4 ways online communities increase customer loyalty
In 2012, a University of Michigan study found that a branded online community grew businesses by 19%. Here are four advantages of online communities for your brand.
In 2012, a University of Michigan study found that a branded online community grew businesses by 19%. Now, like my year 12 geography teacher always said, define the terms you are using upfront. When I’m talking community here, I’m talking forums and other brand-hosted spaces, not social networks. The study found that the community encouraged more frequent spending rather than larger purchases. And the more connected a member was, the greater the value of their spend over the 15-month period. So increasing loyalty and retention, and subsequently customer lifetime value, is a key benefit of forums.
Here are four advantages of online communities for your brand:
Quite frankly, if your online community is not customer-led, it ain’t a community. So whilst it might be obvious to say that communities put customers first, that doesn’t make it any less significant in regards to increasing loyalty and customer satisfaction. Because what better way is there for a business to show that it trusts its customers? Online communities empower your customer by placing them in the driver’s seat where they’re free to ask questions, provide answers and share resources – not only with you, but with their peers. And trust me, treating them like the adults they are and allowing them to do that will win their loyalty.
To turn consumers into advocates, a business should allow a consumer to give back to the business they love. Until recently we’ve not had the opportunity to truly engage businesses with customers. Brands use surprise and delight campaigns but struggle to find real ways to develop conversation beyond branded content. Psychology tells us that relationships require reciprocity. Think of it in one-to-one terms: when someone tries to win you over and it’s all one-sided, how does that make you feel? Awkward, right? Even if you want to be won over, if the attention is heavily unbalanced, it’s downright uncomfortable. An online community allows customers to do this by helping their peers, producing content, and encouraging word-of-mouth all on behalf of the brand they love. By engaging with their customers on a human level through online communities, brands will organically foster advocates to the point that those advocates identify as a core member of community. Ask Harley-Davidson or LuluLemon, they’ll tell you.
Did you buy a brand of cling wrap last year and find the ‘new and improved’ placement of the metal cutting edge was a distinct non-improvement? Thousands of Australians did and it irritated them multiple times a day. In future, Gladwrap could build a community with a content pillar for recipes made out of leftovers, and next time they consider updating their product, their audience will be there waiting for them.
An online community can act as your product advisory council or crowdsourcing platform, allowing for collaborative innovation. Not only that, but asking for opinions and listening to ideas will intrinsically reward all those members involved and further foster their loyalty. Lenovo forums are a great example of this.
Your customers are already talking, and it may not be where you can access their feedback or respond to it. For example, your product might be being discussed by a mother’s group, or reviewed in a different online community like Whirlpool, Tripadvisor or Vogue. By offering your customers a space to talk openly, you can boost engagement and turn chatter into a productive dialogue. I’m looking at you Nutella – we’d love to build a forum for you!*
In summary, this is the age of community-driven business: a fact underpinned by the Gartner Research study that estimated 80% of businesses would be competing mainly on a customer experience basis in 2016.
Communities do not happen by accident, no matter how many times their exponential growth makes onlookers think a business has ‘sprung out of nowhere’.
The power of community hasn’t changed, it’s there for anyone long-sighted enough to tap into it.
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