Latest / The CMO Podcast with Fexingo: Marketing Leadership, Budgets, and Executive Strategy / Why CMOs Are Turning Brand Communities into Revenue Centers
Transcript
- Lucas: There's a shift happening in how CMOs think about brand communities. For years, communities were seen as a cost — you invest in forums, events, moderation, content, and you measure success by engagement or sentiment. But now, a growing number of marketing leaders are asking: can the community itself be a revenue center? Luna: I've definitely seen that. And it's not just about selling to the community. It's about monetizing the community structure itself. Like, the community becomes the product. Lucas: Exactly. One of the clearest examples is Sephora's Beauty Insider program. It's technically a loyalty program, but it functions as a community with tiers, exclusive access, and member-only products. In 2025, Beauty Insider drove over one point two billion dollars in sales — that's not just a nice to have, that's a core revenue stream. Luna: And it's not just retail. Peloton has been doing this well too. Their app-only membership — which gives access to live classes, challenges, and leaderboards — grew forty percent year-over-year last quarter. That community layer is what keeps people paying. Lucas: Right. And what's interesting is that both of these examples involve a membership model layered on top of the product. You're not just buying a lipstick or a bike — you're buying into a group. That sense of belonging is what drives retention and, ultimately, revenue. Luna: But there's a tension here. As soon as you start monetizing the community, it changes the dynamic. Some members feel like they're being sold to, not supported. How do CMOs navigate that without alienating their most loyal users? Lucas: That's the million-dollar question. And the answer seems to be: you monetize by adding value, not by charging for access that was previously free. Sephora, for example, introduced a paid tier called Beauty Insider Plus last year — it's thirty dollars a year, but it includes free shipping, double points, and early access to new products. The free tier still exists. You're not taking anything away. Luna: So it's about creating a premium layer, not paywalling the community. Lucas: Exactly. And another approach is co-creation. Brands like Lego and Starbucks have long involved their communities in product development, but now they're formalizing it into revenue models. Lego Ideas lets fans submit designs, and if a design gets ten thousand votes, Lego produces it and the creator gets a percentage of sales. That's a direct revenue share from community-generated IP. Luna: I've seen that work really well for smaller brands too. A cosmetics company called Glossier basically built its entire product line from community feedback. Their first product, a moisturizer, came directly from a blog comment thread. And they've kept that loop going. Lucas: That's a great example. And it points to a broader principle: the community isn't just a distribution channel, it's a source of innovation. CMOs who treat it that way are seeing faster product cycles and lower R&D costs. But they also need to invest in community management as a strategic function, not just a customer service role. Luna: Yeah, I think the role of the community manager is evolving fast. Some companies are now calling them 'community strategists' or even 'community VPs.' They report directly to the CMO or sometimes to the CEO. That's a big shift from five years ago when community was often under social media or support. Lucas: Absolutely. And the compensation reflects that. I've seen salaries for senior community roles at major brands hit one hundred fifty to two hundred thousand dollars. That's because these roles are directly tied to revenue — they're managing a monetization pipeline. Luna: So for a CMO listening, what's the first step? If they have a community but it's not monetized, where do they start? Lucas: I'd say start by looking at what your community already values. Are they asking for exclusive content? Early access? Direct interaction with your product team? Pick one thing and build a small paid tier around it. Test it with a subset of your most engaged members. And be transparent — tell them you're trying to build something sustainable. Luna: And if it flops, you can always roll it back. But if it works, you've got a new revenue line that's actually strengthening your relationship with customers. Lucas: Exactly. And that's the key insight. When done right, community monetization isn't a tax on loyalty — it's an investment in it. You're giving people a way to deepen their connection to the brand, and they're paying for that privilege. That's a virtuous cycle. Luna: Honestly, if today's conversation sparked an idea you might actually use, that's the link — buy me a coffee dot com slash fexingo. It's the smallest possible ask for something that might pay off big. Lucas: Yeah, and we keep the show ad-free because of listeners who find value here. So if this episode was worth a coffee to you, that's the spot. Luna: Alright, back to it. So we talked about Sephora and Peloton — but what about B2B? Can a community be a revenue center for enterprise software? Lucas: Absolutely. Take Salesforce. Their Trailblazer community is massive — over one point five million members. They don't charge for access, but they've created a certification program that costs money and is highly respected. That's community-driven revenue through education. Luna: And that certification program probably increases platform stickiness too. If you've invested in a Salesforce certification, you're less likely to switch to a competitor. Lucas: Exactly. And that's the double benefit. The community generates direct revenue from certifications, events, and premium content, while also driving retention on the core product. CMOs in B2B are catching on — I'm seeing more community-led growth strategies that tie directly to revenue targets. Luna: What about the risk of community fatigue? If every brand starts trying to monetize its community, members might get tired of being sold to. Lucas: That's real. The brands that succeed are the ones that offer genuine value in the free tier. The monetization is for superusers who want more. If you try to monetize a community that doesn't have a strong value proposition to begin with, you'll just drive people away. Luna: So it's a maturity thing. You need a healthy community before you can monetize. Lucas: Right. And that's where many brands get it wrong. They see a community with some engagement and immediately slap a paywall. Instead, they should invest in the community experience first — hire a great community manager, create valuable content, foster connections between members. Once the community is thriving, then you can think about monetization layers. Luna: And the metrics change too. Instead of just tracking engagement, you're tracking conversion to paid tiers, lifetime value of community members versus non-members, and referral rates from within the community. Lucas: Exactly. And some CMOs are even building dedicated community platforms instead of relying on social media. That gives them more control over data and monetization. For example, a fitness brand might launch its own app with community features, rather than just a Facebook group. That way, they own the relationship and the revenue. Luna: I've seen a few startups emerge just to help brands build those platforms. They offer forums, direct messaging, events, and payment integration all in one. It's becoming a category. Lucas: It is. And the numbers back it up. Companies that have implemented community-driven revenue models report an average twenty-five percent increase in customer lifetime value within the first year. That's a compelling statistic for any CMO presenting to their board. Luna: So if I'm a CMO and I want to pitch this to my CEO, what's the one number I should lead with? Lucas: I'd say the one point two billion from Sephora's Beauty Insider. It's a concrete, well-known example. Then I'd follow with your own community data — how many engaged members you have, what their average spend is compared to non-members, and what a modest conversion rate to a paid tier would mean in revenue. Luna: That's a solid approach. And it helps that the trend is still early enough that being a first mover in your industry could give you a real advantage. Lucas: That's exactly right. The brands that figure out community monetization now will have a data advantage and a relationship advantage that's hard to replicate. It's not just a marketing trend — it's a business model shift. Luna: Alright, so for next episode, maybe we can dive into the tech stack behind these communities. What platforms are CMOs investing in? Lucas: I like that. We'll talk about the tools — from Discourse to Circle to custom builds — and what the ROI looks like on each. But for now, I think the takeaway is clear: your community isn't just a cost center. With the right strategy, it can be one of your most valuable revenue assets. Luna: And it starts with listening to your members, not just talking at them. Lucas: Exactly. Thanks, Luna. And thanks to everyone listening. We'll see you next time.