Over the past few years, businesses have begun to realize how powerful community really is. The sense of belonging, loyalty and camaraderie that a dedicated community creates unites their customers, strengthens brand awareness, and gives businesses true staying power — three benefits that can prove invaluable in times of market turbulence.
In this article, we’ll look at how customer communities benefit the businesses they’re built around, and how your small business can harness the power of this growing trend.
What is a customer community?
A customer community is a group of loyal buyers who are united in a unique way — by the niche interests, goals and needs they have in common. That loyalty and buy-in among members is why businesses that leverage community are reporting significant growth and customer retention.
In a report on startups, nearly 80% of B2B entrepreneurs agreed that building a customer community was important to the success of their business — and 28% believed community is essential to their competitive advantage. Businesses built on a thriving customer community also report increased brand loyalty, lower customer support costs, stronger awareness and better brand recognition. Those are valuable benefits for growing small businesses!
Is community becoming essential for business growth? One study suggests so.
In a 2020 report by Harvard Business Review, community was revealed to be one of the biggest predictors of business growth. The study cited businesses like Salesforce, Harley-Davidson, and Codecademy as examples of companies that have successfully created a community-style following of customers.
In these communities, customers help each other troubleshoot issues, compare use cases, talk about their favorite features and benefits, and even upsell one another on new products and services. For the companies that lead these communities, the benefits are undeniable. Millions of customers have developed connections to these brands — and their businesses have the retention and loyalty to prove it.
How can your business create a sense of community for your customers? Start with these three steps.
Any business with a clear and valuable product or service can develop a loyal community with the right tools, a little intentional effort, and a few brand advocates. Here’s how:
1. Choose your platform. Some businesses build their community using a communication tool like Slack. Salesforce, for example, is a giant Slack community with tens of thousands of members. You can also leverage a membership platform like Kajabi, or social media platforms, like LinkedIn or Facebook. As a rule of thumb, the more tailored and accessible your community platform is, the more valuable it will be to your customers!
2. Get early buy-in. To begin building your community, invite a few loyal brand advocates to start attracting customers to your group. A brand advocate or affiliate can be up to 3x as effective at encouraging engagement and buy-in than a regular happy customer, so this is a valuable strategy to leverage early on.
3. Listen for feedback. As the leader of your community, you’ll have full access to see the conversations, reviews, feedback and engagement of your members in real time. As you listen to your members, adapt your community to fit their preferences and motivations. If they want more educational resources, provide them! If your community is asking for events or opportunities to engage with other members, create interactive spaces. The more you can shape your group to meet your customers’ needs, the more effective it will become.
With this community-building strategy in place, your small business can build the kind of engagement and brand interaction with your customers that pays for itself for years to come.
What are the best benefits of creating a community around your business?
Businesses that successfully build a community for their customers have a true advantage over their competitors for three big reasons:
1. Access to free marketing. Potential customers are 84% more likely to trust the referral of a friend, family member, coworker or network connection. And customers who enjoy engaging in your community are more likely to refer that community (and your brand) to those around them. As your community grows, you gain increased access to automatic marketing and invaluable word-of-mouth referrals, which reduces your marketing costs and increases your customer acquisitions.
2. Reduced cancellation and refund rates. In engaged communities, customers tend to support other customers. This can help reduce your requests for refunds or exchanges, as customers work together to troubleshoot challenges and offer helpful guidance. Not only does this boost your revenue — it can minimize your customer support costs.
3. Access to high-quality unique data. The conversations your customers have within your community are an invaluable source of data on customer preferences, behaviors, purchasing patterns and more. Plus, your dedicated community can work like a focus group, giving your team the opportunity to beta test new products and soft-launch services with a small group of loyal customers.
With these strategies in mind, community can be your biggest competitive advantage
Today, small businesses can no longer rely on traditional marketing and advertising strategies alone. It takes a personalized, hands-on approach to capture the attention of customers — and build the loyalty you need to outlast your competition.
Want more? Since 2006, Escalon has helped thousands of small businesses scale faster with our back-office solutions for accounting, taxes, HR, payroll, insurance, and recruiting — and we can help yours too. Talk to an expert today.
This material has been prepared for informational purposes only. Escalon and its affiliates are not providing tax, legal or accounting advice in this article. If you would like to engage with Escalon, please contact us here.