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It’s Wednesday, August 16th, and today we’re talking about the ROI of Community and how to evaluate whether you should bother building one.
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Information is a commodity. Transformation is highly valuable.
Community can have a huge ROI - both in dollars for you and value to them. The ability to design a community of change unlocks the potential for the kind of revenue and impact that information alone cannot provide.
The problem is, too many of us focus on the content (the information) we’re going to give our members instead of how we’re going to change them, resulting in the whole experience falling flat.
Just this week I received emails from two folks I know who launched free communities and were burnt out and ready to walk.
In both cases, the steps outlined below would have saved them a looooot of stress.
Years ago, I had a super-duper idea.
I had been teaching dance for many years and had begun to question a lot about the traditional methods of teaching. Come in, warm up, now go across the floor, now do these moves, now go home. There are certainly some valuable skill sets being built in that process, but it was missing so much.
Why do we do it like that?
What about developing our own intuition?
If I want to be a professional dancer, how do I develop a movement portfolio?
Is it better to focus on form, speed, or muscle memory?
It seemed to me that there was a thoughtfulness missing. Most classes were focused on a very narrow lens.
A girl in her over-analyzing element
A new, exciting era began. I bought a $2k course by Amy Porterfield called “Digital Course Academy”. I bought a new camera. I feverishly wrote scripts, mapped out sequences, and recruited dancers. I purchased a new URL and The Momentum Lab was born. Our tagline was “Pick up where class left off”.
I was going to unify all the pieces of what made a great dancer: technique, artistry, strength, and mobility. I thought of everything.
Well, except for whether anyone actually wanted it. To quote Biggie, I was high on my own supply.
That first year, The Momentum Lab made only $400. The whole year.
I wasn’t just disappointed; I felt stupid. I was so certain dancers would flock to this that I missed the core issue: dancers want to dance. Not theorize, not take courses on a computer. Rookie mistake.
The Momentum Lab is long gone. The URL now belongs to a sex doctor whose tagline is “You’re here because you love having great sex.”…so there’s that.
The whole experience was painful enough to make me a bit fanatical about answering the question before the question.
Don’t ask about the ROI of community. The real question is “How the hell do I even discern whether people will pay for this?”
If you can understand how to tweak your approach to community building to that of a change-maker, you can create something people will throw money at. And I’m a big fan of paid communities. To do this, we need to think through four key questions:
Am I selling information or transformation?
How much more is the after-state worth than the before-state?
Could they do this for themselves, and if so, what would it cost in time and resources?
If they paid someone else to do this for them, what would it cost?
A quick note: I first heard these questions from Josh Spector, who uses them as a way to determine pricing. I am taking his questions and adapting them to a community lens.
1. Am I selling information or transformation?
Stasis isn’t valuable.
Imagine you're a business owner considering launching a community for aspiring entrepreneurs. The go-to is to focus on sharing entrepreneurial tips and tactics, but the real transformation lies in igniting the spark of confidence, problem-solving, and resilience within your members. There’s a reason most of us are familiar with the Derek Sivers quote: “If more information was the answer, then we'd all be billionaires with perfect abs.”
Consider the story of "StartUpSuccess," a local community founded by my friend Sarah, a seasoned entrepreneur. Rather than just offering business advice, Sarah's community promises to transform hesitant beginners into confident business leaders by providing not just knowledge but also a support ecosystem. They come together every month for a “solve-a-thon”, breaking into small groups and pushing each other through the latest challenges.
You could be promising amateur photographers the ability to go pro and charge more for their work
You could be promising fans of horror movies a place where they can gather and nerd out without the trolling and gatekeeping
You could be promising high school grads a way to jump to the top of the candidate pool
It’s worth noting the second example. A client of mine recently launched a horror community and it is thriving. They’re not promising some big existential change or more revenue. They saw a cultural issue and created a space where members would be protected from the riff-raff. The change can skill, safety, or quality of life.
It just can’t be…
2. How much more is the after-state worth than the before-state?
To understand the potency of this question, let's examine the fitness industry. When considering joining a fitness community, potential members envision shedding extra weight, feeling strong, and walking into a social setting with a new kind of glow and confidence. If the financial and emotional benefits of attaining this after-state outweigh the costs of membership, there’s no question; they’re in. The 35 billion dollar weight loss supplement issue is great evidence.
This tangible value differential is what captures members' attention and sustains their engagement.
In some cases, this is even more straightforward. If you’re joining a community that is promising you’ll double your Instagram followers or 10x your revenue, as long as you believe it’s possible, the math is simple.
3. Could a member do this themselves, and if so, what would it cost in time and resources?
Let’s look at home improvement. Imagine "HomeRun," a community geared towards helping members transform their living spaces. Potential members might wonder if they could execute these renovations independently. However, upon calculating the time, money, and potential mishaps involved, the community emerges as an appealing choice. Plus, they get a little hit of dopamine when they imagine what the accomplishment will feel like.
By providing expert guidance, access to resources, and a network of like-minded individuals, HomeHarmony makes the transformation of a home smoother and more enjoyable.
Communities have a real advantage here because there are very few changes in life where we’re better off alone. We run into issues of motivation, fear, knowledge, and skill— all challenges better overcome in community.
(Also, I want you to know that my first choice for this made-up community was “Home Wreckers”, which really tickled me)
4. If the member paid someone else to do this for them, what would it cost?
Consider a scenario in the tech industry. "CodeCrafters," a community for aspiring programmers, understands that while members could theoretically hire a programmer to build their desired applications, the costs could be exorbitant.
The community steps in as a cost-effective solution, offering a roadmap, tutorials, and mentorship to empower members to develop their skills. By offering an alternative path that saves not just money but also time, CodeCrafters creates a compelling proposition.
These four questions are a great guide not just for understanding whether a community is worth building but for crafting the right kind of message. Each potential member is going to tell themselves a story about what you will do for them. Your job then is to make clear: this is change, this is what this change is worth, and this is how joining this community is a better option than all others.
The key to community ROI is transforming information into Impact
Marinade
A few things I’ve read this week that are worth soaking in:
I am over the moon for David’s Spinks newsletter on Engineering Serendipity in communities. It’s the perfect blend of humor, narrative, and tactics. I bookmarked it to use as a reference anytime I’m thinking through community programming. You must read it.
My favorite podcast of all time has always been Reply All. For any of you RA nerds out there right now, PJ Vogt is back with a new podcast called Search Engine. It’s very good. Wanna know how sad the monkeys in the zoo are? What’s going on with Elon Musk? Listen here
Onward,
April
PS: No newsletter next week. I’ll be in the Caribbean 🌊🌴
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