Alex Hormozi recently made a big investment in Skool.com, which is a platform created by Sam Owen for courses and online communities. This has sparked curiosity about why he made this investment and what the trend is all about. The interesting thing here is not just about communities; it's actually much bigger.
Skool.com allows people to create both free and paid communities, where they can share their knowledge and expertise and make money from it. So, if you're good at something and have valuable experience, you can use skool.com to create a community and earn income from it.
The potential for growth and profitability is huge, as demonstrated by the case study of one entrepreneur, Dan Henry, who has built a thriving online community called Get Clients University on the platform Skool, which has 1,200 members who each pay $97 per month.
This article will take an in-depth, step-by-step look at the strategies and techniques Dan employed to create, grow, and maintain his lucrative membership site, offering invaluable insights for entrepreneurs and businesses seeking to replicate his success.
The importance of recurring revenue
Before we start talking about the details of creating an online community, it's important to understand how important it is to have a steady income that comes in regularly. Let's take Dan as an example:
His online community where people pay a membership fee brings in $116,400 every month. He has around 1,200 members who each pay $97. This consistent and predictable income is a strong foundation for his business. It allows him to make plans for growing his business, invest in marketing efforts, and keep providing value to his members. The great thing about having this kind of regular income is that it creates a stable financial base. It lets entrepreneurs like Dan focus on long-term goals and sustainable growth.
Identifying a perpetual problem
The key to a successful membership site is finding what Dan calls a "perpetual problem." This means identifying a challenge or issue that your target audience consistently faces and needs to deal with on an ongoing basis. By focusing on a perpetual problem, you make sure that your community remains relevant and valuable to your members for a long time. Let's look at some examples of perpetual problems in different industries:
- Fitness and health: People always have to stay active and live a healthy lifestyle to achieve and maintain their desired physical appearance and overall well-being.
- Credit repair: Individuals might need continuous help to improve and keep up their credit scores because financial difficulties can come up at any moment.
- Entertainment: Platforms like Netflix and Spotify thrive because people are constantly looking for new content to enjoy, whether it's movies, TV shows, or music.
In Dan's case, he recognized a perpetual problem faced by business owners: the constant need to attract new customers or clients. As an experienced business and marketing consultant with ten years of expertise, he saw this as a recurring pain point for his target audience. By focusing his membership site on this perpetual problem, he set the foundation for a community that would consistently provide value and support to his members.
Building your community on Skool
Once you've figured out the perpetual problem you want to address, the next step is to create your community on a platform like Skool. Dan thinks Skool is a great choice for building a membership site because it offers several key features:
- Customizable sales page: Skool provides tools that let you create an engaging sales video and a sign-up page right on the platform. This makes it easier for new members to join and get started.
- No fees: Unlike many other platforms, Skool doesn't charge any fees. This means you get to keep all of the money from your membership revenue, which is pretty cool.
- Automated payment processing: Skool takes care of all the payment processing and member management tasks, including handling cancellations and removing members. This takes a lot of the administrative work off your plate.
Even though Dan uses his own website for his sales page, he wants to point out that Skool's built-in features are more than enough for beginners who are creating their first membership site. The platform has a user-friendly interface and provides comprehensive tools, making it a great choice for entrepreneurs of all skill levels.
Creating valuable content
To keep your members interested and make sure they stick around for the long term, it's really important to provide high-quality and valuable content within your community. Dan suggests creating a "start here" course that gives new members a quick win or immediate result. This could be a specific tactic, strategy, or piece of information that helps them solve their problem quickly and effectively. By giving them early successes, you boost their confidence and motivation, which makes it more likely that they'll stay.
Along with the initial course, it's important to have a collection of content that caters to the diverse needs and interests of your members. You can organize this content into different categories or themes that are relevant to your specific area of focus. For example:
- If you have a membership site about recipes, you might have sections dedicated to different cuisines, dietary preferences, or cooking techniques.
- If you run a community focused on tax-saving, you could categorize your content based on different strategies like deductions, credits, or investment options.
By offering a combination of practical tactics that can be immediately applied and comprehensive resources, you give your members a strong reason to stay engaged and keep their membership going. It's crucial to regularly update and expand your content library so that your community always feels fresh and relevant.
Build engagement through live calls and events
One of the best ways to create a thriving community is by hosting regular live calls and events. Dan and his team do this by conducting weekly calls, with each team member taking turns to lead the sessions:
- Dan hosts one call every month, where he shares high-level strategies and insights.
- The Chief Operating Officer (COO) leads another monthly call, focusing on operational and management topics.
- A professional Facebook advertiser and media buyer takes charge of a third monthly call, diving deep into paid advertising tactics and best practices.
These live interactions give members the chance to ask questions, receive personalized feedback, and learn from experts in real time. It also helps to foster a sense of community and belonging, as members can connect with each other and the leadership team. This creates opportunities for building relationships and networking.
To manage these events smoothly, Skool has a built-in calendar feature. It allows you to schedule and promote upcoming calls and webinars. This makes it easy for members to stay informed and engaged. They can view the upcoming events and add them to their personal calendars with just a few clicks.
Gamification and offering incentives
One of the reasons why Dan's community stands out is because 91% of the members actively participate. He believes that this high engagement rate is largely due to Skool's gamification system, which motivates and rewards member involvement. Here's how it works:
- Members earn points for different actions, like making posts, leaving comments, and receiving likes on their contributions.
- As members collect points, they move up the leaderboard, which creates a sense of competition and accomplishment.
- When members reach specific milestones on the leaderboard, they unlock exclusive courses, content, and perks.
This incentive structure encourages members to consistently engage with the community because they are rewarded for their participation. Dan takes it a step further by offering additional benefits, such as showcasing top leaderboard members on the live calls and providing one-on-one coaching opportunities.
By continuously finding new ways to incentivize engagement, you create a lively community where members feel appreciated and motivated to actively participate.
Attracting new members
Once your community is up and running, the next challenge is to consistently attract new members. Dan shares his strategy for bringing in 60-100 new members each month, even if you don't have a large following or email list. Here's how it works:
- Create a mini-product or offer a discounted product that relates to your community's focus. For example, Dan created a $47 Facebook Ads workshop.
- Promote this offer through various channels like social media, email marketing, paid advertising, and organic content. The goal is to reach a wide audience and attract potential members.
- After someone purchases the mini-product, present them with an immediate upsell to join your membership community. This takes advantage of their initial interest and momentum.
- Make sure the upsell offer directly relates to the initial product they purchased. Highlight how the membership will help them further their learning, achieve their goals, and overcome their challenges.
- Offer bonus incentives for joining the membership, such as exclusive content, resources, or coaching sessions. These extras make the offer more enticing and increase the chances of conversion.
For those who don't immediately take the upsell offer, Dan uses a follow-up email sequence. He shares relatable stories in these emails, focusing on what he calls "money tale emails." These stories are about everyday events that lead into relevant lessons or principles, eventually tying back to the membership offer. By creating engaging narratives that resonate with the audience, these emails build trust, establish relatability, and gently encourage prospects to join the community.
By consistently promoting your mini-product and following up with non-buyers using this storytelling approach, you can steadily grow your membership base, even without a substantial existing audience.
Retention and long-term success
While it's important to attract new members, the real key to a profitable online community is keeping those members engaged and committed in the long run. Dan uses several strategies to achieve this:
- Always update and improve the content library: Dan ensures that there is always fresh and relevant information for members to access and use.
- Encourage member feedback: Dan values the input of his members and uses their suggestions to guide future content creation and make enhancements to the community.
- Build a supportive and collaborative environment: Dan creates an atmosphere where members feel comfortable sharing their experiences, challenges, and successes. It's a place where they can support and learn from each other.
- Provide personalized support and guidance: Dan offers one-on-one coaching sessions, small group workshops, or targeted advice in the community forums. This personalized attention helps members feel supported and valued.
- Celebrate member milestones and achievements: Dan recognizes and celebrates the progress and accomplishments of his members. This creates a sense of pride and belonging within the community.
By making member retention a priority and consistently delivering value, you can build a loyal and engaged community. This, in turn, generates reliable recurring revenue over the long term.
Conclusion
To build a profitable online community, you need a well-thought-out approach that addresses ongoing challenges, provides valuable content, encourages engagement, and consistently attracts and retains members. By following the step-by-step process outlined in this article and using platforms like Skool, you can create a thriving membership site that brings in significant recurring revenue for your business.
Dan's case study demonstrates the potential of online communities. By implementing his strategies and applying his insights, you have the opportunity to develop a loyal and engaged audience that supports the growth of your business. However, it's important to understand that building a successful community takes time, effort, and commitment. It's not a quick way to get rich, but rather a long-term investment in your audience and your business.
