Modern online organizations are committed to providing their members with valuable content, resources, and opportunities to connect with one another. To continue providing their members with that valuable content, these organizations need to have a reliable source of revenue. This leads to organization leaders wondering how they can most effectively monetize their communities.
With the rise of online influencers and independent creators, the importance of monetizing online content is more highly discussed today than it was even a few years ago. This means that many members of your online community will likely be aware of how monetization ensures your organization’s health, and a significant number of your supporters may be interested in contributing to their favorite online community if given a convenient way to do so.
To help your organization determine your community monetization strategy, this article will first explore the guiding principles behind effective monetization, then dive into seven practical strategies that online communities can use to generate revenue.
At TagFi, our team understands the importance of creating sustainable communities that can sustain themselves financially even with limited resources. To ensure organizations of all sizes are able to monetize their communities, the tips in this guide are scalable and can be applied to both large communities and those run by individual creators.
If you’re familiar with online creators’ merchandise sales, digital advertising, subscription services, and paid members-only content, you likely are aware of the many ways to monetize a community. However, most of these strategies all rely on the same basic set of principles.
Before you can start selling your audience content, you’ll need to know who that audience is, what they value, and what type of monetization strategy they prefer to engage with. Ensure your organization is collecting data about your members and how they interact with one another. Then, you can curate content based on their interests and make informed decisions about your monetization strategy.
Check your member data, and make sure that you’re able to answer the following questions before planning your monetization strategy:
If you find you don’t have clear answers to all of these questions, consider surveying your members to learn more about them. The survey can include direct questions about monetization as well as broader questions, such as how members feel about online advertising in general.
Your community supports your organization because of the valuable content you provide, and your paid content should also have demonstrable value. To help prove to your members that your paid content is worthwhile, make sure to:
Additionally, remember that one of the strongest tools for proving that you have valuable content is the content itself and the subsequent word of mouth marketing that follows after a few members sign up. Content that lives up to the hype will receive positive reviews from members of your community, inspiring those on the fence to sign-up.
Your monetization strategy will determine your sales funnel, and your sales funnel should be as accessible as possible. Ensure that each step towards making a purchase is always easy and straightforward. Essentially, your sales funnel should walk members through the following steps:
Keep in mind that your exact sales funnel will vary depending on your monetization strategy. For example, if you're monetizing through paid memberships and most of your content is behind a paywall, you’ll need to focus on ensuring members are able to learn enough to justify making a purchase. By contrast, merchandise such as apparel is relatively straightforward, and organizations using this strategy will likely benefit more from ensuring their products have positive reviews rather than pointing members to educational or marketing content.
There are many ways to monetize your community, and the strategy you choose should align with both your members’ interests and your organization’s fundraising objectives. You can also use multiple monetization strategies in combination with one another to give your organization more ways to raise funds.
Here are seven strategies to consider using for your community:
One of the most straightforward ways to earn revenue for an online community is to create tiered memberships. To join your organization, members pay a recurring fee—usually on a monthly basis—based on the level of content they have access to.
To keep your members satisfied, ensure each level of your membership program offers users enough content that they will feel it’s worth the price tag. However, also consider how you can strategically limit content for lower membership tiers to encourage members to upgrade.
Keep in mind that if your base membership comes with a fee, prospective members have a high barrier to entry as they will need to pay to even see what content you have to offer. TagFi’s recommended open-door strategy solves this problem by advising organizations to make some of their content freely available. This approach allows you to show members exactly what your community has to offer and how it’s valuable.
Gaining more members through an initial free membership plan builds your overall audience and increases the likelihood of attracting individuals who are interested in upgrading their membership tier.
Partnering with sponsorships and advertisers is an incredibly common monetization strategy. Connect with businesses related to your online community to ensure that your sponsorships provide value to your members and forge a healthy partnership with your sponsors.
Communities partnering with sponsors usually follow one of two monetization strategies, or in some cases, both:
Additionally, communities can use software with a marketplace feature to host and promote sponsors on their website. This method keeps members within your community’s ecosystem, while also directing traffic directly to your sponsors, who share a percentage of their revenue with your organization.
Selling branded merchandise is popular among a variety of online communities, from nonprofits to social media influencers. This merchandise can be the usual popular products such as t-shirts and mugs, but your organization can also get creative and offer your community unique products that align with your overall values and offerings. Here are a few types of merchandise to consider selling:
To keep your merchandise store profitable in the long-term, regularly consider what new products you can add to it to interest members who already bought their favorites from your first line of products. This might include new designs or offering bundle deals on older items to make room for your new stock.
As mentioned, some online community software solutions like TagFi allow organizations to partner with businesses to set up an online marketplace. Instead of directing members to your sponsors’ websites, businesses can instead sell their products directly through your website.
This reassures your members that these businesses are trustworthy and makes the entire transaction process shorter as they can make their purchase on one website. In exchange, your organization receives a portion of the proceeds to help fund your community.
By using a community hosting software with marketplace features like TagFi, you can create:
Fostering an active marketplace can help you maintain long-term financial health as your sponsors cover many upfront costs associated with selling and promoting products, such as ad creation, product development, and shipping. Your organization simply helps put them in contact with your audience and can rely on a steady stream of revenue for hosting them on your website.
Hosting ticketed events can help your organization provide your members with valuable opportunities, while also earning additional revenue and potentially attracting new supporters. Plus, for organizations with paid membership tier systems, you can drive event attendance and provide paid members with more value by offering them discounts, priority seating, or a number of other event-related benefits.
When creating your event calendar, consider how you can vary your offerings to encourage all of your members to get involved. For example, most of your events will likely relate directly to your organization’s core content, whether it’s live lectures, networking events, or webinars. But you might also offer a few events focused on community and having an enjoyable evening, such as galas, concerts, and community picnics.
Be sure to vary your event format to ensure your events are accessible for everyone. Some of your members may live in remote locations or just prefer to attend events from home. For these members, provide a selection of virtual and hybrid events in addition to your in-person opportunities. This will help all of your members, no matter if they're next door or hours away.
In contrast to paid membership tiers where membership fees cover all content, organizations can make a portion of their content freely available and offer select paid content. As this content needs to be bought separately, ensure that it has clear value and can enhance your members’ experiences.
Many online communities offer additional paid content such as:
If you want to offer your community both paid memberships and select paid content, you can combine the approaches by creating a paid membership program and offering some content with its own price tags. To offset these multiple charges, you can provide higher tier members a discount on your paid content.
Nonprofit organizations looking to monetize their communities can ask for donations online. To make giving as easy for supporters as possible, these organizations should include a donation page on their website and use web design practices to drive their community members towards it.
Here are a few tactics they can use to encourage online giving:
Ensure that your nonprofit’s donation form is branded to your organization and can be embedded into your website. This keeps your supporters on your website throughout the entire donation process, making them feel more secure about where their donation is going and thus more comfortable making it.
Monetizing your community is essential to your organization’s continuous success, and when it’s well-thought out, your monetization strategy can be just as beneficial to your members as it is to your organization. Give your members opportunities to spend their money that provide them with the most value possible to help engage and retain them long-term.
Stay up to date with your community to understand their wants, desires, and needs when it comes to monetization, and get creative with your strategy to find an approach that works for you.
To help your organization learn more about your members and how to connect with them, check out these resources on maintaining an effective, engaged community: