Community
Leverage the power of community to create the ultimate sense of belonging and an evergreen referral machine
With normal life potentially only a few months away for those of us in the UK, everyone is looking forward to meeting up in-person again and sinking a few pints in a beer garden (hopefully whilst England are winning the Euros).
At our most primitive, humans want to belong to groups. Whether that's down the pub or supporting a particular cause, we like to have others to bond with. This helps to explain the recent phenomenon of 'Community' in the tech world, with platforms like Reddit, Discord and Slack increasing in popularity to ensure people are connected.
It's official: Head of Communications is out and Head of Community is in.
If you take a few moments and look around you, you'll see a lot of the best brands have a loyal sense of community. Sometimes bordering on a cult. People who dress head to toe in merchandise and shout about the company in question at any and all possible opportunities. Perhaps the product is superior to its competitors, perhaps it's not. To these devout fans it doesn't seem to matter.
Have you ever asked someone what phone or laptop they use and they're 100% Apple and snigger at any mention of Microsoft, Google or Android hardware? That's what I call an Apple fanboy and is a subset of community (full disclosure, I'm writing this on a MacBook Pro). This fierce brand loyalty is a huge benefit to Apple.
So what is community exactly? And how can you leverage the benefits of community at your venture?
What is Community
A Tweet from David Spinks sums up Community vs Audience quite nicely:
Building an audience = helping people
Building a community = helping people help each other
Most companies have audiences, only a few have thriving communities. If you want to have a community strategy (and you should), then you need to ensure that you're providing the platform, interaction and support to let people feel empowered to be a part of, and contribute to, your community. Otherwise it's an audience. Community fosters a sense of belonging, a commonality between the group, and shared learnings.
In the world of Everything-as-a-Service, it's important that companies continue to deliver ongoing value to their customers. In a subscription model the customer is paying on an ongoing basis for the service and therefore is conscious of any dip in value as the dollar comes out of their bank account frequently. Compare that to a traditional goods purchase and once you've bought it, you decide whether or not you are happy with the purchase (returning if need be) and that's that. The way I see it, community is an important strategy for any company but it's crucial for subscription models.
"Community isn’t a single Slack group or event or newsletter. It’s an aggregation of all of these touch points, and includes both customers, eventual customers and one-time users." - Natasha from TechCrunch
Natasha's point above is key. A regular newsletter (like this one) doesn't result in a community. The activity needs to be broader, and the goal to encourage the audience to talk to each other, turning themselves from an audience into a community. There should be social media groups to encourage participation, there should be company events created solely for the benefit of advancing the community, and there should be regular meet-ups to help foster the sense of belonging. Have a hashtag, sell t-shirts, spread the word. This activity will most likely need to start at the company level, but the best communities end up branching out and having sub-communities run by members, rather than the company.
Benefits of Community as a Strategy
There are two main benefits to having Community as a strategy:
Cheaper Cost of Acquiring a Customer (CAC), as the community will tell their friends and share knowledge of your venture for free; and
Increased stickiness of customers, as they won't want to miss out on the ongoing benefits of being part of a community, boosting your retention.
In early stage ventures, acquiring customers is the name of the game. Certain avenues will prove too costly and therefore are not sustainable. This is typically measured by CAC. CAC needs to be offset against the amount of revenue that the customer gives you to ensure that you're maintaining unit economics (unless you're a hyper-growth company that is prioritising rapid customer acquisition at the expense of burning through VC money to get to your next round). So organic referrals reduce your cost, whilst maintaining the same level of income. It doesn't take a genius to work out that that's a good play. Enter Community.
Having users tell other users about your product or service also has the benefit of removing the company from the sales process. A company salesperson telling you that the company is good vs a neutral party who uses the company saying that the company is good - which one would you be more likely to believe? This point can't be overstated as it's a tremendously powerful benefit of organic referrals.
To illustrate the power of community as a strategy, let me use Tesla as an example. Out of all of the car brands I'm aware of, no one is as vocal as Tesla owners when it comes to shouting about their cars. When was the last time you heard a passionate Ford owner at a dinner party? The r/teslamotors community on Reddit (another company that leverages community) has over 1M subscribers. By comparison Ford has 50k and Ferrari has 23k. There is also a Tesla Motors Club run by Tesla owners, who arrange in-person meet-ups worldwide. This gives Tesla a great advantage over its competitors.
This community also makes Tesla owners (and aspiring owners) feel part of something greater than mere car ownership. Drive your Honda Civic off the lot and you own a depreciating asset. Drive a Tesla off the lot and you're part of the Tesla Community. This results in you both talking about the car to others, and you being less likely to change brands as other brands just don't have that level of community.
Peloton - a great example of a successful community
A few weeks after the Covid outbreak in March 2020 I decided to buy a Peloton. I'd heard a lot about the brand and needed a way to exercise during the pandemic with gyms shut, and I have a knee that doesn't permit much running. A day or two into my new life as a Peloton owner, and I realised the power of their community. The classes are fairly addicting and posting a quick tweet got more engagement than my usual tweets, merely because of the wider Peloton community.
For the uninitiated, Peloton is a stationary bike with a large screen attached to the front for live and on-demand classes. They have the usual peppy, athletic, 20-something instructors, and background music to help motivate riders.
There are a few things about Peloton that makes it more of a community than typical fitness brands:
The live spin class instructors shout out people who are working out at home, making you feel part of something greater;
There's the functionality to high-five and connect with other riders, live during the class or afterwards;
Their social media handles showcase users in their own homes and when they hit milestones, making them feel special; and
There are sub-communities in the wider community through the use of hashtags. Are you a mum? Are you into wine? Are you a veteran? There's a hashtag for that.
"Peloton has somehow fostered a level of intimacy not often found in a real-life studio, where participants are usually eager to leave the room immediately rather than spend 20 minutes telling the instructor how they changed their lives." - Olivia Petter
Some Peloton owners are fanatics enough to fly out to their Homecoming event, paying for flights and hotels at their own expense. All to be part of the live community. Many of them place more emphasis in terms of value on other Peloton riders or the Peloton instructors, rather than the actual bike itself.
This sense of community is also adopted by the buyers themselves. Tweet something out and #Peloton and you will get a response from passionate Peloton owners. This is a key part of their success and given their recent valuation of $27bn, you've got to say it's working.
Parting Shot
If you're a subscription business, having a community strategy is a no-brainer. Lower CAC and greater retention is an investor's dream. But it's important to get it right. End up 'white-washing' via community to improve your own reputation and your community strategy will compound the negativity of your reputation.
As with any good execution, you need a plan, adequate resource, and a consistent cadence to start to get traction in your community. Make people feel a part of a wider movement, and to have a sense of belonging to your brand will take your venture onto new heights.