What is a Community Business Model?

Building an online community is no small feat. There's a lot that goes into it, from coming up with the initial idea to growing and engagement and everything in between. But one of the most important—and often overlooked—aspects of community building is creating a business model that will ensure your community is sustainable in the long run. 

There are a few different business models you can choose from, and which one you ultimately decide on will depend on a number of factors, including your goals for the community, the needs of your members, and the types of relationships you want to foster. In this blog post, we'll take a look at three of the most popular community business models and how you can decide which one is right for you.

The Freemium Model

The freemium model is perhaps the most well-known (and widely used) community business model. Essentially, it involves offering a basic version of your community for free while charging for premium features or access. 

This model works well for communities that offer content or resources that can be delivered digitally (such as online courses, e-books, or software). It's also a good option if you're looking to build a large community quickly, as the low barrier to entry (i.e., free membership) means more people are likely to join. However, it's important to note that this model typically requires a significant amount of upfront investment to develop the content or resources needed to offer a comprehensive free version of your community. 

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The Subscription Model

Another popular option is the subscription model, which involves charging members a recurring fee (usually monthly or annually) for access to your community. This could be in the form of an online forum, exclusive content or resources, early access to new products or features, access to experts or mentors, or anything else that would add value for your members. 

This model works well if you're looking to create a more exclusive or intimate community where members are willing to pay for high-quality content and/or services. It's also less reliant on advertising revenue than other models, which can make it more sustainable in the long run. However, it's important to make sure you're offering enough value to justify the price point—if not, people will simply cancel their subscription and move on. 

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Advertisement Model

In this model, businesses allow advertisements from third-party companies within their community space in exchange for a fee. This could take the form of banner ads, sponsored posts or articles, display advertising, or any other type of promotion that would be relevant to your community members. 

One advantage of this model is that it doesn't require much (if any) upfront investment since you're not developing any new content or resources yourself. Additionally, it can be relatively easy to set up and manage since you're not dealing with billing or member management directly—that's all handled by the advertiser. However, it's important to make sure that the advertisements are relevant and useful for your members; otherwise they'll simply tune them out entirely. 

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Choosing The Right Business Model For Your Community

Now that we've looked at some of the most popular business models for online communities, it's time to choose one that will work best for you. To do that, there are a few key factors you need to consider: 

Your goals for the community: What do you want to achieve with your community? Are you looking to build brand awareness? Generate leads? Increase customer loyalty? Your answer will help narrow down which business model will be most effective. 

Your audience: Who are your target users? What do they need from a community? What are they willing/able to pay for? Understanding your audience will give you insight into what kind of relationship they're looking for and what type of value they would be willing to exchange money for. 

Your budget: How much money do you have available to invest in developing your community? If you don't have much money available upfront, then a subscription-based model might not be feasible (since it requires developing new content regularly). Alternatively, if you're looking for a way to generate revenue quickly without much investment, then an advertisement-based model might be a better option. 

These are just a few things to keep in mind as you begin developing your own community business model. Remember: there's no one-size-fits-all solution here—it all depends on your specific goals and audience. So take some time to really think about what will work best for you before moving forward.

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