Of all the business strategies that have emerged during the age of the Internet, few have been as impactful as community.
The advantages of developing a community around a product or service are myriad: increased engagement, retention, and lifetime value; defensible business strategy; valuable customer insights and product feedback.
At its core, community creates opportunities for people to form meaningful connections while enhancing their experience of a product. At its most powerful, collective action and consumption can upend traditional industries causing social and economic shifts.
Designing a community that not only bolsters your business, but impacts people on a meaningful level, doesn’t just happen on its own, and it’s tricky to get right. The challenge is two-fold.
First, as a company matures its top priorities often shift. For example, product development is paramount in the early days of a startup, while later stages may focus on sales and marketing. As community can provide valuable support for these efforts, tactics can vary considerably.
Second, as new people join while others cycle through, the needs of the community change. Thus the approach and execution of community’s foundational elements – engagement, advocacy, ambassadorship, loyalty – must evolve with the needs of the constituents and the goals of the business. So, the question is: what to do when?
I’ve developed a four-stage framework for understanding the evolution of brand communities that correspond to phases of a company’s growth. In each of these stages, we’ll explore how companies from fledgling startups to Fortune 100s have harnessed the power of community to shape, grow, and innovate their businesses.
The inception stage is full of great unknowns. You don’t yet know who’s going like your product, how they’re going to use it, and what they’ll want out of interacting with others in the community.
Go where your target users congregate online or offline and join the conversation. Then select alpha testers who you think could be in your target market. They’ll be best able to evaluate the merits of your product and offer important insights on how to improve to increase adoption within a particular market segment.
Say you’re launching a workout app. Where would you go to recruit workout buffs to test your product? The founders of fitness app Fitocracy posted to the /r/fitness Reddit community asking for feedback. It was in this way that they acquired their first few thousand community members. Clever, right?
2. Getting to Product/Market Fit
Venture capitalist and startup pundit Marc Andreessen famously declared that in business “the only things that matters is getting to product/market fit.” How do you know if you’re on the right track? What are the early indicators that community is adding to your product experience?
Most online communities are built around the exchange of information, goods, or services between users. The strongest pull for people to return are going to come from their fellow user because this is where the most value to their brain, pocket, or reputation will come from.
In the early days of Yelp, we noticed people organically started sending “thank you” messages to reviewers. Realizing that this was gratifying to the reviewer and often spurred them to contribute more, the product team developed a feature to easily enable compliments from user-to-user. Director of Community, Nish Nadaraja, then asked the community for suggestions as to what the compliments should be. As you can imagine, everyone was fired up to send ‘em when they were released! Encourage your community to participate in the co-creation of their world.
A successful product and thriving community relies on people coming back, often and regularly. Venture capitalist Fred Wilson revealed that all successful companies in his portfolio boast the following activity: 30% once per month, 10% every day, 10% of daily users use the product concurrently, regardless of the category of app or website. Remember: if your product and community aren’t sticky enough, growth will be a wasted effort.
3. Scaling Sustainably
Once it’s clear that people want what you’ve built, it’ll be time to dial up the knob on acquisition. Your community can be a valuable asset for helping spread the word and adding a force multiplier to support efforts.
Savvy companies have employed community mechanics to get the growth flywheel going. Marketers are all abuzz over the K-factor. This refers to the number of people your users successfully refer to your business. Advocates drive free, authentic word-of-mouth marketing to their friends and family. As personal recommendations are the number one factor in influencing purchasing decisions, there is no question that this type of virality affects your top line.
Many products have employed a two-sided referral program to great success. Dropbox credits much of their growth to this type of referral program: invite a friend and both benefit from free usage of the product. E-commerce companies can use free tools such as Curebit to launch these programs in a jiffy.
4. Maintaining the Lead
No doubt it’s a thrilling ride to market leader, though companies that achieve this position will face unique issues not seen in other stages. These are often normal growing pains, but they must be addressed lest the product and community experience decline. Loyalty and retention is key!
Keeping on top of customer service is a considerable challenge for any thriving business, particularly so for those that have many offerings or products. For Sony Europe providing support for thousands of products was a considerable feat. They created an online support forum as a solution, but struggled to get employees to participate. As it turned out, the best support came from other Sony users.
Sony shifted their strategy to focus on cultivating these super fans. They put on monthly trainings, hosted exclusive launches and meetups, gave first looks of new products, and even organized all-expenses-paid conferences where super fans met with executives and developers. While it might seem an extravagant spend, each super fan has answered thousands of inquiries, saving the company millions in support costs each year. With a success rate of 85%, the arrangement was a win for company and customer alike.
These are just a few examples of how companies at various stages have employed community to shape their products and grow their businesses. For a deep dive into community strategy, tactics, and metrics join me at Community Manager CampAway on June 26.