Methods to Monetize Your Community
I started a duct-tape wallet business in 3rd grade. Maybe you did something similar as a kid.
How much did I charge?
It varied depending on how I was feeling that day.
My close friends got the "best friend discount" = $5/wallet.
But the other kids who heard about it and wanted one too, they had to pay up. I think I may have charged $20 for a wallet at one point. Yikes. I do feel bad for both that kid and his parents who funded his new, lucrative, appreciating asset.
Kid business aside, most founders I work with have no idea how much to charge for their communities.
Their core group members often get the "best friend discounts." But their network's network get the $20-duct-tape-wallet price.
In short, not every community should be charging what they are for their communities.
Some should be charging much more.
And it shouldn't be a decision that you make on a whim. It's an informed decision that demands relevant data, competitive analysis, and business strategy.
3 Methods of Monetization
For starters, every monetized community needs to be ready to monetize. If you missed last week’s article on “Preparing your Community for Monetization” – I’d start there first.
Once you feel ready to monetize, there are a few different ways you can do so. And there are more ways than what I’ve outlined here, but these are the most common methods I’ve seen:
There are pros and cons to each method as you can see. Most often, I suggest the subscription model for most business-related communities, while the Free with Upsells communities can also be the right fit in some cases.
That being said, there are also different kinds of revenue streams you can pursue within these monetization methods as well.
Potential Paths to Monetizing Communities
Membership Tiers
Free Membership to Paid Products:
Start with free access to basic content and community features.
Upsell premium content, tools, or services to engaged members.
Example: A free community for business tips that upsells exclusive courses and templates.
Low Ticket to High Ticket:
Offer a low-cost entry tier to attract new members. Upsell higher-cost memberships with additional benefits (i.e. personalized coaching)
Example: A $20/mo basic membership upselling to a $150/mo mastermind group
Consulting Fees
Offer personalized consulting or coaching services to community members.
Leverage your expertise and the trust built within the community.
Example: Business consultants providing 1:1 sessions
Paywall with Tiered Access:
Different membership levels with varying access to content and benefits.
Create scarcity and exclusivity for higher tiers.
Demands right software like Circle/Mighty Networks to make this happen.
Example: Basic, Premium, and VIP memberships with escalating access and perks.
Events and Workshops
Host paid virtual or in-person events, webinars, and workshops.
Provide additional value through expert sessions, networking opportunities, and hands-on learning.
Example: Monthly webinars on advanced topics available only to paid members.
Courses and Digital Products
Create and sell courses, e-books, templates, and other digital products.
Use the community to understand the needs and tailor products accordingly.
Example: A design community selling monthly design templates and tutorial videos.
Affiliate Marketing
Partner with relevant brands and promote their products to your community.
Earn commissions on sales generated through your affiliate links.
Example: A gardening community promoting gardening tools and supplies through affiliate links.
Exclusive Content
Offer exclusive content like bonus episodes for podcasts, newsletters, research reports, etc.
Ensure the content is high-value and tailored to the community’s interests.
Example: A financial advice community offering exclusive market analysis and investment tips.
Customize Your Pricing Plan to Your Members
To avoid the “duct-tape wallet” pricing model, I suggest finding the answer to this question: What would your community pay for?
The best way to find out? Market research. You need to determine what price point would make the most sense for your audience. We’re not all going to make money like Hampton. Instead, you need to determine what price would both:
Work for your business needs.
Work for your members.
I suggest getting feedback by sending a survey to some of your core group to gauge:
What communities they already belong to
How much they pay for access to those communities
Which features have the most value attached to them
What they believe would be a fair amount given the features offered
Member Lifecycle & Billing Frequency
Determining how much you charge should be reflected by your MLV (member lifetime value). If you expect someone to "graduate" from your community after 6 months, accommodate your pricing to fit that timeline.
If you want them to pay forever, that belief is misguided. A community isn’t a SaaS product. It isn’t a Netflix subscription. It’s a product that offers transformation. Remember: your community exists to serve your members; not the other way around.
Communities help us to become better versions of ourselves (aka. transformation). For some communities, that desired “transformation” may take 3 weeks (i.e. a RevOps Cohort) while others may take 3 years (i.e. Group counseling for those navigating traumatic loss).
In short, build the billing frequency around how long you believe the journey to transformation will take. In the coming weeks ahead, I'll write more on the subject of a "Member Journey" which will immensely help you to clarify this.
My Monetization Strategy:
Total Revenue Goal: $___
[Type of Monetization: Free, Subscription, One-time]
[Paths to monetization: i.e. charging for one-time events; or paywall with tiered access]
Ideal price/member: $___
Pricing Frequency: ___
How many members would you need for it to be worth your time: ___
Anyone can make a monetization strategy. You need to make sure yours works. Next week, we’ll be diving into the common pitfalls of community monetization where I’ll dive into lessons learned the hard way.
