Nova membership | How to convert a free service to paid one?

8 min readJul 4, 2023

At Nova, there are two key roles within the community dedicated to enhancing member experiences and fostering their development and networking opportunities. Both Talent Agents and Community Managers work tirelessly to provide quality service during sessions and create engaging events. Up until now, being part of Nova and benefiting from all these services has been free, but the truth is that it has come at a high cost for us. Furthermore, we have reached a stage of maturity where we are providing significant value, but without attaching a price, our efforts were not fully appreciated. Therefore, after nearly three years of operation, it was time to introduce a pricing model. But how?

The financial logistics

There are many business models and ways to monetize a service. Nowadays, we are accustomed to subscriptions, but we needed to determine which model best suited our needs.

One option that was considered was designing a Premium plan, similar to what we were already doing with Premium Talent Agent, but with additional features that we knew would be of high interest. However, this solution presented several challenges:

Firstly, the conversion rate of Premium Talent Agent was not ideal, so despite offering attractive features, it remained a risk. Furthermore, even if the conversion rate improved, setting a high price would not be feasible, resulting in limited profitability.
Secondly, if we introduced both a Standard and a Premium mode for certain features, such as Gravity, ensuring optimal quality connections for both Standard and Premium members would be challenging without compromising the experience of Standard members.
In some other features, such as events or jobs, it was still important for us to have a large participation, so including them in a paid plan was not viable.
Mentoring was one of the most appealing features for Novas, but the in-platform solution for it was still under development and couldn’t be positioned as a main feature of the Premium mode.

In summary, the Premium plan seemed like a good solution, but perhaps we lacked some maturity to fully implement it.

Another option that was considered was a payment for entry, where potential members had to pay a membership fee after undergoing evaluation. This option aligned well with our ideals, but it presented its own set of challenges:

Conveying the value of the community to those who had not yet joined and experienced its benefits.
Crafting a persuasive narrative and refining the conversion flow, ensuring that members naturally perceived membership activation as the next step and minimizing attrition.
Deciding between one-time or yearly payments. While recurring payments were more appealing from a business perspective, considering that our service had been free, we had to assess whether a significant number of members would be willing to convert or if the majority would refrain from paying.
Addressing existing members’ situation. Should we charge them for a membership they already had and benefits they had been enjoying for free, or should we inform them of the change and exempt them from payment as early adopters?
Maintaining meritocracy in our process. Depending on the price, there might be individuals who couldn’t afford it, and we wanted to ensure equal opportunities for all.

Ultimately, we decided to pursue the payment for entry model as it aligned with the concept of being a member of a network, similar to a physical social club. We are aware of the challenges mentioned earlier and are actively working on addressing them as we move forward.

The fine line between cheap and expensive

One of the challenges in this change was determining the right price. Since we were transitioning from a free service, any price could potentially be seen as expensive. So, where should we draw the line? To address this, we conducted an analysis using the Van Westendorp’s Price Sensitivity Meter — a pricing research model developed by Dutch economist Peter Van Westendorp in the 1970s. This model involves asking four specific questions to investigate and analyze the price range that users would be willing to pay and identify the optimal price point. The questions are as follows:

At what price would you consider the product X to be cheap?
At what price would you consider the product X to be too cheap, raising doubts about its quality?
At what price would you consider the product X to be expensive but still acceptable?
At what price would you refuse to buy the product X because it is too expensive?

We launched the survey to users who had been accepted as Nova members but had not yet used the app or our services. As shown in the image, the data is plotted on a coordinate graph, and the optimal price corresponds to the intersection between the “too expensive” (55€) and “too cheap” (30€) responses. This analysis helped us determine a pricing range that resonated with our target audience and struck a balance between affordability and perceived value.

The final decision

As mentioned earlier, the final decision was to introduce a membership fee to be part of the network, which required a change in the user flow. Therefore, talents who had successfully passed the evaluation (Nova quality) would need to make the payment to become Nova members.

To address the challenges, the following measures were taken:

Communication Campaign: A comprehensive communication campaign was designed for non-members, focusing on highlighting the value of the network. The website was also revamped to emphasize the product and tangible benefits.
Landing Page: A carefully crafted landing page was added to the user flow to reduce drop-outs and provide a persuasive message for membership activation.
Annual Payments: Both new members and early adopters were required to pay for the membership, with annual payments. Although this decision carried some risk, existing members were already engaged with the network and more likely to pay for the services offered. As a token of appreciation for their trust, a 50% discount was offered to early adopters.
Meritocracy: To maintain meritocracy, each case was individually evaluated, and discounts were provided based on specific needs.

In terms of pricing, although the optimal price obtained was around 50€, a comparison with similar services in the market revealed prices ranging from 100€ to 150€. Therefore, a bold decision was made to set the price at 120€/year for new members and 60€/year for early adopters who made the payment during the month of June (the launch month).

Much more than words

To ensure a seamless transition, our Product team conducted a thorough analysis of the platform, identifying necessary changes and devising strategies to optimize conversion rates in alignment with our new direction.

Workflow change

Requiring payment from users who successfully completed the evaluation was a crucial conversion point, and crafting the right message was a significant challenge. It was essential to communicate the value of the payment without sounding defensive, ensuring that not paying was not perceived as an option. To address this, we created a thoughtfully designed landing page showcasing the features and benefits users would enjoy, carefully crafting persuasive copy that emphasized the tangible value they would experience.

Principle of reciprocity

To effectively convey the value we provided as a justification for the membership fee, and in line with the principle of reciprocity, we offered a small gift or incentive. For this purpose, we introduced a dedicated section called Certifications with a redesigned membership certificate, carefully crafted for easy sharing.

From this view, users can access both the online certificate and the downloadable PDF, along with additional extras like LinkedIn backgrounds or badges for email signatures and portfolios. Furthermore, since many members previously added their Nova experience as a job entry on LinkedIn, we aimed to shift that behavior and encourage them to showcase it as a certification. To support this, we included clear instructions on how to share it effectively.

Design for failure

Although it would be ideal for all members, both new and early adopters, to pay for the membership, we understand that it is not easily achievable. Therefore, we needed to be prepared for challenging members.

Firstly, we developed a conversion strategy that included extending the duration of the discount, sending reminder emails, and ensuring these emails had a personalized touch, coming directly from the CEOs.

Additionally, we considered what both non-paying members and users who had passed the evaluation but had not converted into Nova members due to non-payment would experience. We aimed to provide them with valuable insights and benefits to maintain engagement and encourage them to reconsider joining the Nova community.

For example, early adopters who have not paid for the membership will still be able to use the jobs section and Nebula (courses), as well as continue to watch the events that are being launched. However, they will not be able to register for the events or use Gravity. In this way, members who have already used the app can continue to enjoy the majority of the features and stay up to date with our events, but they will need to pay for the membership in order to access the most exciting ones.

Communication

The decision to introduce membership fees was a bold move, considering that we had been providing our services free of charge. To ensure we handled the situation sensitively and preserved our reputation, it was vital to clearly articulate the reasons behind this decision and effectively communicate it internally and externally.

To achieve this, we developed a series of informative emails for our existing members. These emails had a clean design and were personally sent by our CEOs, aiming to create a sense of closeness and personalized communication. Additionally, we have revamped our website to maintain a consistent narrative that emphasizes the tangible benefits that users can enjoy as members.

What’s up next?

It has been nearly a month since the highly anticipated launch of our membership program, and we are thrilled to share that it has already made a significant impact. We have witnessed a remarkable conversion of a 10% of our existing members, who have embraced the new offering, along with a 43% of new members who were enticed by the added benefits.

The reception thus far has been exceptionally positive, considering the daring nature of this change. It was indeed a risky decision to transition from a free service model to a paid membership, but the level of acceptance and enthusiasm among our community has exceeded our expectations.

Nevertheless, this is just the beginning of an exciting journey. We believe there is still much more to be discovered and accomplished. Our intention is to give the membership program ample time to mature and evolve, carefully observing its direction and identifying opportunities for further growth.