How to Monetize Your Community: 7 Practical Strategies

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. 

Explore how you can monetize your community with TagFi. Learn more.
The Guiding Principles of Effective Community Monetization 

The Guiding Principles of Effective Community Monetization 

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. 

There are three core principles for monetizing your community.

Define your audience. 

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: 

  • What does your audience need? What types of content does your audience need and expect from your organization? Essentially, what value does your content bring them and what makes it unique? Your answer to this question can vary wildly from your more casual members simply wanting access to more of the same type of content they initially signed up for, to more passionate fans of your organization who may be interested in merchandise and behind-the-scenes extras like Q&A sessions or office tours. 
  • Does your audience have any obstacles to purchasing content? While the obvious answer to this question might be the cost, digging deeper can help you determine what content format will be the most convenient for your members to engage with. For example, if you have many remote members, monetized content based on in-person events and activities likely won’t appeal to them. 
  • Is your community big enough? Some types of community monetization come with a greater initial start-up cost than others, and small organizations might find it difficult to make up the return on their investment. Additionally, some types of monetization are explicitly tied to the size of your community, such as third-party advertisers who want to be sure their products are put in front of as many people as possible. 

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. 

Generate valuable content.

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: 

  • Market your content. Your marketing messages are your first and strongest tool for proving that your paid content is valuable. Determine your value proposition, which is essentially what your paid content is and how it will benefit your audience. Then, tailor your marketing to emphasize this, while also highlighting any other necessary or attention-grabbing details.
  • Offer select free content. Starting with an open-door strategy by providing free publicly available content can help attract a wide initial audience. This lowers the barrier to entry for potential paid-members, as they’ll understand and be able to engage with the exact type of content that your organization offers. 
  • Provide free-trials. Similar to providing a few pieces of free content, free-trials allow access to all your organization has to offer but only for a limited amount of time. Be thoughtful about the window of time you give members, as those who only need access for a short period of time may be content to let their free-trials lapse without taking additional action to become a permanent member. 

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. 

Create an accessible sales funnel. 

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: 

Consider your membership funnel when monetizing your community.
  1. Community members first hear about your organization. The first stage is about awareness as members become aware of your organization and your content. A potential community member might see your marketing materials on social media or Google a keyword related to your organization and discover your website. 
  1. Community members learn more. Curious members will take steps to learn more about your organization and content. This might include engaging with content you have freely available, reading reviews, or even interacting with currently paying members. During this stage, community members might also compare your organization’s offerings to similar groups. 
  1. The community member makes a purchase. After gathering information, members will decide if they want to make a purchase. Those who do will visit your product page. At this stage, you should focus on streamlining the buying process as much as possible to prevent cart abandonment. 
  1. The community member becomes an advocate for your organization. Community members who have purchased your content and are happy with it may then promote your organization to other potential members. This part of the sales funnel relies on having valuable content that can help generate positive word-of-mouth marketing. 

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. 

Monetizing Your Community: 7 Strategies 

Monetizing Your Community: 7 Strategies 

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: 

Create paid membership tiers to monetize your community.

1. Create paid membership tiers. 

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. 

Partner with sponsors to monetize your community.

2. Partner with sponsors. 

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:

  1. Sponsored posts. Sponsored posts and on-site advertising give sponsors a chance to get their marketing messages in front of your community members. Essentially, when a community member is looking through messages and content from your organization, they’ll occasionally see a sponsored post from one of your partners. When used alongside a relatively high amount of content, this approach is relatively unobtrusive to your members. 
  1. Affiliate marketing. Affiliate marketing provides your organization with a cut of profits each time your members buy from your sponsors. This approach incentivizes your organization to promote your sponsors as much as possible as you only make revenue when they make purchases. 

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. 

Sell merchandise to monetize your community.

3. Sell merchandise. 

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:

  • Apparel. T-shirts, hoodies, hats, wrist bands, masks, and anything else you can wear are standard but popular merchandise items. Get creative about how you incorporate your community’s brand and identity into your apparel items. Resist the temptation to just add your logo to a t-shirt and call it a day. Instead, use your core brand elements as jumping off points to create unique merchandise that appeals to your specific audience. 
  • Physical products. Outside of apparel, there are a number of other popular merchandise staples from mugs and water bottles to lower cost items, such as magnets, keychains, and stickers. These products can be combined with one another or with apparel to create packages for members to purchase. 
  • Organization specific merchandise. Some online communities centered around specific interests, hobbies, and needs can create successful merchandise lines of organization-specific items. For example, an online community centered around gardening might sell high-quality gardening supplies with their organization’s branding. Or, an environmental-focused nonprofit organization might sell calendars with photographs of nature.

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. 

Monetize your community by creating a marketplace.

4. Create a marketplace. 

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:

  • Business profiles. When sponsors join your organization, they will have special profiles that mark them as businesses. Members can then search for them in your directory and browse their profiles to learn more about their products and services. 
  • Products and services marketplaces. Your marketplace can give members even more value by providing them access to a variety of products and services for easy online purchase from your sponsors. This can be especially useful for community organizations that want to spotlight local businesses who may otherwise have a limited web presence. 
  • Ads and sponsorships. You can promote your marketplace with ads and sponsored posts. As members browse content on your platform, they will occasionally interact with ads encouraging them to check out specific products or letting them know about any ongoing special offers. 

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. 

Try hosting events to monetize your community.

5. Host events. 

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. 

You can monetize your online community by offering paid content.

6. Offer paid content. 

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:

  • Courses. Training programs from recorded lectures to live interactive sessions can help your members gain valuable skills that can advance their careers, help them earn certificates, or simply expand their knowledge. Creating courses does come with its own startup costs and time commitments as you’ll need to design and facilitate these learning opportunities. 
  • eBooks. If your organization has a lot of documentation, research, tips, or other assembled information, consider putting it together to create an eBook. What makes an eBook valuable will depend on your members, but many organizations that conduct extensive surveys and statistics reports use eBooks as a way to fund their premium research projects. 
  • Exclusive articles and videos. Following the open-door approach, your organization can simply choose to make select content available for purchase, while offering the majority of your content for free. For example, many individual online creators monetize their communities by creating exclusive behind-the-scenes content, bonus content, or even offering early releases at an extra cost. 

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. 

Nonprofits can monetize their communities by collecting donations.

7. Collect donations.

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:

  • Bold design choices. A nonprofit’s donation button should always be visible at just a glance. Many organizations use bright and contrasting colors to draw attention to their donation buttons, or even add little animations when supporters hover over it to help draw the eye. Add your donation button to your website’s heading or navigation bar so supporters can easily navigate to it whether they are ready to donate. 
  • Demonstrating impact. Your donation page should make it clear how each donation helps your organization. Provide examples to help supporters envision how your organization will use their contribution. For example, a nonprofit that helps low-income families might share that a donation of $100 will provide school supplies for five students. Also, consider adding pictures of your organization at work to help provide supporters with a visual of how you aid beneficiaries. 
  • Recurring donation options. Recurring donations provide organizations with reliable monthly revenue. On your donation page, allow supporters to easily opt-in to your recurring donation program with just a few clicks. Some organizations even place their one-time and recurring donation requested amounts alongside each other to help persuade supporters into making a lower recurring gift that will add up over time. 

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. 

Wrap Up

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: 

Check out TagFi's approach to community monetization and learn how your organization an get started. Get started with TagFi.