We come across many people who don’t understand what a membership is, or how it compares to other business models…
And a question that we often get asked is what’s the difference between a membership and subscription?
While membership and subscription are terms used interchangeably, they’re actually very different.
In this article, we delve deeper into two key differences between a membership and a subscription so that you can easily identify each business model.
Firstly, it’s important to know that…
Memberships are more than just a financial transaction
When we talk about an online membership, we mean a website where people pay for access to a combination of one or more of the following – gated content, expertise like a coaching element, and/or a private community…
And where the payment is normally subscription based, although this doesn’t always have to be the case as you’ll discover as you read on.
Now, you may be thinking that they’re the same thing, especially since we mention that payment is subscription based…
But there is a very big difference between the two…
A subscription is essentially a financial model where someone is paying some sort of recurring, automatically billed fee – it’s a type of financial billing arrangement.
You may pay a subscription fee for things like your online banking, Amazon Prime, or Netflix.
A membership is much more than delivering a product – it’s where you bring people together over a common interest, topic or cause…
And there’s extra support, usually to help members reach a specific goal or fulfil a need.
Memberships and subscriptions often go hand in hand, especially online memberships, since most charge people on a recurring basis with a subscription.
But both can, and do, exist separately.
There are plenty of subscription sites without a membership component, and there are memberships without a subscription element.
For example, you get membership sites that offer the following payment terms:
- Free access
- Pay as you go
- Credit based system
- Access for a fixed period of time
- One-time fee for lifetime access
So, in online business, a subscription is just a payment term – a way to collect recurring payments needed for (in most cases) continued access to a membership.
The two go hand-in-hand for the vast majority of online memberships but they are separate things.
This leads us to the second key difference in that…
Memberships don’t have to consistently rely on new content
Subscription businesses like Netflix rely on new content being frequently released, and that content needs to be of a high quality.
If you have a Netflix subscription, you’ll know that they drop new TV shows and movies weekly…
What happens if the quality of those new additions begin to fall?…
Well, you’ll probably unsubscribe, right?
While people initially join a membership for the content, it’s the community that keeps people sticking around.
This is one of the reasons why we recommend adding a personal touch to a membership as it’s a powerful way to help people feel part of a community….
With a subscription, you don’t tend to have that community aspect or personal touch since it’s a business model where content is delivered…
Yes, there may be some help or support, but this is usually to resolve customer issues.
To conclude…
Hopefully, this resolves any questions you may have about the differences between a membership and subscription.
Remember, a subscription may seem similar to a membership but it’s a very different business model and method of delivery.
On the other hand, a membership is much more than just a simple transaction – it brings people together who share a common interest and/or want to reach a specific goal.
Further reading you may enjoy:
