Why Private Communities Work so Well

In the past I have vented email frustrations in many ways (and truth be told I am still way behind on email to this day) but I thought it would be worth sharing why forums are a way better business model than personalized emails for helping people.

I am not sure if all my thoughts and analysis are 100% spot on, but this is why I like private forums so much.

Instant Feedback on Value Perception

One of the first reasons is that you instantly have a yes/no answer on if the person values your time. If you are answering questions via email then the transition to paid support via email gets to be a bit weird...with people pushing for as much as they can possibly get for free, and you being the bad guy if you charge. By deciding to answer virtually no questions via email you help them understand that your time and your knowledge *ARE* your business model, and that if they value them they can pay for them.

Sure you can answer questions on if you might be a good fit, but anytime you here something that starts off with "have a quick question" followed by some very specific requests about their exact situation and website then that person will rarely convert....they are just trying to squeeze as much free information as they can.

Reciprocity = No Pikers Please!

A second major advantage of running a forum vs trying to help people via private email is that it filters out the pikers. Back when I would try to help people via email, I would get lots of questions like these...

Hi Aaron
I want to do something really spammy that could easily generate 6 or 7 figures of income. I want you to guarantee it will work, (and to be able to cast the blame on you if it does not).

Hi Aaron
Google just banned our site. I gave you $79. Fix it now.

Hi Aaron
I bought your book and was too lazy to read it. But since I gave you $79 I need to see at least $100,000 in returns. Map out my strategy. Oh and I have a $0 budget...as I already spent my $79.

Hi Aaron
I have a spammy direct marketing 1 page salesletter website that I need to rank #1 for "mortgage". I have no budget and am unwilling to improve the site or add value in any way possible, but this is no problem since you are an SEO.

Hi Aaron
I don't have very much money (or knowledge for that matter) but I took on some clients that I am charging a lot of money to and I need you to do the work that I am charging them a lot of money for.

Now most people wouldn't be quite as direct as the above...there would be flowery language to try to cloak the bluntness and absurdity of the proposition.

But the cool thing about our current business model is the above people have disappeared from the equation.

We can point people right to their areas of need if they are in need, and the people who would have the never-ending general stream of irrelevant questions don't exist. And the people who are reselling services (but want you to do ALL!!! the work) don't exist either.

I think the reasons for those are mainly reciprocity.

  • The person who is a no value add vulture will presume that others are just like them, and would be afraid to mention specifics in a community (where others see it). And if they are too generic then the answers can't be as specific as they otherwise would be.
  • The person who is too lazy to study would be too embarassed to ask the same questions over and over again without listening to your answers. And those who ask for general reviews are highly receptive toward feedback. There is the community element of it, to where if a person asks you to review their same site 4 different times and they haven't done a lot of the tips from review #1 or #2 people will tell them about it.

Another such example of the type of piker (who was around in our old business model, but no longer exists today)... one guy emailed me about how broke he was and how he needed his spam hype garbage single page salesletter sites to rank and he had already paid $79 for my ebook... etc etc etc

The SAME GUY was in a book my wife read a year later as a case study of a self-made internet multi-millionaire who made his money doing info-marketing. So he was a fellow info-marketer and he wanted 10+ hours of my time for under $80.

He didn't like it very much when I told him I could use some $8 an hour help in his profession!

Answers With In Depth Context

Via email people sometimes try to quite literally write chapters to me. And OFTEN then don't even listen to my responses...so it just ends up going astray. People don't respect what they don't pay for. They usually start off with "a quick email" but after 3 or 4 hours of work on my end the perception of "quick" often changes.

With email the only way to respond to email overload is to be short (and maybe sometimes blunt). Such interactions often lead to more confusion and/or some incorrect assumptions where people feel insulted in such. The community setting of the forum prevents that issue for me. Out of close to 100,000 forum posts we have only had anyone feel insulted less than 5 times (so far as I am aware anyhow, and I read every post).

The interactive dialog ensures questions get not just answered, but understood. Further, sometimes you are good at explaining something to person B but not so good with explaining it to person C. But if person B understands you then sometimes they can do a better job of conveying the issue to person C.

Have a Lotta Help From My Friends

Since the forum is closed to the public the incentive to spam it is lessened, while the quality of membership is increased (because people pay to be there).

There have been technical topics covered in the forums where I am not the right guy to answer them - AT ALL. And, because our community is diverse and has lots of helpful members, the people asking those questions get much better answers. And since many people are there questions are typically answered far faster than a person can do via email.

And as people invest more time into participating they only want to help more. Putting people in a social setting really helps the user/abuser types self-select out of participation whereas those who realize that they get more when the give more and participate more are able to learn so much more from it and get a great bargain, creating a virtuous cycle.

A Searchable Database of Answers

Over time the forums get better at collecting questions and answers in a variety of formats...which makes its internal search become more relevant over time.

Selling an Interaction

With my old ebook model I was selling something that could be copied. With the new model there is always change happening and always new things to talk about...so it is selling more of an interaction than a static product, and people only pay as long as they find value in being a member.

Less Reliance on Search

Anytime you have recurring subscription income then you are not so reliant on using search and other forms of push marketing. Sometimes just giving a really good customer experience is enough to help market your website.

And the Negatives?

There are not a lot of negatives to private forums as far as I see it, but there are some things worth thinking about, as no business model is 100% roses.

The first big risk is not hitting a critical mass. If you do not build it out to self sustaining then anytime someone joins they feel like they made a bad decision (since there is no/low activity).

Back when I had my ebook model I remember taking a two week European vacation. While I can still travel, it is much harder for me to unplug because there is work I have to do everyday. And it is tricky balancing what to do. Shall I participate heavily in the forums, write the newsletter, work on planning out some new SEO tools, create more training modules, etc. There really is an endless array of things to be done.

In some cases maintaining account permissions can be time consuming as well...especially if you discount the time it can take and under-price services. A couple ways to get around it are to try to charge enough to limit your size such that you don't have to worry about it too much, hire on help, add a support section to your site, and try to get people to sign up for longer periods of time.

The last tricky part is managing growth. If you grow too quickly it could lower the utility and quality of your site. If you grow too slowly then you risk the site fading into an eventual obscurity. How can you grow too slowly? Every type of membership site has a growth rate (and things that influence it) along with a decay rate (and things that influence it). If you are not improving the value of your site then eventually the decay rate overtakes the growth rate. So you keep needing to try to add more value.

Some people try to make membership sites seem like a set and forget revenue stream. If they aim to offer real value that can't be any further from the truth. The tricky part then is trying to maintain or grow the earnings of the business while also trying to maintain or grow the quality of the members. It can be quite challenging because most things that inspire quick growth also lead to a higher churn rate. And if you focus too highly on customer quality you can end up missing some of the better potential customers in the beginner portion of the market. That is a big mistake because

  • the beginner piece of the market is typically the biggest market segment in most markets
  • beginners tend to be more likely to spend (it is easier to deliver perceived value to a person who is unaware of everything that is out there than to a person who knows their options quite well, and this is especially true in markets with many software products)
  • the people who are experts today were once beginners (and are likely sticking with learning from many of the people they took too when they are beginners)
Published: December 7, 2009

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Comments

December 7, 2009 - 8:36pm

You have the authority. You should charge for your tools. Yesterday. You would have every SEO agency as a private forum member.

December 7, 2009 - 10:17pm

Well part of it is I realize every shift we make has short and long term consequences. I wouldn't want to do that move until after we launch another site...after we get another big site launched I will be more flexible with changing up the business model on this one ;)

December 9, 2009 - 2:29am

I just recently found I can help with my knowledge a good number of people. I started a blog and I am getting lots of comments and thank you-s. What do you think of turning that traffic into a free forum and then into a paid forum upgrade. Any thoughts on this transition? Any technical suggestions, software etc. I see Warrior Forum has that model in the internet marketing niche.

December 8, 2009 - 5:30am

Your example emails you received are similar to many I've received (web design field). Many people use compliments and verbose language to "package" their demands in a "nice" way to me. It's very condascending the way they do it as if I am seduced by compliments to the point of giving up hours of my time. All it does is annoy me.

Actually this passive aggressive behaviour by freetards is far ruder than blasting foul language in someone's direction. And what makes it even worse is their "who? moi?" innocence when you come back at them with a "I cannot work for free for you".

I try to push the message now that the services I provide aren't for everyone (I say this directly). I say directly that I work best with autodidacts - self-teachers - and I have rewarded good customers with discounts, and have fired bad customers. I've even gone into partnership with good customers on some websites (profit split).

You're in a position now Aaron where you can close off free help altogether (surprised you even offer it if you still do that is!). Enjoy your time.

December 8, 2009 - 3:24pm

Yeah...I don't try to help too many people for free with 1:1 time at this point, but that doesn't mean people wouldn't like me to ;)

December 8, 2009 - 7:15am

I have similar experience to share about the cheap customers vs expensive customers.

I run a site in x niche where we were selling the digital download product for 29.99 USD. At that time we were new to the market ( x niche ) so we were trying to low ball so that we can generate money to keep the business running while we improve in terms of ranking and gain authority. Now after 1 year and 7 months we sell the same product ( with newer versions ) for 129.99 USD and now it sells thrice times as much as it did for 29.99 because of the combination of better ranking, trust, viral marketing, brand awareness ( reputation of the brand ).

At the time when were selling for 29.99 USD we were barely sold 4 product on average per day. So monthly we were making 3500 USD approximately. So we invested 95% of the money back to do search engine optimization / marketing / brand awareness / other costs to run the site and developing product quality. Now we sell three times more product then when what we sold for 29.99 USD with larger profits.

Now lets go the main point of Low Price Customers vs High Price Customers. The truth is as your site gains trust and reputation ( in other words you become a brand ) people are willing to pay more money as they trust your brand. So, therefore there are less charge backs, more sales and repeated customers. But when you are new you have to low ball to keep generating money and use that money to develop yourself further. But Cheap Price Customers are the once that complain too much, they expectation are way over the roof, they do more charge back and they are mainly inexperienced.

Now in terms of Keywords, before were were getting traffic from generic product keywords (like seo tips, seo secrets etc) and as we gain trust and develop ourselves into brand we get traffic from keywords ( like brand-name product-name ). Aslo when you become a brand your conversion rates are much higher compared to when you are new player in the niche. As many people these days do their research before they come and buy from your site.

This is my first ever comment on the blog post on seobook.com in the blog section, I am not a great writer, I do jump around on other topics when I am trying to explain one topic something so forgive me if I confused somebody.

Peace Out.

December 8, 2009 - 3:23pm

Thanks for the great first comment :)

December 8, 2009 - 9:10am

I have a funny one... I used to work at walmart and now the former store manager of the place was begging me to help him with his business... I helped this guy FOR FREE on some basic seo/marketing stuff.. but everytime I gave a little he would try and suck even more from me for free...

his email to me

I am not 100% sure. He wants to help me,but I don't know everything to show him how. He came over to my office today and I showed him the *censored* website and my google website analitics. He had questions about how *censored* works and *censored* and all that. Those questions are hard for me to answer for him. I am sure that now he has the *** website he will spend some time reading through it, but an expert such as your self would help it go a little faster. I don't even know if *** is teh answer or if there is more I should be doing.

I know it sounds like a cop out, but I just haven't had time to do anything on **** or anything else, it has been four weeks since I entered my last new product on my website. Being a one man show and my warehouse takes all my time. When I get home I just don't feel like getting on a computer.

This guy goes to my church and he hasn't been sleeping much at night and he said he could help me if he new what to do.

Just let me know if you don't mind meeting up with us sometime next week at my office.

Here is my reply to him that finally got rid of him.. and to learn that my time is valuable..

Hey Chris

******* is just a needle in a haystack

Their are literally hundreds, if not thousands of more internet marketing techniques, tips etc that I know that you should and can do for your website, business etc.. but trying to teach someone what i know wouldn't be easy... it would be like getting a doctorate ... not easy and the experience and knowledge is worth 100's of thousands of dollars if not millions... at this time i'd rather not entertain the idea of showing someone what took me years and thousands of man hours to comprehend for nothing... what i know is like legally printing money.. not many know how to do it and the knowledge changes lives..

LAter

James

December 9, 2009 - 2:02pm

Arron,

Your hanging on to a biz model that is p*ssing you off and it shows in your writing. Your position reminds me of a really popular local rock band that has gone national, yet, your trying to keep your original (local) fans happy.

Everyone knows free tools are a GATEWAY to paid tools. We're all here to pay the rent. Let go of the peeps that want to live rent free.

You need Pearl the Landlord to manage your whiners: http://www.youtube.com/watch?v=ZyzLuLI78Rc

December 14, 2009 - 2:16pm

Private communities such as this Cool site keeps the Noobs away from saturating out the methods :)

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