- 3. Not all paid memberships are born the same
Buying memberships at PTC sites is always a must when you have rented referrals. It is often the only way to make profit, as free memberships usually give you low value per each click. However, when using them when you only have RR, you must include the membership cost in the BEP calculations. Using yearly paid memberships, the expression becomes:
BEP=[Referral Price * (1-%Discount) + Membership cost / (365 * Nr referrals)] / Earning per each referral click
Paying for the membership will increase your BEP, but from this expression you can see that the higher the number of referrals, the smaller the effect of the membership cost on your BEP (since that cost is divided by a bigger number of referrals).
When it come to RR, more expensive memberships can usually benefit you in two ways.
- Higher earning per each referral click - The benefit is obvious
- Higher upper limits for renting referrals - The more you rent, the lower the burden of the membership cost.
But the most expensive membership may not be the best for your BEP. Pay special attention when two paid memberships have the same earning per referral click and differ only in maximum number of rented referrals.
For example, let's say Mr R. was looking around Twickerz thinking what membership he should choose. He compared two memberships, Gold Plus and Platinum. The first one, costing $250 a year, had a limit of 2000 rented referrals. The second, costing $500, had a limit of 2500 RR. RR earnings was $0.01 per eack click and base renting cost was $0.27 per month. Using 720 days extension (40% discount), and renting the maximum amount of RR each membership allowed, he calculated the following:
- Gold Plus with 2000RR - BEP = 0.574
- Platinum with 2500RR - BEP = 0.595
In this case, the higher number of referrals was not enough to offset the higher cost of the Platinum membership. Of course this membership had other advantages, like free replacement of inactive referrals that don't click for 7 days (vs 9 days in Gold Plus). But BEP remains calculation remains one of the most important factors.
But can you still get higher profits with lower BEP? You can, depending of the BEP diference and expected referral averages. The daily profit can de given by the expression Profit=(RR Average - BEP)*Nr referrals*Referral click rate
If the referral average was 0.73:
- Gold Plus scenario - Daily Profit = $3.12
- Platinum scenario - Daily Profit = $3.37
Platinum was slightly more profitable, but you had to invest over 25% more.
With a more realistic average of 0.65 (taken from other members' data).
- Gold Plus scenario - Daily Profit = $1.52
- Platinum scenario - Daily Profit = $1.37
The expected earnings were actually higher in the cheapest option.
Be sure to make your maths when selecting memberships