The Cost of Undervaluing A Community
To attract new members, I made a pricing mistake that nearly killed the community I worked so hard to build. I undervalued my community and paid the price.
Before the pandemic, I created a space where people could truly connect.
I built a community that united people and fostered meaningful connections.
The community sparked thousands of sales leads, genuine connections, and personal referrals.
It thrived because members didn’t just participate and connect; they valued it deeply and poured their knowledge and energy back into it.
At $1,995 a year, the membership drew top-notch members and helped the community grow quickly.
🔄 2020: The Reset
In 2000, COVID struck, forcing dramatic changes and challenging everything I had built up to that point.
The pandemic reshaped the world and transformed the way business was done. My community-building efforts, rooted in in-person connections and face-to-face meetings, came to a halt.
I quickly realized that life after the pandemic had completely changed how businesses run and how people connect. Professionals weren’t just showing up to networking events or joining groups to find clients and partners anymore.
It wasn’t that simple anymore.
🔬 2025: The Experiment
Recently, I’ve been wanting to build a community again that helps people learn, connect, and grow.
The $1,995 membership did well before COVID, but I wasn’t sure that price still fit today’s world.
I decided to kick things off with a similar package, but at just $20 a month. I wanted to see if I could grow the community quickly with temporary promotional pricing.
It was an experiment that flopped.
After our kick-off event, here’s some of the feedback I got:
A prospect inquired whether their $20 membership fee would be refundable if they didn’t close the $25,000 deal they had generated through our community event.
One guest who received a record number of referrals proudly asked if that entitled her to a free membership.
A potential member said he would sign up on the spot if I cut the monthly membership fee from $20 to $10.
What happened?? Why were so many people haggling over the lower price? Why did the smaller fee suddenly feel like a big deal to so many?
Did people’s values change? Did my expectations change?
Actually, no, it was more complicated than that.
When you’re setting up a membership, there are plenty of other factors to consider …
🗓️ Monthly vs. Yearly
Deciding between a monthly vs. annual membership affects cash flow, member commitment, and retention. Here are the key factors to consider:
1. Cash Flow
Monthly: Brings in smaller, recurring amounts and is good for steady, predictable income.
Annual: Provides a lump sum upfront that helps with planning, investments, and covering bigger expenses.
2. Retention & Engagement
Monthly: Requires ongoing efforts to keep members active; more frequent reminders and engagement needed.
Annual: Members are likely to participate more consistently to “get their money’s worth.”
3. Administration & Marketing
Monthly: You’ll handle more frequent billing, renewal reminders, and possible cancellations.
Annual: Fewer transactions and administrative touchpoints, but you need to make the annual offer compelling.
4. Member Psychology
Monthly: Low-risk option, appealing to new or cautious members.
Annual: Creates a sense of exclusivity and investment as people value something they’ve paid for upfront.
💵 Free vs. Paid
Deciding between free vs. paid membership sets the whole tone of your community. Here are the main factors to weigh:
1. Purpose of the Community
Free: Best if your main goal is reach, awareness, or lead generation.
Paid: Best if your goal is depth, engagement, and sustainability.
2. Member Commitment
Free: Low barrier, but members may drift away easily.
Paid: Financial investment makes members more likely to show up, contribute, and stay.
3. Perceived Value
Free: Risk of being seen as casual or low-value.
Paid: Signals professionalism, exclusivity, and importance.
4. Growth Strategy
Free: Easier to grow quickly and fill with numbers.
Paid: Growth may be slower, but usually higher quality and stronger retention.
People naturally value what they pay for. A free membership can be overlooked or taken for granted, while even a small fee signals that it’s worth attention and commitment.
Investment drives commitment. When you pay, you participate.
Skin in the game creates engagement.
✅ The Takeaway
Will I bring back the $1,995 annual membership?
Honestly, probably not.
And the $20-a-month option?
Definitely not.
If anything, the future annual membership will probably land somewhere in the middle with no monthly option.
I feel like the sweet spot for membership is somewhere between $500 and $1,000 per year.
What do you think?
Have a great week!
- Mike
👀 WHERE TO FIND ME
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