Practical Sales Training™ > How To Convert > The Joining Fee Effect

What is it?

The Joining Fee Effect is all about having a separate fee for when you first engage with a client which is designed to cover associated set up costs.

Why does it work?

It works because if it’s costly to set up a client you’ll need to be able to recoup that cost and demonstrate to your client the amount of time, energy and resources you are dedicating to them. It can help you to reduce the cost of your overall offering because you are itemising the setup fee rather than rolling it into the main price which is an example of an itemised pricing model and the price per use effect.

How can you use it?

If you have an ongoing offering then consider charging a separate setup fee to recoup your costs. So long as you explain what the setup involves and depending on your business, it’s quite understood that some offerings have a one time setup fee to get everything started.

You can also choose to publish your joining / setup fee and then offer to discount it if you wish to encourage conversion which is a tactic used by many gyms and other membership offerings.

Example:

A digital marketing agency charges a monthly retainer of £1,200.

They also charge a one-time setup fee of £500, which covers:

Onboarding and goal planning
Competitor and keyword research
Setting up tracking and reporting tools
Initial ad account configuration

Why it works:
The client sees what the setup fee covers, making it feel fair and justified. It also makes the monthly fee look leaner and more focused on delivery. If needed, the agency can offer to waive the setup fee as a limited-time incentive to close the sale.

See also