The primary goals of building an online community include increasing user engagement, providing better support at reduced costs, building customer loyalty, and converting customers into advocates, etc. However, there are people and organizations who have started to make a fortune out of their online communities by monetizing them. Ever wondered if you can do so too?
5 Ways to Monetize Customer Communities
Community monetization demands the right mindset, proper planning, goal setting, and an integrated platform that serves your community while helping you achieve your business goals. Of course, engaging the audience helps to build, nurture relationships and earn loyalty, but turning it into a source of revenue is tricky. You need to provide your existing members with quality information not only to satisfy their searches but also to encourage them to contribute new content to your community and help recruit others.
You can monetize your community in two ways – direct and indirect – based on your preference and ultimate goal.
Direct Monetization of an Online Community
Every business invests in and grows online communities to get some kind of return on investment, whether it’s in terms of sales leads, brand awareness or online reputation. Regular traffic insight, quick supply of relevant content and a dynamic marketing strategy can help you convert your site traffic into cash flow. Some prerequisites that can help you make the most out of direct monetization is notable site traffic per month, increasing number of subscribers, consistent engagement, and notable recommendations.
Followings are the four major ways to monetize your community directly:
Advertising and Sponsorships
Advertising is the most obvious method of monetization. You can run different ads such as display ads, banner ads, sponsored ads or search advertising with Google AdSense. It largely works for large communities with a very niche focus, which have thousands of unique website visitors or email subscribers per month.
Affiliate marketing is commission-based marketing, a common yet great example of which is Amazon Associates program, in which Amazon provides a referral fee of up to 10% on products you advertise on your site or community. Let’s say you refer to a book on your community, then you can share a specific link through the Amazon Associate program, and Amazon will pay you a certain commission for anyone who clicks on the link and buys the product.
In order to take its benefits to the fullest, you need to partner with targeted suppliers and implement an effective tracking system so you receive credits for the referrals.
Initially, you can offer a free basic membership to your customers to build your community. As it grows, and members continue to interact and seek out more information, you can offer them fee-based premium content, such as case studies, whitepapers or exclusive access to podcasts, webinars, etc. It will keep your members engaged in the community, and provide you with additional revenue.
Cross-selling can be good for a strong community that has amassed a great deal of valuable information from its members. You can market this content to other similar groups to expand your revenue stream beyond your internal membership. Cross-selling benefits both buyers and sellers of different groups from the exchange of money and knowledge. Further, it can also help develop marketing networks, creating new business opportunities for you.
Connection to the offline world – You can promote tickets of any offline event going to be held in a nearby area and connect your members to the offline world. Plus, you will get a commission on every sale you report.
Indirect Monetization of an Online Community
Indirect monetization is where you generate revenue indirectly from your website. As you have a huge database built through your internal members, you can use that data not only to generate revenue but also to drive:
Quick supply of relevant information is the key to customer retention. You need to integrate all your content sources into a centralized database to help members fetch any information in minutes.
Online community with self-service support enhances customer experience as well as cuts down support cost for the company.
You can get new customers by performing a content gap analysis to detect unproductive content or unanswered search queries, and optimize your knowledge base, accordingly.
Since you have thousands of members associated with your community, it must have built an extensive database for you with information like user behavior, demographics, preferences, and more. You can help market research companies by providing them such data.
The success of your online community entirely depends on its scale of engagement and web traffic. You should regularly monitor your traffic, content quality and speed, along with unproductive areas in the knowledge base to drive maximum community engagement and achieve desirable results from the monetization method you’ve chosen.