The role online communities play in our lives changed a lot over the past decade. From the widespread adoption of social media platforms to being connected anywhere via our smartphones, most of us are experiencing “community” online in some form or another.
And beyond the Facebook group or the Twitter feed, communities are also becoming big businesses in the creator economy. In some cases, this is because communities are being added to digital products, for example, that online course you bought that comes with a community you can join or the software support forum you browse for when you’re stuck.
But online communities aren’t just add-ons for other products. We're also seeing a productization of online communities in their own right. This means a flipped business model, where communities are no longer an add-on to a different product. Instead, communities are the central core of many online businesses, and the traditional digital products like courses or webinars are the bonuses to the main benefit of belonging in the community.
And community business models work. They tap into who we are as humans, helping us build connections and friendships. They have incredible potential to transform your online business.
In this article, we'll talk about some of the realities of creating an online community business. Using the strategies here, you can take your community from non-existent to a powerful, profitable business that either supplements your day job or replaces it. Here are five secrets to creating a successful online community business.
If you want more support in building your online community, come join OUR Mighty Community for free and meet other new and established community owners! We’d love to meet you. Join for free!
1. Have an ideal member
When we see an online community business that's struggling, we can often pinpoint the lack of clear membership focus as a major problem. Communities that try to be all things to all people don't work as well. In fact, some of our most successful communities built on Mighty Networks have an incredibly tight niche. Teaching people how to bullet journal. Bringing together finance professionals in the United Kingdom. Creating a space for youth ministers to share ideas.
These are the kind of clear niches that million-dollar communities are built on, rather than catch-all, generic brands that serve nobody.
If you're going through the work of identifying or clarifying who your community is for, we teach a discovery process that we call Community Design™. And one of the first steps we take with it is to identify your ideal member.
If you want your community to be a viable business, don't just guess who your ideal member is. Set up 15 to 20 conversations with people who you think might fit. Ask them questions about their goals and, most importantly, see if your community can help them with something they would be willing to pay for!
Once you have done this, you can create what we call a big purpose statement. Your big purpose statement looks like this:
Psst We have a training on finding your Big Purpose FREE in our Mighty Community!
2. Validate the business with sales
One of the best ways to validate any online business is with sales. Ask anyone who’s done the work to build an online product and they’ll tell you that many people will say, “Oh yeah, that’s a great idea!” But it doesn’t mean they’ll buy.
If you can presell something, you know that it’s ACTUALLY a viable product. And while it can be intimidating to presell, it’s worth it if you can sell some in advance to validate the idea.
Depending on your membership structure, can you presell your online community? If you’re doing the interviews, and you have a really clear sense of who your “ideal member” is, try it! It could be as simple as letting your ideal members know that they can pre-purchase community membership before a defined launch date.
3. Get the pricing right
Pricing is notoriously difficult no matter which business you're in, and pricing an online community is no different. It's tough to know what works initially, and there will be a certain amount of trial and error. For reference, the communities that run on Mighty Networks have an average price of $39.55 a month. This number can be a good place to start, but it's by no means set in stone.
When you think about pricing structure, think about how you want to deliver value. Are you only running a community? Do you want to upsell into a course, virtual event, or high ticket mastermind group?
The platform we've built lets you monetize with about a dozen different combinations. Some people choose to keep membership costs low for their community, making it up on the other end from course sales. Some go in the other direction, charging a higher monthly membership fee and including everything. Some charge a high membership fee and also charge for a high-ticket course! There is no single way to do it.
BUT, having said this, don't be afraid to charge something. People will get much more out of your community if they pay enough to value it. And you can bring a lot more value if you are not completely broke and trying to work a day job to keep your community afloat.
It's much easier to have 100 members paying $40/mo than to desperately be trying to get 1000 people paying $4 a month to make the same amount.
4. Watch your churn
One of the greatest parts of creating an online community business is the monthly recurring revenue. MRR is a holy grail in business. It's why pretty much every single company you know is switching to a membership or subscription model.
But if you want to run a successful MRR business, the goal is not simply to get people in. You need to keep them there long enough to make it worth it. Especially if you are spending a lot of time and money on customer acquisition channels.
Don't just pay attention to how many join your community each month. Watch closely how many are leaving. This is called membership churn. And getting your churn lower is just as important as getting your acquisition higher.
Make sure you are delivering value to your members.
- Measure it.
- Do interviews or surveys to make sure people are happy.
- Consider doing exit interviews with the people who leave–if you can. (Just ask for some honest feedback.)
- Figure out which parts of the community they love the most and do more of those things.
- Stop spending your energy on things that people don't care about.
All of these things are ways to reduce churn, and this is vital to the lifeblood of your community business.
5. Pick the right platform
It shouldn't come as a huge surprise that here at Mighty Networks we think a lot about creating the very best possible platform for an online community. The reality of any online business is that your success will, to some extent, be tied to the decisions you make about your software.
Research shows how powerful small user experience changes can be for an online business. We know that making the checkout process less complicated leads to more sales, for example. We know that adding a community to a course leads to higher completion rates since people have the ability to stay accountable and engaged. We know that adding an app makes it way easier to access your online community.
For all these reasons and more, the online community-building platform you choose matters. And for what it's worth, we built an amazing all-in-one that will do everything you want to run a great community, without needing any other programs.
Don't take our word for it. You can try it for free, no credit card required.