As we help; design, commission, analyse and manage online communities for a living, we are constantly on the look out for ways to convert the raw customer energy of a network into a more convertible currency - hopefully with pictures of famous Australians on the notes.
So far the most reliable source of new value for our clients has been the customer co-creation of more relevant&competitive products and services through Ideas Exchanges, ratings and rankings. But we do keep looking.
For this reason we keep an eye on what Laurel Papworth has done in this area.
But this week I read "The Social Network Business Plan: 18 Strategies That Will Create Great Wealth" by David Silver, an angel investor looking to encourage lots of entrepeneurs to start ratings communities so he can 'flip' them. He is a man with a laser focus on the money. Well worth reading if you like business plans and how they apply to consumer generated content communities.
A bit long, but I would like to list most of the ways to make money from communities that are presented by Mr Silver to see if there is any connection between the brain and the hip pocket nerve for you with any of them...
Sources of income for a community;
- User Group meetings - attendance fees plus
- User Group Exhibitor fees
- Subscription fees
- Tip Jar - where members contribute funds to acknowledge they received value from other members - the tips are split between the contributor and the community operator.
- Reputation Management Fee - effectively another subscription so members can keep up to date with the performance of the community. Especially important if, as suggested, members are given the chance to also be investors
- Slice and Dice the Conversation - sell aggregated community opinion and ratings to external suppliers
- Port the community to Mobile Phones - and negotiate a share of the minutes used to carry the community content from the phone operators
- Synthetic currency - like Linden dollars in SecondLife or the CyWorld currency in Korea, real money is converted to community money. There is already a company, IGE, that converts synthetic currency for real currency.
- Kudos - acknowledgement and status using synthetic community currency to allow members to do some of the rewarding amongst themselves
- JD Powers business model - sell quotable reports from the recommender community to manufacturers - similar to paying for inclusion in 'Who's Who"
- Sponsorships - 'Powered by..."
- Affiliate Ad Networks - the community can become a source of 'Infomercials' for other media channels
- "Approved by' services - with stickers
- Extend to a 'not for profit' and manage grants through the community
- Co-brand a pre-paid credit card - actually there are 6 revenue streams that can come from involvement with a card issuer
- Branding - too large a subject for discussion here, Mr. Silver sees this as a disruptive opportunity in marketing
I must admit that I had not thought about several of these revenue opportunities. Are there others?
p.s. Mr Silver explicitly rejects the gathering of ad revenue from within the community itself as inappropriate.
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