Difference between Membership and Subscription Business Models

This article will explore the difference between membership and subscription, their benefits, and how they apply in various contexts. Memberships and subscriptions are two terms that are often used interchangeably, but they have distinct differences.
Table of Contents
What is a Membership?
Memberships provide access to specific privileges, benefits and services an organization or group offers. It involves an ongoing relationship between the member and the organization, typically requiring a one-time or recurring fee to join.
The format of memberships can vary depending on the organization providing them. For instance, a gym membership grants people access to the gym’s facilities, equipment, and classes. In contrast, a professional association membership allows members to network with colleagues in their field, access educational resources, and attend industry events.
Membership provides the benefit of creating a sense of belonging and community. Membership in the organization offers opportunities for individuals with shared interests, values, or goals to connect and collaborate through a provided platform.
Membership often includes exclusive benefits and discounts, such as access to resources, product or service discounts, and preferential treatment.
What is a Subscription?
Subscriptions involve paying a recurring fee in exchange for access to a product or service. The subscription model is commonly used in the digital industry, whereby companies provide services like streaming movies, TV shows, music, or software.
Subscriptions are available in various payment intervals, including monthly, quarterly, and yearly, and can be cancelled at any point. Subscription services typically provide ongoing value to subscribers, such as new content, updates, or access to exclusive features.
Subscriptions offer a notable benefit to businesses by providing a consistent source of revenue over an extended period, making it more stable and sustainable than relying solely on one-time sales.
Subscriptions have the potential to foster customer loyalty, as those who subscribe are more inclined to stick with the service if they deem it useful and convenient.
Membership vs Subscription
While membership and subscription share some similarities, such as recurring payments, the two have distinct differences. The primary difference between membership and subscription lies in the nature of the relationship between the member or subscriber and the organization.
Membership involves an ongoing relationship between the member and the organization, often with shared values or interests. Members are typically given access to exclusive benefits or privileges, and the organization is responsible for maintaining the membership experience.
In contrast, subscriptions are focused on providing ongoing value to the subscriber. Subscribers pay for access to a product or service, but they do not have a deeper relationship with the organization beyond that.
Membership is often associated with physical communities or organizations, such as gyms, professional associations, or country clubs. On the other hand, subscriptions are more commonly used in the digital world, such as streaming services or software.
Choosing between membership vs subscription depends on the goals and needs of the organization. Membership is best suited for organizations that want to foster a sense of community or provide exclusive benefits to their members. On the other hand, subscriptions are best suited for organizations that offer ongoing value through their products or services.
Difference between Membership and Subscription
Membership | Subscription |
---|---|
Involves an ongoing relationship between the member and the organization | Focused on providing ongoing value through products or services |
Members pay a one-time or recurring fee to join and gain access to benefits | Subscribers pay a recurring fee for access to a product or service |
Often involves a physical community or organization, such as gyms or professional associations | Often used in the digital world, such as streaming services or software |
Provides exclusive benefits or privileges to members | Provides ongoing value through updates, new content, or access to exclusive features |
Fosters a sense of belonging and community among members | Creates a loyal customer base through ongoing value |
Often requires a membership application process or approval by the organization | Can be canceled at any time by the subscriber |
Examples include gym memberships, professional associations, or country clubs | Examples include streaming services, software subscriptions, or monthly product boxes |
By understanding the difference between membership and subscription, organizations can choose the right approach to provide value to their customers or members.
How do I start a membership or subscription business?
First, identify your niche. Afterwards, determine what type of membership or subscription service you will offer. Conduct market research, decide on your pricing model, develop your website and payment gateway, and launch and promote your business.
We have elaborated on the tips below:
- Identify your niche: Choose a specific niche or industry you want to focus on. Consider your skills, interests, and experience, and determine what type of membership or subscription service would be valuable to potential customers.
- Define your offering: Once you have identified your niche, determine what type of membership or subscription service you will offer. Will it be a physical product or a digital service? What benefits or exclusive features will you provide to members or subscribers?
- Conduct market research: Conduct market research to determine the demand for your offering and to identify your target audience. Look at your competitors to see what they offer and how you can differentiate your business from theirs.
- Determine pricing: Decide the pricing model for your membership or subscription service. Will it be a one-time fee or a recurring payment? Consider your costs to provide your offering and set your prices accordingly.
- Develop your website and payment system: Set up a website to showcase your offering and allow customers to sign up for your membership or subscription service. Ensure that you have a secure payment system in place to process payments.
- Launch and promote your business: Once you have everything in place, launch your membership or subscription business and begin promoting it to potential customers. Use social media, email marketing, and other advertising channels to reach your target audience.
- Continuously improve and innovate: As your business grows, innovate and improve your offering to provide ongoing value to your customers or members. Listen to feedback and adapt your business as needed to ensure that it meets the needs of your target audience.
Starting a membership or subscription business can be a challenging but rewarding endeavour. Following these steps above, you can build a successful business that provides ongoing value to your customers or members.
Conclusion: Membership vs Subscription
In summary, membership and subscription are two distinct models that organizations can use to provide value to their customers or members.
Membership focuses on building a community or providing exclusive benefits to members, while subscriptions focus on providing ongoing value through products or services.
Understanding the differences between the two models can help organizations choose the right approach to achieve their goals and provide value to their customers or members.