Should You Offer a Free Membership Level?

by Octavia D | Jul 31, 2023 | Resources

“Everyone likes free things” is such a popular phrase it’s almost a cliché. From free samples to free membership options, businesses in every industry have found ways to offer something for nothing. But should you do it too, as a membership site owner?

The answer is a bit more complicated than a simple “yes” or “no” — and in this article, we’re taking a closer look at the pros and cons of offering a free membership level.

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Pros of Offering a Free Membership Level

There’s a very good reason free membership options are widely offered — they can be really effective for a variety of businesses. Here are some of the biggest advantages of offering a free membership level:

Increasing Brand Awareness

Offering a free membership option is an excellent way to increase awareness for your brand and attract new members. This is especially true for membership sites just starting out, but existing sites can benefit too. Any time a visitor signs up for your free membership level, you have the chance to engage and nurture that lead into becoming a paying member down the road.

Accessibility

A free membership can make it easier for potential members who might not give it a try otherwise. If a membership site is too expensive, people might be hesitant to take the plunge. Offering a free option can eliminate this barrier and make your site more accessible to everyone.

Furthermore, offering a free membership level also enables you to attract and engage a much wider audience. It’s easier to get people to sign up for something when there’s no cost associated with it, so you can start building your community right away.

Following Industry Standards

In some industries and niches, a free membership level is so common it’s almost expected. For instance, it’s almost unheard of for a SaaS company to not offer a free trial period. If you don’t follow industry standards, potential members might not take your membership site seriously (or they might just jump ship to a competitor.)

Collecting Feedback

Offering a free membership site enables you to collect feedback and gain valuable insights from your members. This can help you make better decisions about everything from pricing to features and more. You can also use this feedback to shape the direction of your membership site and ensure it’s meeting the needs of your members.

Whether your membership site is still new on the market or has been around for a while, your (potential) customers’ opinions are invaluable. They can inform and transform not just the content you offer, but your entire business strategy.

Acquiring More Data

When you start a membership site, you rely on third-party data and educated guesswork/ hunches. That’s fine, but nothing can beat real-life, first-party data.

Having a free membership tier can help you gain more of the data you need to make informed decisions about your business. You’ll be able to track and analyze member behavior, and use this information to refine and improve your services.

Boosting Customer Loyalty

Finally, giving away something for free can help to increase customer loyalty. Once people get used to getting things without paying, they’re less likely to look elsewhere – and are more likely to stay with you even when the freebies end.

This can be a great way to create customer loyalty and referral programs. For example, you could incentivize free members with a discount for a paid membership if they recommend your site to their peers.

Cons of a Free Membership Level

Nothing is ever perfect, and that certainly applies to offering a free membership option. So while there are definitely some advantages to this strategy, it’s important to understand the potential drawbacks as well.

Limited Resources

If you offer too much for free, it can be difficult or impossible to cover your costs. When running a membership site, the more members you have, the more expenses you incur. That means it can be hard to make ends meet if you’re giving away a lot for free or offering too many discounts.

With digital products, this is less of an issue. For example, adding members to your site will not cost you extra (most likely), so you offer as many free downloads/ accounts as you want with no additional cost.

However, if your membership site offers physical or tangible products, like a product subscription box, it’s much more difficult to offer something for free. You’ll have to pay for the materials and shipping costs; therefore, it’s unlikely that you’ll be able to make offering a free membership level viable.

Last, but not least, keep in mind that too free membership level customers can incur additional costs in terms of customer care and support. While this may not be applicable to all types of membership sites, it’s a good idea to factor in the cost of support when considering offering a free membership level.

Quality Control

Another potential issue with offering a free membership level is quality control.

When someone doesn’t have to pay for something, they may feel less of an obligation or sense of responsibility to contribute meaningfully. That can lead to a lot of low-quality content being posted on your platform – which can hurt the quality and reputation of your membership site.

This can be particularly problematic if you’re running a members-only community because it may give the impression that your site is all noise and no signal.

Possible Resentment from Paid Members

If your membership site offers additional features or bonuses in its paid tiers, some people might feel resentful if they find out others are getting the same services without paying. This could lead to disgruntled customers and more work for your support team.

This is why it’s very important to make sure there’s a real differentiation between your free membership levels and your paid ones. Paying members should always get something that free members can’t get, whether that’s access to exclusive content, one-on-one consultancy, or something else.

Lower Engagement from Members

Free membership options tend to attract a lot of people — but that doesn’t mean all of them will be genuinely interested in your site. Many of them will just be there to take advantage of the freebie and then leave as soon as they can (or whenever the offer expires).

This means you may have a lot of people signing up for your free membership, but relatively few who actually engage with it or pay attention to what’s going on. That’s why it’s important to focus on creating an engaging membership experience that keeps members coming back.

Increased Competition

Be aware of the potential for increased competition when offering a free membership site. As soon as people see the opportunity for a freebie, they’ll flock to your platform — and your competitors will take notice. That could lead to a lot of new entrants in the market, which could make it harder for you to stand out.

Therefore, it’s important to have a plan in place for how you’ll differentiate yourself from your competitors and draw people in with compelling content and value-adds that they can’t find elsewhere.

Low to No Perceived Value

“Free” doesn’t always have great connotations. Yes, people like free stuff, but more often than not, they also associate it with a lower perceived value. This means that nurturing free members to upgrade to a more premium membership can be difficult — not to mention that they may not take the free service seriously if they think it’s not worth anything.

Therefore, it’s important to offer something of real value in your free membership level and make sure you communicate its worth clearly.

Lack of Conversions

Finally, if you’re building a membership site, it’s likely you want to generate revenue with it. Clearly, that’s not possible with free memberships. So while offering a free membership option can have benefits, it won’t be the most profitable option for your business.

That’s why it’s best to focus on creating an experience that will encourage members to upgrade to a paid level. Nurture and drip email campaigns, retargeting current members with ads, and continuously proving the value of paid upgrades will all help you nudge more free members to start paying for your services.

Who Is a Free Membership Level Right For?

There’s no set recipe on who should and shouldn’t implement a free membership option on their site. As a general rule, if you sell physical products or if you want to position your membership site as a luxury/ very premium service, then it’s likely not a good idea to offer something for free.

But if the type of membership product you’re offering is mostly digital (such as access to online courses, webinars, podcasts etc.) or if you’re building a community and want to give potential members a taste of what they could be getting by subscribing, then offering a free membership level can be a great way to entice people in.

In the end, it’s important to think carefully about whether offering a free membership level is right for your site and your long-term goals. A little bit of planning now will save you from headaches down the line.

Finally, remember that nothing beats good, old testing. You may have theories now, and you may even have some data — but if you don’t test out different options and see how (potential) members react, you will never know for sure what works or doesn’t work with your audience. So don’t be afraid to experiment and see what happens!