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13 Steps to Building and Monetizing an Online Community

Kristen Hicks
Jul 21, 2021 11:30:37 AM

Community is valuable. Bringing people together who share common values, hobbies, or interests can provide benefits for everyone involved. But creating an online community and building it to the point where it offers that value is work. For anyone putting that work into a community, you need to figure out how to translate that value into actual dollars.

If you’ve already done the work of building an active community, then you’re in a strong position to start thinking about monetizing it. There are a lot of different paths you can take to make your community into something profitable—without risking its value to members.

4 Steps to Take Before You Monetize

Before you take steps to start monetizing your online community, you want to make sure you’re ready for the transition.

1. Start with (and keep providing) great content

People have to find your community valuable enough to engage with before it makes sense to monetize. To provide that value, make sure you’re creating useful content relevant to their interests.

Tal Shelef, Co-founder of CondoWizard, explains that “users are more willing to support businesses that offer value to their lives.” To be that business for them, “offer educational content about the niche you are in. If you are into beauty, then teach makeup. If you're into sneakers, then give them weekly news about recent trends.”

By showing your willingness to help them before you start selling to them, you develop a relationship that builds trust. Then when the time comes for a sales pitch, you won’t seem like a slimy salesperson.

2. Make sure your audience is well defined

Part of what makes a community valuable to its members is that they share something in common that makes it easy to relate. That’s valuable to you too, because knowing who your audience is makes it easier to create content (and sell products) that are relevant to their interests.

“Define your dream customers,” suggests Ashley Taylor, founder of Build Your Empire University, “know them inside out and make every piece of content with their success in mind.”

3. Make sure your audience is big enough

No matter what monetization method you choose, your community needs enough members for you to make money from it. But figuring out how big is big enough is a complicated question—and different experts offer different guidelines for this.

Sergei Belous, Founder and CEO of UpFlip says “You don’t need a large community to start monetizing. It really depends on your niche and how dedicated your following is. In some segments, you can monetize a community as small as 100 people.”

In contrast, Eden Cheng of WeInvoice suggests that “your community needs hundreds if not thousands of visitors each month for you to even be able to monetize it.”

Answers vary because the truth is it really depends on you and your business model. Michael Knight, Co-Founder and Head of Marketing at Incorporation Insight, advises that size should be “determined by your overhead and the amount of revenue you desire. If you have 20 people in your community who pay you $5 per month for membership and your business can survive on that income while still turning a profit, that is the right size for you.”

4. Make sure your audience is engaged

Size matters, but it’s not the only measure to consider when weighing if your community is ready to monetize. “While you do need a sizable and strong community base to effectively deploy a monetization strategy, the first focus should be on gauging the community’s level of engagement and satisfaction,” recommends Stepheni Hass, Director of Marketing Operations for Formulatedby.

Engagement can take a number of different forms. Monica Lent, who runs the Blogging for Devs Pro community says “You have to show up every single day to form connections, facilitate discussions, or even bring up topics people don't yet know are relevant for their goals.” And to make sure people keep coming back to your community, she suggests using email digests and newsletters to remind people to re-engage.

Sid Bharath, CEO and Founder of Broca encourages getting conversations started by “seeding conversations with questions to kickstart discussions.” Do the work to get conversations started and help give members topics to think about and questions to answer.

But don’t forget that the point of community is helping others connect to each other. Andrew Latham, the Managing Editor of SuperMoney, points out “The human need to be needed and help others is underrated. Help your members find ways to provide real value to others,” he urges. “People will engage and give of their time and resources if they truly feel their contribution is valued.”

8 Ways to Make Money from an Online Community

Once you’re confident that you’re ready to start making money, you need to figure out how to start monetizing. There are a few main methods to consider.

1. Run ads

One of the easiest ways to start monetizing your online community is by running ads on it. Jeff Neal of CritterFam started monetizing their community of over 8,000 reptile owners in part by running Adsense ads.

But Adsense is just one option. According to Belous, you can find an ad network to partner with. “Adthrive is one example that’s been beneficial for us.” Or, put it right on your site that you accept advertisements “so anyone who’s interested in purchasing ad space can do so easily.”

Knight suggests a third option of going straight to relevant companies. “Locate companies in your niche that are willing to pay you to sell their products to members of your online community.”

2. Charge for membership

Another way to monetize is by creating a paid membership level to your community. Michael Keenan, Co-founder of Peak Freelance uses this method. “Members pay a monthly or yearly fee and get access to on-demand tools, content, bi-weekly strategy calls, and a private Slack group.”

With this monetization strategy, you have to make sure you’re providing enough value to be worth the cost. “Offer content that members cannot find anywhere else,” Keenan suggests. And provide unique opportunities. “In Peak Freelance, we also set up 1:1 calls between members so they can meet each other and hang out virtually.”

3. Charge for sponsored content

Brands work hard to try to reach specific audiences, and getting people’s attention online is an uphill battle. Building a community means you already have an audience in place, one that many brands will want to reach. You can leverage that by charging brands for sponsored content. Janice Wald of Mostly Blogging built up her website’s domain authority, and now “people offer me money to publish their content.”

As long as you mark it clearly and make sure it’s useful to your audience, sponsored content is a win-win. You get paid to post it, and you get more valuable content to share with your community. But making sure the sponsored content is right for your audience is important here. Content Strategist Jodie Coher explains, “Make your sales posts as natural and consistent with your other posts as possible.” You want them to be a fit with everything else you post.

4. Sell products to your community members

If you already have a business, or have ideas for relevant products, you don’t need to be the middleman for advertisers. You can sell your own products to your community. Anatolii Ulitovskyi, the founder of SEOtools.TV has used multiple monetization methods, and says selling products to the community is by far the most profitable.

“I tried... paid ads (YouTube), referral links, and selling products. In my case, paid ads provide 1x revenue, referral - 10x, my products - 100x” he says.

But for selling products to your community to make sense, you have to make sure the products you’re selling match the audience you’ve developed. “Make sure that what you are selling to your community is in some way relevant, or at least not offensive to the community you are building,” advises Thomas Fullz, CEO and Founder of Coffeeble.

5. Do affiliate marketing

“Once you grow a good audience, you can affiliate sales by collaborating with other businesses,” says Christian Velitchkov, Co-founder for Twiz LLC. Affiliate marketing is a form of advertising where, instead of getting paid simply to run an ad on your site, you get a share of the profits every time one of your members makes a purchase.

It makes the most sense for products that you’re confident your members will be interested in. If you’re helping match your audience with a type of product they need, you’ll provide value to both the community and the business you partner with, while making a profit for yourself at the same time.

6. Provide exclusive content to paid subscribers

“As websites like Patreon have shown us,” says Saksham Sharda, CIO of Outgrow, “a simple way of monetizing a community is by exclusivizing a part, but not the entirety, of your service.” That could mean creating courses and training modules for paying members of the community, or providing additional content similar to what you offer for free to paying subscribers (such as special podcast episodes or newsletters).

Community members that love your free content will often be willing to pay extra to receive exclusive content as well. But you have to make sure that the paid content packs enough value to be worth the price tag to your members.

7. Organize events

Events double both as a way to bring your community closer, and an opportunity to generate more income. “You can organize small meet-ups that bring certain attendees in your community together and let them interact in person around a topic that matters to them,” says Cheng. Charge a fee for attending, and you have a new income stream. Or to make the events go even further, you can use them to “market products and merchandise by outreaching to third-party brands and retailers that may be interested in selling their products to your community.”

If smaller events take off, you can consider upgrading over time to something larger, like a conference.

8. Sell merchandise

A devoted community will often be glad to wear their membership on their sleeve (literally, in some cases). “A fantastic way for creators to monetize their community is through selling merchandise,” says Bryan Philips, Head of Marketing for InMotion Marketing. “This can be nearly anything done with your distinct brand, based on what kind of community you have built. From shirts, to coffee mugs to make up kits, merchandise is one of the best ways to convert viewers to consumers.”

Merchandise can be as simple as adding your logo to some t-shirts and mugs, or it can be an opportunity to reference in-jokes that community members will understand and relate to. It gives you a way to make some extra profit, and your members a way to feel that much more like they belong.

...And One Thing to Avoid to Keep Your Community Thriving

Don’t be too pushy

When people join a free community, it’s to make connections. They’re not necessarily in the purchasing mindset. That means you have to be careful when you start monetizing. “If you start pushing products or sales really hard, you can turn some of the community away quite quickly,” warns CEO and Founder Alex Magnin.

If members feel like your community went from being all about connection and information to suddenly being all about sales, you could lose what made the space valuable to begin with. Whatever monetization strategy you choose, make sure it’s a natural fit for the community you’ve built and that what you’re selling is something they’ll want.

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