Introduction

Group leaders have common misconceptions when considering payments for their group:

"If members are required to pay, no one will show up and my group will die."

"We have been free for so long, no one is going to pay."
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"A few members cannot afford to pay. Therefore we can’t charge anyone."


‍After helping hundreds of group leaders collect tens of thousands of group payments, these fears rarely prove true. It turns out, not only are group members happy to pay for their group, but payments also make the group stronger.

When members pay, they are more likely to show up. They ascribe value to the group and make a commitment. Group leaders get resources to create better experiences for their members. Leaders have a currency to reward other leaders, volunteers, or members in exchange for support.

As a result, paid groups are significantly more engaged than non-paid groups. Engaged groups grow faster and ultimately have a bigger impact on their members' lives.

Are member payments easy? They can be. But just like leading a group, member payments require some upfront thought and effort. Once established, member payments can transform a group into a self-sustaining community.

Payment pitfalls

Group members don’t mind paying for a group they value. But two things drive them crazy:

1) Constantly being asked to pay. It’s annoying and makes them feel guilty. They stop participating in the group.

2) Payment friction. Being forced to mail a check or bring exact cash is frustrating. Make it as easy as possible. For leaders in America, for example, that means accepting credit cards like every other service they pay for.

Avoid these pitfalls by asking for money infrequently and remove the friction to pay.

The menu of member payments

MYTH: Groups don’t need a formal membership due to collect member payments

There are 5 ways to collect payments from members:
A. Paid events
B. Membership dues
C. Supporting memberships
D. Gear and apparel sales
E. Donations and fundraisers

Leaders are not limited to just one path. In practice, most top-tier paid groups establish multiple sources of revenue. Different payment forms actually complement one another.
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Choosing which method is best depends on the group’s culture and goals.

A. Paid events
Charge members to attend
Profit potential: High
Incremental work: Medium
Best for: Incremental one-off events, or specific event headcount requirements
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B. Membership dues
Mandatory recurring payment
Profit potential: High
Incremental work: Medium
Best for: Offering a tangible benefit, like coaching

C. Supporting memberships
Optional recurring payment
Profit potential: Medium
Incremental work: Low
Best for: Keeping the group open and free

D. Gear and apparel sales
Procuring apparel and selling
Profit potential: Low
Incremental work: High
Best for: Large groups

E. Donations and fundraisers
One-time contribution
Profit potential: High
Incremental work: Medium
Best for: Specific experiences or charities.

A. Paid events

Paid events are commonplace. All the time people pay for concerts, sports, dinners, etc. There is a clear value exchange. Members know what they are getting for the paid ticket price.

There are two ways to implement paid events.

First, paid events can be a part of a group’s normal programming. For groups that require specific attendance numbers, they reduce no-shows. A basketball group or a volleyball club can use paid events to hit the required number of players. For members who sign up, payment incentivizes them to show up.

Paid events reduce no-shows by influencing a member’s decision-making process. Showing up to a group event is a two-part decision: Initially, a member decides if they can make it. They look at their calendar and weigh the event against alternatives, typically weeks in advance. If they plan to join, then they need to make a second decision close to the event - whether or not to show up. This decision is typically made hours in advance when a member is balancing all the other things that came up that day. Payment increases the friction to sign up but reduces the likelihood of cancellations down the road.

At first, the San Francisco Beach Volleyball group had no paid events. And they struggled with no-shows. Members would sign up to join 50 available slots, but then ~30% would not show up. Their first paid event created concerns about lower attendance. But the day before the event, all 50 available spots were claimed for $10 each, and 49 out of 50 showed up! They have been hosting paid events ever since.

‍Read more about Romain and San Francisco Beach Volleyball.

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‍In addition to paid events for regular programming, leaders can use paid events in an entirely new format. Adding additional paid events provide leaders with the freedom to experiment. Members have no set expectations. They don’t feel like they are paying for something that was once free. Special events can be recurring or one-time experiences. The pressure comes off leaders to deliver consistently. Leaders can experiment with new formats, get creative, and dream big.

Jen from the LA Skate Hunnies hosts paid skate classes in addition to a weekly skate night.

Brittany and the leaders of Midnight Runners Toronto throw party runs in addition to their free weekly free runs.

Romain hosts paid volleyball tournaments for San Francisco Beach Volleyball in addition to classes.
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Whether paid events are part of normal group programming or special one-time experiences, the key is momentum. It’s no different than any other group event. The leaders need to build excitement to get people to show up. Send personal invites, get key influential members on board, and then promote the event early and often.

B. Membership dues

A membership reframes the value exchange from a specific event to the greater value of the group. Events are not the only source of group value. Members will pay for networking, discounts, identity, or just to support a community they believe in.

Membership dues encourage more event attendance. Unlike a paid event, there’s no limit to the number of events can attend. Some members want to “get their money’s worth” and show up as much as possible. Membership dues often lead to an increase in recurring event attendance.

While membership may sound like a rigid form of member payment, on the contrary, it can be designed for flexibility. From monthly plans to scholarships and free trials, leaders can offer a range of options for members to pay.

Though flexible, membership dues have one specific requirement: Members must have the expectation to pay. Exceptions can be made, but they are just that: The group, by default, is paid.

To accommodate a wide range of members, membership dues can be structured with several options through tiers:

1) A long-term option. Dedicated members will remain members for the foreseeable future. Offering an annual or lifetime payment option benefits leaders with upfront cash contributions. Most groups offer a 10-20% discount compared to shorter-term options, like $500/yr or $50/mo.

2) A short-term option. Monthly memberships offer a short-term option for members who cannot commit for a year. Monthly memberships are often utilized by young people in particular. With roommates and less job stability, young members are less likely to sign up for a year of anything. Monthly options serve them well. Some leaders fear a monthly option will result in quitting shortly thereafter. But one-month quits are rare and can be mitigated with an initiation fee.

When offered a choice between annual and monthly, ~50% of all members on Heylo elect for a monthly option. Even with an initiation fee.

3) Scholarship. A low-cost option for members with financial hardship. While most members can likely pay for the group, there may be a handful of members who cannot. A scholarship option, like $5/mo, provides a path for them to join and makes the group more inclusive. These members can stay a part of the group without paying the full freight. Full-paying members feel better about their full contribution as well - they are helping offset the cost of another member’s experience.
A note about scholarship abuse: Prevent abuse by adding an approval layer. It doesn’t need to be some sort of robust application. But a simple review policy reduces abuse to zero.

4) Free for leaders. Membership dues provide a currency to reward people who contribute their time and expertise to their group. Give them a free membership! It helps them feel appreciated and gives an incentive for others to contribute to leading.
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Case study: The Brooklyn Track Club

// Annual due of $200
// Monthly due of $18 + $40 initiation fee. Offsets upfront costs like getting gear from membership
// Scholarship option. Uses a sliding scale that lets the member select a price
// Leaders and VIPs. Allows coaches and team leaders to receive benefits without paying membership
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Dues add friction to onboarding new members. Instead of forcing new members into a membership right away, consider a free trial. New members can experience the group before a big upfront commitment. Free trials can be time-based, like 30 days for free, or they can be event-based, like one class free.

To keep the membership hassle-free, use a recurring membership system like Heylo. No one wants to be chased for money every month or every year. Members want to manage their membership themselves just like Netflix or Spotify. The friction for members is the emotional decision to pay, not the payment itself.

C. Supporting memberships

A supporting membership gives leaders the benefit of a membership due without the rigidity of a mandatory payment. The group stays open and free, but members can choose to join the membership and support the group.

Supporting memberships must include the appropriate benefits for someone to pay for the group. Leaders have several benefits at their disposal:

‍Status. Every member wants to be seen and appreciated. When supporting members receive status, they are more likely to sign up for a membership. Offer them a digital badge for no cost, or a physical item like a headband or t-shirt, to recognize their contributions. Status only matters when it means something. Offer the same status to volunteers or leaders who are contributing their time instead of money.

‍Event discounts. If the group has a regular suite of paid events, offer a discount in exchange for membership. Core members who attend many paid events can get a discount on each individual event.

‍Event priority access. If some or all of the group’s events have attendance limits, offer paid members priority access. The event can be posted and only paid members can sign up.

‍Discounts on group apparel and sponsors. If the group has a gear store or discounts from sponsoring brands, make those a member benefit. Only share discount codes with those who sign up for a paid membership.People support the organizations they love. NPR and Wikipedia are donation-based organizations. Patreon and Substack empower YouTube creators and Writers. Some of your members will pay if structured or communicated effectively!

D. Sell branded gear

Members will buy apparel with the group’s logo on it. This may be a nice way to get some near-term money in the door. But unlike a membership, branded gear comes with upfront cost.

First, leaders must procure the base apparel. Leaders can try to collect sizing and money upfront, but without something to see and touch, it may be challenging for members to commit. Furthermore, things change during the long lead time required to print and deliver apparel. New members for the next few months miss the opportunity to participate. Instead of collecting payment upfront, most leaders go out of pocket and pre-order a variety of sizes from members. Or, they select size-agnostic apparel, like a hat.

With the base gear secured, a leader needs to add the group’s branding. Leaders can manually add logos at home with “iron-ons” or find a local print shop.Once the fresh, branded gear has arrived, leaders need to focus on distribution. Expensive shipping and painful address collection result in leaders distributing in person if they can. The back-and-forth coordination to arrange for meetups gets old.

An alternative to handling procurement and distribution is partnering with a drop shipping company. A leader can select items for sale on their site, upload the group’s logo and share a link with members. The drop shipping company sends apparel directly to members. While enticing on the surface, many leaders find limited success with drop shipping. The apparel is too generic, or it doesn’t fit their specific needs. After shipping and fees, the clothes don’t generate much of a profit after all.

Selling gear and apparel has the added benefit of helping market the group and creating goodwill among members. But without a very large number of members to tap, gear and apparel may be a limited source of profit.

E. Fundraisers and donations

Fundraisers and donations are one-time efforts that can generate a meaningful amount of money in a short amount of time. With a goal and communication plan from leadership, fundraisers and donations can make a meaningful impact.

Goals are critical for successful group fundraisers. They give a target for the group and enthusiasm for members to contribute. On-the-fence members are more likely to jump on board. Plus, goals build camaraderie among members. The group goes through the shared experience of achieving something together. Without a goal, members have limited incentive to participate. Just putting up a donation button on a website often does not yield results.

With any fundraiser or donation drive, follow-up communication is critical. Sharing the results of the money contributed builds goodwill and sets up the next fundraiser and drive. For example, Tanya from Black Women Who Kayak set up a fundraiser for her members to travel for a trek in Alaska. She shared photos of the trip and reported back on the experience. These communications help participants feel like their contributions actually made a difference, and she’s well-positioned for her next fundraiser.

Members of Project 13 Gyms in San Francisco helped raise over $6,000 as a group for Usher’s Syndrome research. One member who lives with the disease worked with the leaders of Project 13 to create a special Saturday workout organized with their digital community, along with a suggested donation to sign up for the class. Not only did the class sell out, raising both money and awareness of the disease, but members who weren’t able to attend still donated to the cause.

‍Read about Project 13 Gyms utilizing fundraisers

How to price member payments

When pricing, leaders make the common mistake of pricing from cost. Cost-based thinking results in a budget group. Members don’t decide to pay by tallying expenses. They pay based on alternatives.

When members consider how much to pay for the group, they use reference points to determine how much they would pay. Subconsciously, they consider alternatives to understand the group’s value to them. These reference points are other aspects of their life that help them compare what is reasonable, and what is not.

The reference-point approach can price the group. Start by brainstorming the various alternatives that come to mind if a member were to accomplish something similar without a group. And go wide! Don’t limit research to other comparable groups. Include other actions that can solve their problem without a group at all.

For example, a track club coach may consider what alternatives a member has to run faster. Maybe it’s signing up for a gym membership, taking a tread class, paying for a private coach, or downloading a generic coaching app.

List all the reference points, and start to triangulate where a group should fall. In the example, perhaps the coached track club isn’t as expensive as a high-end gym membership, but it is more expensive than a generic coaching app and therefore could be $50/mo.

The way NOT TO price the group is by expense. Everyone has a different view on the details of what things cost and what the group should be paying for. It typically leads groups to cost minimization instead of experience maximization. Groups don’t need 100 treasurers and CFOs going through the line items to bring event costs from $9 to $8.

When getting started, remember that pricing can always change! Pricing is an optimization problem. As members provide feedback and leaders learn more reference points, leaders can continuously update prices. Changing prices for existing members can be tough, but new members are easy!

If a high price triggers anxiety among leaders, consider launching with a “founding member” price. Include the lower price in communications and plan to increase the price for new members in the future. That gives current members some incentive to increase in the future.

Launch communications

With payments and pricing complete, transition to the communication plan. The goal of the plan is two-fold: A) help members understand WHY there is a change and B) alleviate any anxieties they may have with the new payments plan.

Developing the WHY
Honesty is the best policy. If the reason is to offset costs with the group, communicate that. If the reason is to justify the time requirement, say that. Members understand that talented leaders have no shortage of opportunities.

Communicate like a wave on a beach
To reduce anxiety, communicate group payments like a wave. Waves build momentum sequentially. The same process applies to communicating in a group. Start with the people closest to group leadership, and work outwards.

Build the ground swell. Start with other leaders, if any. In the early days, 1:1 or small group conversations are best.

Formation. Continue with core members. Core members are the people who consistently show up, stay late, or volunteer their time. They are often the culture setters of the group and set the tone for other members. If core members get on board, the remaining members follow.

Crest. Extend communications to all members with a broadcast. Make announcements and message everyone. Members will look to core members to understand the cultural preference of the group.

Crash. Publish the new policy for prospective members. Add the new pricing to the group’s website, social media, or wherever new members can hear and learn more about the group.

The right time to go paid

Before going paid, first the group must be valuable. If the group is just an idea without an established foundation, it may be too early. Don’t focus on payments - focus on creating valuable experiences. People don’t pay for things they don’t value.

Leaders can determine value by calculating how many members come back to the group. Regular participation is a proxy for value. If the group has members attending 5, 10, 25 events on a recurring basis, or consistent participation in chats and posts, the members must care enough to keep the group a part of their lives. Congratulations! The group is something of value, and it’s time to consider payments.

In conclusion

Members will pay for the groups they value. If a leader has a group that members value, it’s time to consider member payments. Not only do payments make the group more viable and improve the experience, but they also increase the sense of community and belonging associated with the group. It turns out, people value what they pay for.

To summarize, leaders can land their first payment in 3 steps:

1) Select the member payment strategy best for the group

2) Price the plan using reference points

3) Communicate the plan and launch!

With payments rolling in, leaders can lead without the stress of finances and survivorship. Member payments are the surest way to lead a sustainable and long-term viable group!

Appendix: What’s not here

This guide only covers payments from group members. There are other funding sources for groups, like brand sponsorships and local grants. They can be viable, but deserve their own guides! Let us know if you’d like to hear more about it.