You may have decided that your business needs a customer community and have decided to set one up. But what makes a community successful? And what are the best KPIs for a community? In this post, we’ll take a look at a variety of customer community KPIs and how you can use them to measure your community as it grows.
User-generated content (UGC) is content created by users, usually online, that promotes your brand. It is an important part of growing a customer community because it is authentic, inexpensive, and draws in new customers.
UGC often comes in the form of reviews or posts of people using or wearing your products. UGC drives revenue because it builds trust. The more UGC you have, the more the customers you acquire will trust your brand right away:
Engaged community members create and share UGC on your behalf. So, if the volume and quality of your UGC is high, the health of the community is doing well. But if your UGC effectiveness is low you may want to employ some new marketing tactics. For example, why not use a loyalty program to reward customers for creating UGC on your behalf.
The fashion brand, Never Fully Dressed, rewards customers loyalty points for following them on Instagram, Facebook, Twitter, and YouTube. By rewarding customers this way, new followers will be encouraged to engage in the social content – and even create posts on the brand’s behalf.
You can encourage further UGC by giving customers a chance to contribute towards the creation of products. LIVELY uses loyalty tiers to let their most engaged shoppers vote on upcoming styles.
CPA measures the aggregate cost of a user taking an action that leads to a conversion. Today CPA is going up because of greater competition and customers becoming “blind” to advertising. According to a study by Infolinks, 86% of consumers take no notice of banner advertisements.
The health of your community will be apparent if your CPA is low – and remains that way. This is because, if your community is healthy, they’ll refer people and promote your brand; helping you acquire new customers more cost-effectively than advertising. You’ll also see more member growth over time.
If your community isn’t growing and your CPA is going up it’s time to take action. Ask existing brand fans who left a review of your brand to refer their friend to your store – and tell them they’ll be rewarded for doing it.
The more your customers talk about your brand and create social proof for you, the more your community will grow. Reviews and recommendations are evidence that your brand is legitimate and makes passive shoppers become active community members. This reduces your CPA because new customers that land on your site through acquisition will convert quicker.
Link up your loyalty program with your reviews platform and reward customers for leaving feedback on your brand or products. Annmarie Skin Care has linked its loyalty program with Okendo and rewards customers 200 points when they write a review.
CPA is one of the most revealing customer engagement metrics and can help you kickstart marketing initiatives that encourage further customer involvement like reviews and referrals.
Churn rate is the rate at which customers stop doing business with you. If your community experience isn’t great, you’ll see a high churn rate. This is because you’re not re-engaging community members and encouraging them to make repeat purchases. Churn rate often reveals that you are doing enough to attract customers but you’re not providing enough worthwhile post-purchase experiences or perks to keep them.
To improve your churn rate, give your community members VIP perks that others can’t access.
For example, the ethical and sustainable dungaree brand, Lucy and Yak, gives their community access to a yard sale on their Facebook page. This is exclusive to their community only and promotes further engagement from their customers.
Churn rate is a valuable customer experience metric because it allows you to measure the long-term effectiveness of your product or service. Your customer community will grow as long as you are continually offering fresh and exciting experiences that make your members feel special.
Retention rate is simple. It refers to the percentage of customers who continue paying for a product over a given timeframe.
If your community is healthy, you’ll maintain a high retention rate. This is because they’re active in your community and will come back to make another purchase. If this isn’t the case, you have to position yourself as a brand they’ll want to return to above others. Then you will be able to grow your community in a way that’s sustainable.
Improve your retention rate by showing shoppers how you’re emotionally aligned with them and that you also support causes they care about. Achieve this by letting them donate to a charity via your loyalty program.
For example, the pet food brand Edgard & Cooper’s social posts show customers they can trade in loyalty points to support charitable initiatives.
Their custom rewards let shoppers exchange their points to plant a tree or donate a meal to an animal in need. Watch our interview with Edgard & Cooper to learn more about how they retain their customers.
Retention rate is a great metric to keep track of because it will encourage you to improve your emotional connection with customers and foster a sense of authentic community.
Having a loyalty program will help you measure these metrics before they become a problem and give your community what they want when they want it.
Each of these customer experience metrics, whether its churn rate or retention rate, UGC or CPA, give you the opportunity to get ahead of the game. Apply these metrics to your loyalty program to make your marketing strategies more targeted, purposeful, and effective.
Download the Community Matters report to learn how to create a community that drives a positive ROI with every new member.
Connect with a Loyalty Analyst
Connect with a Loyalty Analyst