The price of everything and the value of nothing
If you want to charge for access to your community, don’t be Oscar Wilde’s fool. Before you try setting the pricing, make sure you’re offering real value to your members. Otherwise, why would they sign up? Value, however, can be elusive and subjective. Something that has real worth for me might not necessarily have any value to you. This goes to the heart of who your community is for and what members would value most. What outcome are they seeking? Is it about a passion for something or a particular goal they want to reach? Is there a pain point they are currently grappling with? And what’s the consequence for them if they don’t reach their goal or eliminate this pain point? Communities which are crystal clear on the needs and wants of their actual or potential members are much more likely to a) be able to charge more and b) be successful.
Only after you have reached this level of clarity should you move on to the practicalities of your offering and the range of prices you might consider. We break this into three community types and the resulting fee ranges:
The Enthusiast Community – low price
This type of community is for people who are passionate about a certain topic/ product/ service and want to meet other like-minded people. Perhaps they want to feel connected to the brand, learn more, or talk with others about it. Generally, this is for their own personal interest and the connections they can make with others. It’s not necessarily going to change their life in any significant way, so you won’t be able to charge big bucks. A good example is the Harley Davison Owners Group (£100 p.a.) – people are passionate about their bikes and they want to meet other Harley owners. They are willing to pay for access to the group as they recognise there’s a cost to running it, but it’s seen more as a contribution to running the community than anything else.
Access Community – mid-range price
Your community offers information, insights or connections that members can’t get elsewhere. This has value for people who want this special access and if it’s genuinely useful to them, they are willing to pay rather more. A good example is LinkedIn. Yes you can use the free version, but if you pay to be a premium member (£215 p.a.) you get better functionality and the ability to connect with more people. This is important for individuals who want to build their network/ develop their career or find a new role.
Transformation community – mid – high price range
Your community has a level of accountability associated with it. Members expect to achieve results by being part of your community. Perhaps they want to change careers, learn a new skill, get fit, or lose weight. Generally, with these communities there is a process to go through, a programme perhaps. People will perceive greater value here, as they recognise that there is a clear transformation involved. They will get better at something, reach their goal or solve a problem. Their assessment of how effective they think your community will be in getting them there will determine how much you can charge. An example of this might be Female Entrepreneurs Association (£948 p.a.) It’s clear who the community is for – female entrepreneurs. Members need to follow a clear programme of activity to build a successful business (accountability). They get connections, resources and content, and the sales pitch is that, overall, members will become more successful entrepreneurs as a result of being part of the community.
Of course, working out which range you belong on isn’t the end of the process: you need to follow standard business processes of benchmarking against competitors, getting feedback on your offering from potential and existing members and then, of course, price testing.
Click Worthy Content
Gareth Wilson has shared yet another excellent case study for us to enjoy, this time around the growth of design tool, Canva. Another must read for anyone community curious.
If you want to hear what community professionals have to say about some of the more famous communities out there then why not watch the Community Dissection series hosted by the brilliant Bri Leever. Each time she is joined by other community professionals and together they talk through the good and the bad of various community offerings.
Hugh Pontikis wrote a thoughtful piece about the culture of communities and reflects on the need for clear values and practices.
This newsletter is brought to you by www.customer-ization.com. We work with B2C brands to activate and empower customer communities to deliver growth, retention and satisfaction. To find out more why not book a call to explore how we can help you harness your customers’ enthusiasm and achieve a step change in your business outcomes.