Why Freemium Communities Fail (& The 3 R’s to Charge What You’re Worth)

0:00Very rarely, if ever, do people get results and transformation in their lives simply by consuming videos and reading PDFs. Where the true power of change comes from in people's lives is through the application of ideas in community with other people. Full stop.

0:24Hey, I'm Gina Bianchini and this is People Magic, where I show you the easiest way to create a $1 million community. Let's dive in. Hey, Gina, you mentioned that I could do coaching, a cohort, a challenge, or a course. I am confused, honestly, about which one to choose. What's the difference? How do I know which one is right for my idea? Also, why shouldn't I just start with the freemium community instead? I love this question. So let's tackle the freemium community first, because I think that that's a really easy one. If you have a choice, don't do a freemium community. Freemium is not very effective.

1:08You will end up doing significantly more work for significantly less return, including just engagement. Even a Facebook group, even a WhatsApp group, So free is not really the place you want to play. The reality is that people pay attention to what they pay for. So our data across literally millions of data points, a billion data points at this point for Mighty Networks, our data is so clear. You will end up doing more work, have less engagement, and make less money by having a freemium community, meaning that you make your community free, and then you have paid courses or challenges or a paid mastermind that you're offering on top of that.

2:06A much better structure is where you have a free course or challenge, something that has a beginning or event or summit, something that has a beginning, a middle, and an end. Emphasis on the end. So you can still offer something free, but it has a container to it. We call them mini launches. You want a container to what you offer for free, and then you want to be consistently upselling people into whatever your intro offer is or your core offer, which could be I have a membership at$48 a month. Now, anybody who's like, oh, my gosh, what is$48 a month? That feels like a lot of money. I only pay$14.99 for Netflix.

3:00$48 a month is the average price that hosts of Mighty Networks, so people who are building these community businesses, are charging on Mighty successfully, meaning people are paying them$48 a month on average. So just keep that in mind. The way that you price is, I talk about it as the three R's. What are the results that someone is going to get? What are they worth? So how do you quantify that? The second R is replacement. So what is your membership or your course or your coaching replacing that they're already spending money on or that they should because they want to achieve those results? That's why results is the first R.

3:45And then finally, respect. So people pay attention to what they pay for. You will also pay attention if you are charging money and you will be much more likely to create something of value that ultimately will be really successful if you are charging for it. So don't do a freemium community. People pay attention to what they pay for. When you are charging, look at results, look at replacement, and look at respect. Now, in that context, let's talk about the difference or the similarities between coaching, a cohort, a challenge, and a course. The reality is they are all flavors of the same idea, which is to bring people together who are going through a transition.

4:40You offer them a framework for them to take and apply in their life. And as they are going through your framework together and applying it in their life, they're learning from each other. So it's not about kind of the old way of doing courses, which was, oh, I as the instructor or I as the host, as we call everybody at Mighty Networks. It is not about your content and somebody sitting back and consuming your content. Little secret, that was never what anybody did. That's why you had in the legacy online course world completion rates and graduation rates of like 1%. Because the idea that you were selling people was that they would get results and transformation.

5:39But very rarely, if ever, do people get results and transformation in their lives simply by consuming videos and reading PDFs. Where the true power of change comes from in people's lives, building new practices, changing their habits, is through the application of ideas in community with other people. Full stop. Full stop. So what that means is that you can create a cohort of people going through that framework together with a set of things that you are structuring for them every week. That is a cohort. That is a challenge. That is a course. So it's really what language are you going to have the most fun with.

6:27And then I want to tackle coaching a little bit differently. So when people start communities, again, monetizing them through cohorts, challenges, courses, memberships, events, there is typically a lot of not just fear, but a belief that for my offer to be valuable to the people I'm bringing together, it's about me as the host. So it's about my content. It's about my point of view. It's about time one-on-one with me. That's the most valuable thing. And the reality is that it is not. Now, this is a bit of a provocative point of view. If people ask me, what is the thing that you believe that is contrarian, that other people don't believe, it is this.

7:27that the true value of bringing people together on the same journey, going through transitions, the value is not the creator, which is why we actually talk about it as being a host of a community. It is your ability to create the framework that people are going to go through value together, that they are going to apply in their lives and then learn from each other, that's where the value comes from. So if you are fearful of somebody's not going to pay for my membership or my course, unless I am putting more and more of myself into it, I'm creating new content every week. I'm offering unlimited one-on-one coaching.

8:18I've heard these things. And then what happens is that people don't like their community very much because all they've done is they've taken their audience and they're like, for a relatively small amount of money, again, that goes back to the three R's, I've now sold my time and my energy to other people and I feel like I'm beholden to them. And then people get burned out and it's not fun anymore. The solution to this is don't think about the value you are creating in your community. Or even if you're coaching, don't think about the values creating, oh, I'm like going to do one-on-one coaching.

8:59Even if you love it, it does not scale. So a much more effective way of building a durable energy generating business is to think about how you're creating that framework for people to go and do together. That you are the host of the party. That the whole point of the party is to get people meeting and building relationships with each other in pursuit of results and transformation they can't get in their own life with just themselves. that no amount of individual self-discipline and consuming YouTube videos and reading books is gonna get them the same level of renewable energy to be changing their lives in ways that that's the whole point of community.

9:51We're wired for this as human beings. We are wired to be in community in pursuit of quests, in pursuit of results and transformation that we cannot get on our own. That is what makes being a human being awesome. That is the goal. So when you set up your community with the highest tier being one-on-one coaching, that is a very standard model. We support it on Mighty Networks. But I challenge you to shift your mindset from I am the most important person, I am the expert, I am the one that is offering people the insights and the value in a community to I am the person that through my framework and through my monthly themes, a weekly calendar, my daily actions that I am encouraging people to do with each other, I am getting them more value than they're ever going to get in a one-on-one conversation with me.

11:07And if you can do that, if you can make that shift from thinking about yourself and one-on-one coaching is the most important and most impactful thing to, if I can get my members into clusters and groups and people who are on the same path such that I'm sharing my story, I'm sharing my framework, but they're also sharing with each other. And again, this is one of the really important things is your members may give terrible advice. Part of what you're building in the culture of your community, your courses, your cohorts, you are building a culture where people are sharing stories, experiences, and ideas.

11:52Their stories, their experiences, and their ideas, not advice. Advice shuts down the conversation. And when people are sharing their stories, experiences, and ideas, it expands. It provides infinitely more value to the people who are other members in your community. So this shift from I am the expert, I am the content creator, I am the most important person in this community, in this network, which can be implicit, not always by any stretch of the imagination, but can be implicit in coaching. I really, really want to encourage you because it's also where technology is going. It's where all of the revenue is going to be as well, is in this model where you articulate and lay out an amazing framework that has the promise of getting people results and transformation as they navigate a transition.

12:58And then putting members together to share their stories, their experiences, their ideas, to go on quests together as they apply that framework, apply these activities in their daily life. That is more valuable. You can price it at a premium. It is significantly more scalable. It is the difference between a party where you're meeting all sorts of really cool people and they are all on the same path versus going to a party and the host is doing all of the talking and dominating the conversation. You're like, let's wrap it up. And that is what you are fundamentally doing. So to wrap all of this up with a bow, coaching is great.

13:46Try to do it where you are doing small group coaching as your high ticket offer as a opposed to one-on-one coaching. It's just, you will save yourself a ton of time and heartache. And then think about your cohort, your challenge, your course, as how are you creating a framework for people to come together and then getting those members connected to each other. If you want engagement, if you want retention, if you want people to buy the next thing or stay engaged in your membership, in your community, in your course, in your next set of courses. It is all about connecting your members to each other, not producing more content, not putting more of yourself out there.

14:36That is only going to serve to exhaust you and your members and the world isn't going to get the best of you if you choose to do it that way. So I know that's a little provocative or a lot provocative, but I see this over and over and over again. The reason we have more$1 million communities than any other platform on Mighty Networks is because we work with people to make this mindset shift from them being the creator and center of attention to the host of an incredible party where there is significantly more reasons for people to come back. And it's really easy to do. And that's why I made People Magic profit and made it free.

15:21Because once you make this shift, hopefully you never go back. Because you will be able to scale something absolutely amazing and have an impact on the world that you can't have otherwise. And I think that that's pretty awesome. So with that, I'm Gina Bianchini. This is People Magic. Subscribe to the show if you have not subscribed already. download this episode and I will see you the next time around. If you want to know exactly how to build a$1 million community, click the link in the description to get access to our full free course.