Creating customer communities: The secret to long-term revenue

PSA: Building a robust customer community can drive revenue and add value to your brand!

Some merchants think that community is a flimsy concept that doesn’t get you results. But we’re here to change your mind. Focus on creating a valuable experience for your community and you’ll see improved engagement and sales. 

What’s even better is that now’s the best time to invest in your customer communities too. The pandemic has physically separated us from the communities that we have relied on for many years. People have been turning to online spaces to get that sense of community they’re lacking and to engage with other people.

While the in-store experience has vanished, brands have been investing in their online customer communities to connect during the pandemic. 

 “Virtual brand communities — online destinations where a brand’s fans can create and share content with others who share a love of the brand or a common interest — are the perfect solution for companies looking to build close, long-term relationships with their customers.”

If you have either a) dismissed communities as a vanity metric b) overlooked them or c) are unsure of this approach we want to show you the value of creating customer communities and why it’s your untapped revenue stream.

Online communities: The center of our daily lives

Online customer communities are a space for people to get together in the virtual world and engage. There may be a particular initiative or cause to get behind. Similarly, the community might be based around an experience or product. 

Customer communities outside social media sites are increasingly important. You don’t want to be wholly dependent on Instagram, Facebook or Twitter to drum-up excitement and host your community. 

Brands should create or participate in community forums outside the walls of social media networks. Audiences [in online customer communities] are focused, authentic, and receptive to genuine interactions with brands.” 

Understandably the pandemic has brought the online world to the center of our daily lives. As a result, online retail is booming. Communities are a vital part of that boom. 

Cult brands like SoulCycle, CrossFit, and Peloton saw incredible success not because everyone suddenly decided they enjoy fitness over watching TV. They did so because they threaded the community into the core of their identities and provided a community of like-minded people, something their customers crave”. 

This is especially true for young people. A 2019 Spotify study found 62% of Gen Zers and millennials believe brands have the power to create communities based on common interests and passions.

Online communities for customers build a sense of hype and excitement around your brand. This is a vital commodity and hard to develop elsewhere unless you’re already a major established brand.

From “me” to “we”: What is a customer community?

With the world becoming more fractured, consumers are looking for ways to connect with others around brands. 

“Making connections with other people who have similar interests (66%) is one of the primary drivers behind why users engage in” online customer communities. They are looking for a shared experience that adds value to their lives beyond the purchase of a product or service. 

We’re shifting from an era of “me” to an era of “we”. For so long, ecommerce has been obsessed with personalizing the shopping experience. The obsession grew as technology advanced and before we knew it the “me economy” was hot on everyone’s lips. 

But lately there’s been a shift in this messaging. Customer priorities have changed and they see shopping as a team sport. 76% of customers say that for them to be loyal to a brand, they need to trust that if they recommend it to a friend they would have a good experience. They want to know that you can serve not only them but also others around them. And so, the “me” economy, quickly becomes the “we” economy. 

If you connect shoppers around a community of shared interests, they’ll exhibit more brand loyalty as they have ample reasons to return to re-engage and repeat purchase. They will want to engage with like-minded folk and will enjoy feeling part of a community. 

Compared to social media platforms, online community site’s conversations were regarded as more meaningful, its atmosphere judged more respectful, and users felt more able to be themselves and respected by others in turn.” 

What is zero-party data – and why is it important?

Gradually, more and more limits to collecting data are emerging. A prime example of this is the new iOS 14 update

Apple introduced a feature called “App Tracking Transparency” that allows users to opt-out of their data being tracked. This may be a major hurdle if you only have one strategy for attracting customers. But this also places an emphasis on creating meaningful connections on your own website that make customers less hesitant to give over data. 

Zero-party data is when a customer “intentionally and proactively” shares their information with a company. This kind of data is extremely beneficial to a brand as it’s owned by them. 

If someone’s a member of a customer community they’re more likely to trust the brand and share their data. “80% of consumers say that a brand using their data in a helpful way is more likely to secure their loyalty”. You can earn by collecting zero-party data and use it to improve the customer’s experience. 

All in all, this means that your brand can serve personalized experiences. This could include tailored product recommendations or personalized emails. You can also create a better UX that draws shoppers back to repeat purchase. All in all, you can use zero-party data responsibly to connect with those that matter.

Customer communities are your best marketing tool

Customer communities give you the best feedback to better optimize your product. In fact, 71% of companies use their customer communities for market research. Customer communities power marketing as you hear straight from the horses’ mouth. 

Highly engaged community members are the people most familiar with your brand and your product. By listening to their feedback you can avoid making marketing mistakes and overspending on fruitless advertising strategies. 

Community members, once invested, share your brand with others and are therefore a cheap way to acquire customers beyond costly advertising. “If you look at how LEGO maintains its community, you’ll find that customers are encouraged to share their own ideas and be collaborative with one another.”

Foster a sense of creativity within your community, like Lego Ideas, and let your customers vote on the styles you release next. They will be more inclined to promote your brand if they feel you value them as a community member and decision-maker, not just as another customer.

Success through engagement

Today, people want to engage with brands that are conscious of what’s going on in the world around them. “68% of customers said they are motivated by knowing that a brand shares the same values as them”. When you can engage with a customer on an emotional level then you can sell to them too. 

Your loyalty program can intersect the goals and values of your online customer community. Particularly because “62% of people would join a loyalty program if the rewards had a positive social impact”.  

The popular cosmetics and beauty retailer Sephora has the pinnacle of a customer community. Read more about it here.

They engaged members of their Beauty Insider Community in the early days of their brand. It now contributes to their tremendous success because it’s all “about being part of an elite beauty community” and members get access to exclusive launches and deals. They have created an allure and prestige about their community that really works. 

The secret to long-term revenue 

The ecommerce landscape is changing. One of the best ways to adapt to the changes is to invest in an online customer community. 

People are taking less of an individual approach to their online shopping habits. They want to be part of a community and they want to be part of something that matters. They will only part with their data if they know that you are using it for a good cause. 

The rise in online customer communities is an opportunity for brands to strengthen loyalty and increase revenue. A thriving customer community built around something meaningful and rewarding could be the lift your business needs. 

If you’re ready to start building up your customer community with a loyalty program at your side, book a time to speak to a member of our team and we’ll set you on the right track.

About the author

Mollie Woolnough-Rai

Mollie is a Senior Content Marketing Executive at LoyaltyLion. After graduating from UCL in 2016, she has worked both in-house and at marketing agencies providing expertise in content for both B2B and B2C clients. At LoyaltyLion, Mollie manages our content, making sure our readers get the best quality resources about customer loyalty and retention.

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