Getting beneath the surface of a customer base or audience is the first step in creating a growth strategy. This article from Inc. looks at how different companies have come up with unique ways of leveraging community that lead to business expansion.

All companies have a community around them — whether you choose to engage with it or not. Hear how you can use your most loyal customers as a driver for fast growth.

Some call community the newest “moat” for business today. No matter the sector, a vibrant community not only serves as a defensive hedge against the competition but can also drive learning, innovation, and value. And whether it’s bringing together a group of power users, software contributors, content developers, or a gaggle of superfans, we’re seeing thriving communities lead to greater brand awareness and higher switching, not to mention strong debuts in public markets.

The reality is that buyers have nearly endless options in today’s market, and companies can’t rely strictly on features and pricing to win. It’s why consumer brands like Lululemon and Sephora, as well as enterprise powerhouses like Salesforce and Twilio, have put community front and center in their growth strategies. It’s also why we’ve seen many IPOs in 2021 — including Roblox, Duolingo, Poshmark, Confluent, and Digital Ocean — lead with their communities and show them as essential to their success.

What do you mean by “community”?

The term can mean a lot of things: A support group, a networking forum, an open-source project, and even a tribe of rugby fans could all be considered a community.

A more useful taxonomy is to classify communities on the basis of member motivation, whether it’s related to the product (discussing and learning about specific products, including Sephora’s Beauty Insiders, Twilio’s Champions, or Salesforce’s Trailblazers), a practice (leveling up a discipline or craft, independent of tools or platform, including On Deck and Dribbble), or play (coming together around a common interest, including most communities on Discord or NBA Top Shot).

Understanding motivations for why people gather informs both how a company engages and its overall objectives for its community. Once a company understands its members, it can then determine an appropriate strategy, one that prioritizes creating value for members (e.g., creating content and tutorials, developing training materials, hosting events) versus capturing value for the business (sending drip campaign emails and creepy retargeted ads), a very significant departure from long-held practices.

Community is not the same as marketing

Unlike the traditional marketing funnel, which seeks to push leads through a linear process, extracting value at each stage, community building is about creating an environment so compelling that it naturally attracts people toward its center.

All of this is founded on the recognition that the relationship between brands and customers has changed. It’s not through sales channels and marketing campaigns that people decide which products to buy and which companies to support.

Instead, it’s based overwhelmingly on what they know and love or the recommendations of friends, colleagues, peers they know on social media, or even strangers they happen across online. It’s why we always say that products and services are no longer sold but adopted.

As companies and people rely more than ever on digital channels to communicate and build connections, more companies are embracing the prospects, contributors, and fans they had previously overlooked solely because they weren’t a viable lead for the sales team. 

A new playbook to build community

The existence of communities may be as old as humanity, but this idea and practice of viewing community as a driver of brand loyalty, customer referrals, and user acquisition in a commercial context are relatively new. Early case studies show that when done well, a thriving community can be a means to boost a company’s growth efforts and its value in the public markets.

Take Roblox, which debuted on the NYSE in March. Roblox provides the infrastructure and supporting technology for its global platform, but the game experience is all user-generated content built by its global creator community of nine million-plus developers. This focus on community has enabled Roblox to build a vast world much faster than it could have done so itself and is a significant factor in growing and sustaining 200 million-plus monthly active users. The company has publicly said that its platform is driven by its community, and its unique offering is something Roblox has “built together” with its global community.

Albeit in a different industry, Duolingo, which went public in July, has also built a community around content creation from the outset. The company notably launched 39 new language courses to 50 million learners in less than 2.5 years — all with a team of fewer than 40 employees. That was only made possible by empowering community members to develop, test, and spread the word about language courses, extending its audience significantly in the process. This helped them drive their market cap from $5 billion at IPO to more than $6.1 billion just a few months later.

Beyond those examples, there’s no shortage of community-driven companies among the list of IPOs this year (including Poshmark, Confluent, and Digital Ocean) that exemplify how creating value for members alongside capturing value for the business can lead to better outcomes for everyone.

If you build it, will they come?

The reality is that at some point, all companies have a community around them — whether they choose to engage with it or not. Robinhood, which went public in July, is a lesson in what can happen if you don’t. When you make no home for users to meet and seek support from official channels, they’ll find their own.

The first step in embracing the opportunity is to build a strategy that specifies how an organization will provide value to its members, and then also derive value for itself. This kind of framework can help companies consider why it’s creating a community, who is in the community, and its value to and between members. Only then can you create a plan around conversing with, listening to, and engaging with current customers, potential customers, and those exploring something new.

To help make the concept more concrete, here are some questions to add more nuance and rigor to your company’s community strategy:

  • Who is in our community, and why are they here?
  • Who is not in the community?
  • What value will we create for the community, whether or not they are paying customers?
  • What value will the members provide each other?
  • How will we listen to, talk to, and be directed by our customers? How and where will we deliver insights from these conversations to the rest of the company?
  • How will we incentivize, recognize, and reward participation?
  • What values and norms will we model and do we expect of the community?
  • How can we make our community smarter, happier, or wealthier? Through what programs and through which channels?

Communities are complex systems, which means understanding the relationship between input and feedback can be difficult or not show up for a long time. The act of discussing and debating these questions will bring more clarity and alignment about the purpose and impact of the strategy and should engage teams about how to create value in many forms.

Perhaps most important, this depth of discussion also levels up the very notion of community as something that’s not purely company-centric and transactional (e.g., “good for deflecting support tickets”) but transforms it into something that has the potential to impact every part of the business. When companies create more value than they capture, people learn new things, meet new people, and discover new opportunities, and of course, the company enjoys those benefits too.

This article was written by Patrick Woods from Inc. and was legally licensed through the Industry Dive publisher network. Please direct all licensing questions to legal@industrydive.com.

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