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Is a Paid-For Community Right for Your Business?

Founder at Customer-ization Madeleine Milne explores whether a paid community could be the right option for your business and community members.
9 min read
Oct 5, 2022

Madeleine Milne

Guest Writer

Communities come in all shapes and sizes, but one of my absolute favorites is the paid-for variety.

In my time running a number of these communities in media, entertainment, and professional services, I found that they can be hugely beneficial for members and businesses alike.

That said, paid-for communities aren't for every business — you need to go in with your eyes wide open and make sure the model fits your specific aims and goals.

What is a 'paid-for community'?

A paid-for community is one where members pay a fee to join and stay within the community.

Payment could be a once-off or monthly/annual membership fee. They might have a free trial or introductory offer, but to gain access to the full offering, there will be a charge at some point for members.

Paid-for communities usually offer a more deeply curated experience and, as a result, give members a feeling of exclusivity, value, and belonging, which is often on a greater level than that provided by their free equivalents.

The pros and cons of having a paid-for community

Is paid the right route for your community? Well, it depends. I'm a massive advocate for paid-for communities, but before you embark on developing your own, there are some pros and cons you need to consider before you decide it is the path for your business:

Pro: Proving community success is more straightforward

The numbers don't lie, especially when it means money in the bank for business.

A 2020 McKinsey survey on memberships and loyalty programs found that members of paid programs are 60% more likely to spend more on the brand after subscribing, while free programs only increase that likelihood by 30% (which is still pretty great, of course).

Another benefit: monetizing your community quickly answers the why of community building for the business. Measuring success will go beyond insights on acquisition, conversion, and engagement to include metrics on revenue generated.

Con: May alienate your core members

I strongly advise that if you think you might charge your community for access at some point down the line, then you should bake this into your strategy and planning from the get-go.

There are ways to do this. For instance, having special discounted rates (even to $0!) or free trials for early adopters. This way, you can “show” a value to the offering from the start (eg, “access to our community usually costs $x, but for this limited time, you can gain access for free”). This gives you the chance to drive engagement and scale — they are getting a good deal after all!

If you are not able to do this, as you have already launched a free offering, you need to make sure you handle the transition with care, so you avoid alienating your early adopters. As with everything community, communication is key! Here are a few ways to make this transition easier for your super-users and early adopters:

Keep communication open and honest: Be transparent about your process, cost, and how it will change how you have historically done things in the community.

Answer the ‘why’ of your transition: Answer your members' questions and tell them why your community is making the transition. You could do this through an AMA session or an event.

Show the value you are adding to the service by making the switch: make sure you are introducing some new features, content, or service to the community once you switch to paid. Make sure your members can see the tangibility of the “upgrade” in terms of level of service or offering.

Make your members feel like they’re part of the process: Don't exclude your existing members. Instead, ask for their opinions and offer them exclusive perks to thank them for their loyalty.

Reach out to your superusers: Set up one-on-one calls with your champions — this is when you'll need them the most. If you get them on your side, they will advocate for your community to everyone else.

Pro: Can add more value for the members

A paid membership should mean more resources for Community Managers, who will then be able to provide a higher level of service and user experience for their members.

Con: Less discoverable and can be tough to incentivize people to join

A hard paywall is a bold move. Since all that lovely engagement and content is hidden from non-members, paid-for offerings are less ‘discoverable’ in their nature. One workaround to this is to introduce tiered or freemium models, which give a taster of what customers will get if they sign up for the complete offering.

This, however, may not be enough: a significant level of overt marketing and promotion is usually also needed to reach and convert your potential audience. Even in the case of free communities, only a percentage of people will want to join.

The need to pay for access is a higher hurdle for your potential (and in established communities, your existing) members to jump. If you do choose to have a hard paywall on your community from the outset, you need to make sure your marketing clearly communicates the value of becoming a member and includes strong testimonials.

Pro: More engagement and less spam

Trolls will hardly pay to join your community. A subscription model almost guarantees you will have less spam, often needing less moderation in the long run, so you can focus on engaging your members.

Don't forget that as well as the financial commitment, your customers are committing emotionally to your brand. As a result, engagement will be significantly higher.

Con: Higher potential churn rate

If you've chosen a subscription-based model, having someone join your community does not guarantee they will stay indefinitely. You need to work hard to keep them, starting with a personalized onboarding experience through to keeping the offering relevant and always staying laser-focused on helping them achieve their goals.

However, there is no getting away from the fact that you will experience churn. Churn is hard to bear for any community, but as it is now directly linked to revenue, it will rise in importance (and pain!) within your business.

How to create a good paid-for community experience

Get to know your members

Don't assume anything. Ask your members questions and have conversations with them. Find out what their issues and frustrations are and work out how you can help them address these. All tips below are true to some degree with free communities, but it's significantly more important for paid-for communities. If you want to benefit from a new revenue stream, you have to make this investment.

At onboarding: Ask your new members what their expectations of your community are and communicate your values.

Every six to 12 months: Check up on them and go on a one-on-one call to find out how they're doing and if they're still enjoying being a part of your community.

Help them succeed: Develop a straightforward customer journey or framework which shows them how they will achieve their goals.

No matter where they are in their journey when they join your community, you need to set a framework, ideally with milestones along the way that are specific to them.

This is also a great way to ensure they don't feel daunted or overwhelmed by the offering. Instead, you'll want them to feel they are making progress in achieving their overall goals, so give them a clear path to that outcome.

Provide value

A good paid-for community gives members a sense of value for money. This usually means that the organization supports the community offering by producing quality resources and content, such as courses, workshops, events, newsletters, blog posts, webinars, and reports.

As a result, most elements of your organization should be involved and on board early in the planning process to develop a united, cohesive strategy around what the value proposition is.

Your brand is inextricably linked to your community offering, so you must ensure that you have the resources and backing in-house to provide the service you can be proud of.

Ensure a personal touch

Remember that there can be a perceived disconnect between your declared business goals and your members' desires. I have never met anyone who says they want to be part of a "big" community. What they are usually looking for from their experience are valuable connections and impactful results.

From a business perspective, you probably want your community to be as large as possible, but it may be wise not to wear that on your sleeve. Be mindful of this when developing your community. Ensure you offer a personal experience to each member (as much as is possible with the resources available to you, of course.) Check in with them regularly, track your data, and ensure you have processes for when members seem to be losing momentum or engagement.

Iterate and develop

You are dealing with humans, and their needs and priorities change over time. They might have joined your community to address one problem, but once they solve that, you'll need to find out if there are other ways the community could help them. If you want them to stay with you for as long as possible, you need to be flexible and develop your offering when needs arise.

At Women on Boards, the community of aspiring board members, we found that after several years, the members had generally achieved their goal of becoming a non-executive. If we had just stopped there, they would probably have left the community as it was becoming less relevant to them. So instead, we developed an offering for members to graduate once they had achieved their first or subsequent board roles.

This was very different from the core offering. It was less about securing board positions and more about effectiveness in those roles and keeping abreast of developments in the board sector.

Is a paid membership the right route for your community? Ultimately, it depends on your business goals and what value your community can offer. If you're reading this post, you're already doing research which is a great starting point. Explore your options and ensure that having a paid-for community actually ticks all the right boxes for your business and your members.

——

Madeleine Milne is a Brand Community Strategist and the Founder of consulting company Customer-ization.

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