
A lifetime membership can increase upselling and cross-selling opportunities. Additionally, it create an opportunity for your customers to avail of more benefits at a discounted price. And, since they’re already familiar with your brand, they’re more likely to purchase.
Short-Term Cash Influx
When you're able to offer lifetime memberships, it's a great way to get a short-term cash influx. This is because people will be more likely to sign up for a membership if they know it's a one-time payment that will last for the rest of their life. This means that you'll be able to bring in more revenue in the short term, which can help grow your business.
Lifetime Members Have Skin in the Game
When someone pays for a lifetime membership, they are essentially putting skin in the game, meaning they are more likely to be vested in the community and want it to be successful.
Lifetime members aren’t in any rush to use up their benefits, but they are always looking for ways to get the most out of their investment. This can lead to some excellent outcomes for the community as a whole.
Lifetime members are some of the community's most active and vocal members. They want to make sure that they are getting the most out of their investment, and they are always looking for ways to improve things, which means you will get some great feedback and suggestions for the community.
Robust Referral and Affiliate Marketing Opportunites Available
One of the best things about offering lifetime memberships is the robust referral and affiliate marketing opportunities. Once you have lifetime members, the best publicity you can get is through the mouths of your satisfied customers. Referred leads will convert 30% better than cold leads.
Even if you're not using an affiliate program to incentivize referrals, you should still encourage members to tell their friends and family about lifetime membership benefits. Get them to ask for the same information from their friends and family when signing them up (they have given you) and offer prizes based on the number of referrals they make.
You could also gamify your lifetime members' referral and affiliate sales by creating milestones with rewards. For instance, you could tell them that for every five referrals, reward members win an exclusive 1-on-1 networking session with you.
Read more: Boost Attendee Engagement at Virtual Events With Event Gamification
These ideas will keep members engaged and motivated to refer others to your site, hopefully bringing in more revenue.
Counteracts Subscription Membership Churn
Offering a lifetime subscription can be a great way to combat subscription membership churn. If people are already starting to distance themselves, you won't have a tremendous conversion rate, but if you're going to lose them, offer it anyway. It's a no-lose situation.
Lifetime memberships can also act as an upsell. If someone is considering canceling their subscription, you can offer them a lifetime membership at a higher price to keep them around. This can be a great way to increase your revenue per member and keep your engagement rates high.
Recoup Your Initial Costs and Annualize Your Ongoing Costs
When starting your business, you will have many upfront costs. Offering lifetime memberships can be a great way to recoup your initial business investment.
You can get a sizeable one-time payment from your customers or offer to break the cost up over two or three months. Either way, you’ll get a lot of money to pay off your debts.
Selling lifetime subscriptions can help offset the cost of setting up and running your organization and can be a significant boon to your success.
Lighter Support Burden
One of the pros of offering lifetime memberships is that you have a lighter support burden. Lifetime members will not need new training or information each month. They know how the site works, what they get with their membership, and the answers to all the questions that new monthly subscribers ask.
More lifetime memberships mean you can focus your time and energy on providing great content and services to your existing members rather than repeatedly answering the same questions. This can help improve member satisfaction and encourage them to stay around for the long haul.
Simple Pricing Model
When you have a simple pricing model, it’s easy for your members to understand. There are no surprises, and they can easily calculate how much they’re spending. This helps build trust and loyalty, as they know what they’re getting into.
Additionally, you don’t have to worry about refunds when customers change their minds – they can simply cancel their membership without hassle. And finally, you can easily match your member acquisition cost to a fixed amount of revenue, making it easier to plan and budget for your association.
Sets a Dominant Corporate Image
Setting a dominant corporate image can be a pro for offering lifetime memberships. When your organization projects a strong, authoritative presence in its niche, potential members will see a high degree of perceived value in your content.
Members will be more likely to invest in lifetime contracts knowing they will receive valuable information and resources from your company. This can help to build customer loyalty and encourage long-term relationships with your organization.
Read more: 20 Effective Membership Retention Strategies & Ideas
Cons
While there are definitely some pros to implementing a lifetime subscription for your membership website, you should be aware of some downsides.
Higher Upfront Commitment
When you ask someone to commit to a lifetime membership, you're asking them to invest a lot of money in your organization. And that's a big ask, especially if you have yet to prove that you're worth the investment.
Even if you offer exceptional member experience, people hesitate to commit to something for life. They want to know that they're getting their money's worth and will continue to get value from your membership over time.
That's why it's vital to put in extra legwork to make your website more trustworthy. You need more explicit pricing pages, more page testimonials, and more one-on-one salesmanship.
Only when people feel confident that they're making a wise investment will they be willing to commit to a lifetime membership. So it's up to you to prove that you're worth the price.
Less Recurring Revenue
When you offer lifetime memberships, you expect a lot of revenue from a minimal number of people.
That may not be an issue in the first two years, but in ten years, you will have over 1000 members who aren’t providing you with revenue anymore. These members who are not paying anything are just taking up space in your membership area and taking attention away from new or paying customers.
You will still be expected to create new content for members who haven’t paid anything in years. If you decide to offer more benefits, your members will expect to get that automatically. This can be very frustrating for membership site owners, who often resent the fact that there are people in their membership who expect all this content and pay far less.
You Might Have to Change Your Membership Model
When you offer lifetime memberships, your membership model changes to one that relies more on sales than retention. Lifetime memberships are a one-time payment, and once someone has made that payment, your organization is geared toward keeping them happy rather than attracting new members.
While this may be a good thing for businesses that rely on repeat customers, it can be a con for companies looking to grow. When your customer base is made up mainly of lifetime members, you'll focus more on increasing memberships than pleasing the ones you already have. This can mean changing your membership model to attract new customers.
Higher Pricing Leads to Fewer Customers
Having a high price point could lead to fewer customers and is a con for offering lifetime memberships. When people see a high price, they are often put off, even if it is for a lifetime membership. Some people will only see the considerable number they have to pay and move on from your site. This can lead to fewer opportunities for list-building, cross-selling, and upselling.
Need a Firm Refund Policy
When you take a hard line on refunds, it can be a con for offering lifetime memberships. This is because it can lead to customers thinking that they can just take the refund and then sign up for the lifetime membership, knowing they can always get their money back if they don't like the content.
Issuing too many refunds can also lead to cash flow fluctuations, as you may have to refund people more often if you have a lenient policy. This can put a strain on your finances and may even lead to you getting poor online reviews. For these reasons, it is crucial to take a hard line on refunds and to make sure the policy is fair so that you keep customers.
Offering lifetime memberships might be a good idea for your organization, but it's not a cut-and-dry decision — you need to be aware of the pros and cons of offering them.
When pricing a lifetime membership, it's essential to consider what the customer gets for their money. In most cases, a lifetime membership is more cost-effective for the customer than paying month-by-month.
How you decide to offer memberships is ultimately up to you, but hopefully, you now have a better idea of the consequences of offering lifetime memberships.
Conclusion
In conclusion, offering lifetime memberships to your members can be a great way to show appreciation, retain members, and increase profits. However, there are also some potential drawbacks to consider, such as the loss of recurring revenue and the risk of pricing yourself too low. Ultimately, the decision of whether or not to offer lifetime memberships is a business one that should be made on a case-by-case basis.
How Glue Up can help?
Looking for digital solutions to acquire and engage your members? Get a demo of Glue Up membership management solution to learn how automation and personalization can help you develop meaningful relationships with your members.
Author Bio: Andrew Dunn is a serial business builder with over seven years of experience growing businesses. He is the founder of INDMND.com, providing valuable insights for business owners to leverage technology to 10x their businesses. He is passionate about scaling businesses using SEO, paid media, and remote teams.
