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Harnessing the power of a community model of business

Posted by Grace Townsley

January 5, 2022

A sense of community unites people in a unique way. When individuals find a community full of others who have same interests and goals, they become very loyal to those groups. That’s why businesses that have tapped into a community, or created their own, have seen powerful growth as a result.  

What are the types of community business models?

Community business models are similar to market segmentation. But while market segmentation breaks a business’s audience down into a few narrow, homogenous groups, community business models divide the market into similar-interest groups. Once you’ve identified which model best fits your business, you can leverage that model to create a community around your product or service.

Physical community model

The physical community business model looks at how your business’s physical placement in your city determines how you market. For brick-and-mortar businesses that can appeal to a broad range of people, like restaurants, convenience stores or banks, focusing on leveraging your specific physical community can lead to significant growth. Hyper-local advertising like billboards, coupons and parking lot displays can help businesses that focus on the physical community model grow.

For example, an ice cream shop can be set up near a school and neighborhood with young families, knowing their physical location in the community is convenient to their target market. If they put up signs around the area, mail a buy-one-get-one ice cream coupon to everyone in the nearby neighborhood, and set up an eye-catching parking lot display after school, they’re likely to see an uptick in business. 

Professional affiliation community model

The professional affiliation community model looks at how a business can cater to a specific career field, career goal or other professional need. Medical supply companies and marketing companies that cater to real estate agents are two examples of businesses that can be built on the professional affiliation community model. 

This community model can be even more effective than the physical community model, because a professional community can be much larger than the service area of a brick-and-mortar business. Plus, members are more likely to be willing to make purchases within a professional community because the return on investment is clearer. 

Internet community model

The internet community model is built on how the internet can help people from around the world unite and connect virtually. The internet can connect any group of people, from dog-lovers or stay at home moms, to anime fans and people who like movies. It’s easy to see why internet communities can quickly dwarf physical and professional ones. But it’s also challenging to harness the power of internet communities – with so much competition and distraction, they can dissolve as quickly as they start.

Tapping into the power of community

Businesses that develop a sense of community or tap into an existing community have true staying-power for a few reasons:

  • Word of mouth marketing.

    In a community, members tend to invite other people to come along and join. Your members likely have friends and family who also share the same need, goal, or interest, so these community groups tend to grow over time. In fact, people are 84% more likely to trust a referral from a friend. And best of all, this form of marketing is free!
  • FOMO.

    People crave being a part of a community, whether it’s personal or professional. And the fear of missing out drives many to join groups like professional associations, interest groups, and nonprofit initiatives. 
  • Access to the most accurate source of data – member conversation.

    As community members connect with one another across platforms like social media, you have the opportunity to see what they really think and how they’re using your product, hear what they’re asking for and recognize new needs. Plus, this community offers a great place to product-test or soft-launch new services. 
It takes time to develop a healthy community around your brand, but the results are unarguable. Businesses that create or tap into community can grow faster and stronger than businesses that focus only on market segmentation. 


Grace Townsley
Grace Townsley

As a professional copywriter in the finance and B2B space, Grace Townsley offers small business leaders big insights—one precisely chosen word at a time. Let's connect!

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