How to Increase Community Profits?

View All Articles By:   - Jeff Foster

View Company Profile: - WebBizIdeas.com

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The Answer

The short answer is to build social networking tools around an internet business. If your business plan says "we will make money just on selling advertising space" you will have a hard time succeeding.

• Combine eCommerce + Community
• Combine Corporate + Community
• Combine Directory + Community
• Combine Internet TV + Community
• Combine Dating + Community

  Did You Build a Website or an Internet Business?

It is common knowledge that a business sells a product or service. Does your social networking website sell a product or a service? If the only monetization of your site is through a membership fee or selling banner space you are not selling a product or a service.

What is a Product?

A product is anything that will satisfy a want or a need. No internet user wants or needs to pay a membership fee to join a new online community. Myspace, Facebook, Meetup, and thousands of free social networking sites exist that one could satisfy this need to belong to a community; so this is the wrong type of product to be focusing on in the current market.

A product could also be merchandise, raw materials, finished goods, or a commodity. Does your community of this type of product to your members? If you do not offer this type of product you are also not satisfying the needs or wants of an individual; you are not selling a product.

What is Service?

A service is not a physical good, it is classified as a sequence of activities one does that does not result in ownership that will also satisfy a want or a need. Again, no internet user will pay to join a new community to satisfy a want or a need; so this is the wrong type of service to be focusing on as well in the current market.

An online service could be providing a wealth of organized & targeted information, advice & consulting, event management, any type of management, interactive tools or games, support & training, delivery of a service, product fulfillment, education, research & reporting, employment, and a multitude of different activities that would benefit a person.

If one would provide these services they would surly need the resources, skills, experience, knowledge, and the wisdom to apply them. If they are offering legal advice in the healthcare industry it would be important for them to a lawyer or have worked in the healthcare industry.

Read a case study on how we found Redneck Community's Service

Does your social network sell a product or a service?

  Why an Advertising Based Revenue Model Will Fail

The growth in online trade and social networking software has lead to the emergence of online marketing that aims to attract Internet users to a particular website and convert casual visits into sales. This has become increasingly difficult to achieve in recent years due to the ever-rising number of websites selling similar products or services. Although customers usually prefer buying from well known websites, they are often attracted to a product based on how it relates to them personally. This makes it necessary that quality products have some emotional value to attract casual visitors.

For internet businesses, the website itself can be this "emotional appeal" and not the goods or services offered on the website. A website that is not designed to attract customers may not be able generate adequate revenue and profits even if the goods or services offered on the website are of top quality. This is why a number of online businesses have redesigned and converted their websites into community websites or social networking sites that allow people to interact with each other.So the emotional appeal of socail networking tools can contribute to the selling of a product or a serivce; not replace.

Emergence Of Community Websites

The emergence of such hybrid websites is not something that happened without reason. They have been created to overcome problems faced by standalone commercial websites and standalone community websites. The previous generation of websites had to be supported by frequent online marketing & maintenance to attracting new customers. This often created cash problems, especially when a website was unable to increase sales.

The latter types of websites did not have to invest heavily in online marketing, but had to make available the necessary infrastructure required for operating such sites. Although such websites earned revenues from advertising, it was often not enough to cater to the ever-increasing community of Internet users that became its members. In fact, The PubMatic AdPrice Index revealed surprising weakness in monetization for the vast majority of Web sites:

Notice how Small Website (focussed on a niche market) earned 3X more in ad revenue compared to large websites.

Marketing experts studied the situation and concluded that problems of both these problems could be overcome if basic characteristics of both types of websites were incorporated into a single website. This concept led to the current hybrid design, which combines an internet business with elements of a community website as a means of generating additional traffic. It focuses LESS on advertising and MORE on selling a good or service; the corner stone of a business.

By incorporating elements of a community website such as local events calendars, topical forums, and community interest information, retail & service oriented sites can gain a significant amount of traffic for their online sales. Although building a Social Networking Website Design will allow your customers to talk to each other, share advice, review products, share personal videos, write blogs, create forums or groups, share jokes and music files, play online games, and form relationships with each other; the tools are there to increase the brand awareness (or emotional appeal) and sell more products & services.

What Else Should You Provide

important for them to a lawyer or have worked in the healthcare industry. When planning your social network proper market analysis is a must. Competition research & keyword research will help you set up the proper internal link structure and on-page optimization. You do not need to invest as much into online marketing after the site launches, as the marketing objectives will be achieved with the growth in the number of internet users registered on your website. These websites often have millions of registered members, providing a ready market for the products or services offered by the website. The only type of investments you will be required to make will be on providing a fast and efficient community software, dedicated servers, and privacy protection software. Make sure that you do not compromise on these, as Internet users will not like to stay longer on a site that is slow or does not allow them to communicate properly. This does not mean you do not have to spend money marketing your site, we are just suggesting more time & effort be spend planning ahead of time because this is where the greates ROI will come from.

If you can provide a fast and easily navigable website, more and more Internet users will register themselves on your website and it will act as a ready-made customer base. People are usually in a good mood when they are chatting with friends, sharing jokes, or just looking out for potential dates. If during this time they come across some product or service they need, chances are good that they will click on the 'buy' button. This is clearly one way, you can improve revenues and maximize profits from your website.

If you would like to learn more about Community Software please contact us.