Key strategies and insights for developing a business case
Post written by
Hannes Bünger
|
Nov 10, 2023
Discover different types of communities, create a strong business case, and integrate it into your brand strategy and business model. From increasing website traffic to boosting brand loyalty - explore the advantages these communities include. Whether you aim to drive sales or gather insights, you can leverage the varied revenue streams they offer to achieve your business goals. Connect with your audiences, increase engagement, and drive your brand forward. § Challenges of creating an online community § To build a successful online community that suits your business, you need to choose the right type, align it with your brand, and create a strong business case. This article describes different types of communities, the importance of integration, and revenue generation. It addresses the challenge of linking the community to your business, emphasizing brand loyalty, website traffic, and data collection. § Background § As businesses continue to navigate the digital landscape, the concept of online communities has gained significant importance. But how do you choose the right type of online community that complements your business model, aligns with your brand, and ultimately promotes a strong business case? This article delves into this critical topic, highlighting various types of communities and how to calculate a compelling business case for them. §
Different types of communities
There are different types of communities with various purposes for their members. In our series of articles, we focus on the so-called brand communities.
Communities are everywhere, and most of us are involved in one or more communities in some way, such as through shared interests, associations, or education. Online communities are built on similar foundations, applied in the digital environment.
There are many types of online communities, and it's likely that you're part of one, even if you aren't aware of it. For example, a Facebook group where you share and discuss interests and topics with other members. Online communities are often centered around a clear purpose, topic, or interest. Some of the most common types of online communities are:
Brand communities - a community where people with a shared interest in a product or service meet like-minded individuals to interact, often around a specific brand. Many times linked to the brand's website.
Social communities - a community where people with a shared interest or purpose can meet. A social community often takes place on platforms like Facebook, Twitter, or Slack.
Insight communities - a community where insights are gathered and shared from a group of people, aiming to develop, for example, a product or service.
Support communities - a community where members provide other members with help and support of various kinds, often related to a product or service. Usually created by non-professional individuals who are familiar users or consumers of a certain product or service.
§ The power of online communities § The revenue from a business case is based on the business values you want to create and achieve with a community. A community can contribute to your business in various ways, depending on which business benefits and values you want to focus on. We have identified seven main revenue sources for a community. § §
Driving traffic to your own website
Communities link traffic to your own website, either for more product information or via a purchase button. Linking to different types of content on your website can also be an option. The business case partially relies on the idea of allowing traffic that originates from the community to convert on your own website. If your community is on the same website as yours, the content created by members will help drive traffic directly to your website through better ranking on Google and other search engines.
Increased conversion on your website
If the community generates ratings or reviews, you can expect it to increase conversion on your website by presenting these next to the products. This will generate social proofing, which is an important part of the customer journey.
Loyalty in purchase
If there is a connection between the community and your brand, we know that this will increase purchase loyalty. You can expect active and engaged members on the forum to make a few extra purchases from you instead of from competitors.
Brand loyalty
The connection between the community and your brand will also increase the emotional connection and loyalty to the brand. This usually creates an effect on all customer interactions, such as increased campaign impact, better reach, improved word of mouth, etc.
User-generated content
Producing content is costly in many respects. At the same time, user-generated content is used more and more both to reduce costs and because it is perceived as more authentic. From a business case perspective, user-generated content can both reduce content costs and/or improve the effectiveness of communication. Just remember that duplicating the same content on two different websites degrades the SEO effect and risks reducing search traffic to both the community and your own website.
First-party data
For many companies, access to more and richer customer data may be the most attractive benefit of a community. Members and visitors leave behind a rich and nuanced data flow that can be used for profiling, e.g., product and service preferences and to identify buying signals. To access the best possible data, a common identifier is needed between community members and your customers, for example, a shared login for them.
Insights for development
Conducting ongoing customer surveys can often be costly for companies. Instead, it may be more worthwhile to use your community to gather insights through, for example, polls or surveys, as the members are dedicated brand ambassadors and are happy to share to contribute to product or service development.
Channel for marketing
Forums can also be used as a channel to market your own company. This is especially attractive for product suppliers who lack a direct relationship with customers, i.e., where sales occur through intermediaries.
Which revenue drivers are important to prioritize for your business depend on the circumstances and business challenges that need to be addressed. Focusing on driving traffic and collecting data for personalization initiatives generally has the greatest long-term potential.
Align your community with your brand and business model
Depending on the business benefits you want to achieve, there are different choices and decisions to be made about how you want to link the community to your brand and business platform. At Remotion, we have formulated a business and platform model for communities, showcasing different approaches that various companies have used to design their online brand community strategy. (Figure 1)We have also observed that there are varying degrees of connection between a brand's community and the business as follows:
Separate brand with no connection to the company
A community can exist independently with its own domain and brand. An example of this is boktipset.se, which is run by Adlibris. The primary benefits are getting product reviews and user-generated content, such as reviews.
Own brand with a connection to your brand
A common way to create and facilitate the connection between brands is to use "powered by" or "part of." Nordnet, for example, has used this solution for its forum Shareville. In this solution, it becomes more natural to link traffic between the sites and drive loyalty and strengthen the brand.
Joint brand and an integrated part of your website
An option is to add a community directly to an existing website. An example of this variation is Beauty insider, which is an integrated part of Sephora's website. The advantages are that traffic from organic search goes directly to your website and the conditions for data collection are better. However, the risk is that the forum might not appear independent and genuine, making it difficult to recruit new members.
An integrated part of the business model
A community can also be an integrated part of the business model. Vivino is a community and a shopping platform in one. One cannot be separated from the other. For Lululemon, the community is their main marketing channel, and for Revolution Race, the community is an integral part of product development. The growth for businesses with this business model has in several cases been very significant and fast.
Add social services on your website or in your app
There is also a light model where you add simpler social services and features on your website or in your app. This could involve rating and reviewing or following other users. Asics' running app Runkeeper is an example of this.
In summary, it is valuable to define your start model and plan for future changes. Gradually merging a separate brand with your own is feasible. If your company is considering creating an online community, it's important to understand potential members before deciding on a platform, name, and brand for a successful launch. Here are our recommended steps:
Understand the purpose and business model of your community and the business goals it should achieve
Define the values and features the community should create for the customer
Create a strategy for recruiting members along the way
Identify the needs for technical platforms
We at Remotion can help you conduct a feasibility study and a business case for your business and help deepen your knowledge of online communities. This is our second article in the series on online communities. You can find the first article here. In the next article, we will cover the following area: