How Do Online Communities Generate Money?

December 10, 2009Comments Off on How Do Online Communities Generate Money?

We want to fit in. We buy what others are buying, act how others act and speak how others speak. Not just any others but our friends and peer groups. We want to be more like them.

Usually friends come before the products. Your friends might get caught up in a craze and, soon enough, you own a Tamagotchi. But the branded community approach is different. Here, the products come before the friends. You make friends through the products you buy. Not every product, but certainly the products you’re passionate about.

Imagine you buy a high-end bicycle. The brand invites you to join a community of people who buy their bicycles. Through that community you make friends, share advice/tips for getting the most from the bike and meet up several times a year.

Two things have happened. First, you’re locked in to that brand. To leave the brand would be to leave the group. We don’t like leaving our friends behind. Second, your interest in the brand has been intensified. Your interest in a bike has become a passion for cycling.

That passion will cause you to buy more of the products. This is partly because you like it more, but just as much to retain a status amongst the group. You might buy the latest bike models, customized handle bars and anything else that signifies your allegiance to the community.

We saw this all the time with gamers. Gamers bought everything. They bought steelpads (large mousepads with acid-treated glass surfaces), mouse bungees and all manner of hardware, t-shirts and energy drinks. Did it make them better? Perhaps, but it was never proven. It certainly identified their status amongst the group.

This isn’t easy to explain to most people, but it’s fundamental to understanding the benefits of communities. Turning someone with a solo passion for your brand into a group passion increases both loyalty and direct sales.

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