A digital community flywheel is powerful to grow engagement and revenue growth.
March 14, 2023
Subscription businesses offer exciting opportunities, whether they offer software, products, information, or something else. Subscription companies are positioned for significant growth. In 2020, the subscription economy was worth $650 billion, and it is projected to grow to $1.5 trillion by 2025, according to industry research.
The booming subscription economy is a double-edged sword. On the plus side, buyers are more willing to purchase on a subscription basis. On the negative side, we’re past the early adoption period, and there is evidence of “subscription fatigue” for some buyers. A survey of 1,000 consumers in 2022 found that two-thirds of consumers have canceled at least one streaming service in the past year. Broader economic issues are also putting pressure on the subscription business.
There are a few concerns that may frustrate growth even further for subscription businesses like publishers, software companies, and ecommerce brands. High inflation levels in the US, including necessities like food and transportation, make life difficult for many consumers. Throughout 2022, the US inflation rate ranged from 6.5% to over 9% - a far cry from 2019 levels of less than 2%. While we hope to see high inflation tamed soon, it remains a problem today and may hold back consumer activity for a while.
In addition, subscription businesses that sell physical products face additional difficulties. Supply chain problems in various industries like agriculture, energy, and electronics make it tough to fulfill orders quickly. Gallup reports that 60% of consumers have reported delays in receiving products due to supply chain issues. That means that brands have to work harder to maintain customer trust and loyalty despite shipment delays.
Finally, higher interest rates are also making it harder for customers to buy high priced items. In addition, an increase in mortgage rates has decreased the discretionary spending of many households. Higher rates also make it challenging for many businesses to finance their operations.
While these headwinds are real, it’s still possible to grow and thrive in this environment. Building a flywheel for your online community is the key to unlocking additional growth.
A community flywheel is a way to lift growth. The concept is compelling for online communities, which can scale quickly. In simple terms, a community flywheel means that your community members make your brand more valuable through their contributions and participation and bring others into your space. In other words, your community becomes central to your brand’s success and future growth.
The only catch is that it takes an initial investment of time and resources to launch the community flywheel. Getting the first 1,000 true fans (or more!) can be a long road. Once you have those fans in place, growth becomes far easier. It’s like investing in the stock market. It’s easier and faster to compound your returns when you start with a significant investment. That said, the magic of compound returns - for a community or investment - is still available to all who start.
Want to see community-based growth examples? Find out how Gymshark and Notion used online communities to grow.
Put these strategies to work to get your community flywheel into operation. Your growth will take off as you put more of these methods into practice.
Passing website visitors, who visit once and never return, do little for growth. Use these methods to spark engagement.
When your community members see a good reason to keep returning to your website, like experiencing a multi-day online event, it’s easier to grow engagement. For example, instead of delivering all of your best insights in a single webinar, look for ways to promote your content over a more extended period of time.
Almost everyone enjoys being recognized for their contributions. The principle holds for your online community building. Use community badges, gifts, and thank you messages to encourage your most engaged members to keep coming back.
After you implement those strategies to inspire greater participation in your online community, it’s time to turn to revenue.
The way you lift revenue with an online community depends on your business model. Let’s consider a publishing business with advertising and how online events can lift revenue.
Many publishers offer conferences, talks, and other offline events in traditional venues. The next way to grow revenue is to offer digital events and hybrid events so that more people can join the event. Online events have fewer costs than real world events, so you can offer more of them.
You can use digital events to lift revenue. First, you can use subscriber-only events as a retention method to encourage subscribers to renew their subscriptions. In addition, you can offer current subscribers a discount or early registration access to your events.
From your audience's perspective, there are a few reasons why event participation is appealing. First is the event's content, like learning new insights. Second, there is the social and networking aspect of the event - connecting with people who share your interests.
A thoughtfully curated community event is a powerful way to attract your audience. For example, you might invite Gen Z students interested in finance or technology with special guests in those industries. If Gen Z is an essential demographic for you, check out our post on 5 Ways Publishers Can Build Their Gen Z Audience And Earn First Party Data.
By keeping the event tightly focused, the experience will be more focused, and your audience will be more likely to make connections.
Growing an online community takes a lot of heart, thoughtful content, and passion for connecting with others. Arena has resources to make online community building easier. Use our virtual events checklist to plan, promote and run online events without the stress.
Arena also has you covered with technology solutions to build a thriving digital community right on your website. Find out more about building your online community with Arena.