Every so often the idea of a free membership tier comes back up for debate in the chamber industry. It’s one of those “in theory” ideas that peeks everyone’s interest but in application causes those of us worried about revenue to shudder.
A member of the Chamber of Commerce Professionals Group on Facebook shared the following:
For those who are still toying with the idea of a “freemium” Chamber membership business model, this might be helpful or at least interesting
Increasing Revenue with a Free Model
How to increase revenue with a free model (in this context “free” refers to a tier of pricing, not free membership for all.) is one of the most important questions in adopting the freemium tier idea. Creating a free level is not something you do in reaction to something that’s not working. Don’t just flip the switch on it.
If you’re interested in offering a free level for your chamber, here are a few things to consider:
There must be a benefit, even to free, a reason they would want to join.
This value/reason cannot cost you much in administrative overhead or services, such as an online membership or e-newsletter subscription. Make sure the stipulations are clear. If offering a free membership is costing you in excessive administrative time, it’s not worth it financially.
The free member should be able to see the value the paying members receive and thus want to upgrade in the future. Tech companies do this very well. They present features to you in their software that when you select them a pop-up appears that reads “This is a paid feature. Upgrade now?” If you want to complete the action you started, you have to upgrade.
The reason behind upgrading is quite clear. It’s not hidden in a feature list. Reading this post about the velvet rope or this one on sustainable chamber growth will give you a greater appreciation in the motivation behind it.
As in all membership tiers, you won’t see every free member convert to a paying one but conversion should be the goal. Chambers are well-suited for this since they have a large number of businesses to draw from and they are already advocating on their behalf. Opening the doors to them is just one more step in inclusion (and part of a great story).
Free is not something you want to institute overnight. There’s strategy behind deciding what will be given away and what will be exclusive content and perks for paid members. You want to drive conversions so the lines between tiers have to be clearly delineated, and the motivation to make the jump to paid membership cultivated.
Guest post by Christina Green
Image via Flickr by Alan O’Rourke