7 surprising things an online community will do for your business
What can an online community do for your business?
According to the 2015 State of Community Management report, most branded online communities are created to respond to customer service. And sure, “rude, incompetent and rushed service” is the number one reason customers cite for leaving a brand, so that makes sense (Gallup). And sure, Lenovo’s online community does have 50 pages of discussions about its pen products alone so there’s clearly a place for taking your customer service to a forum. But Quiip knows communities and we know that customer service is only the tip of the iceberg. Here are 7 surprising things that an online community will do for your business.
1. Make you money
That’s right, communities make money. Make, not just save. Now I can’t tell you the specific ROI, because I don’t have your company numbers in front of me and, of course, a community is one of several touch-points for your customers. But I can tell you:
- Increased engagement on community sites can result in 25% increase in revenue (MSI Study)
- Loyal customers are worth up to 10 times as much as their first purchase. (Source: White House Office of Consumer Affairs)
- Increasing retention rate by 5% can increase profits by 95% over long-term (Harvard Business Study)
- 80% of future revenue will come from 20% of your current customers (Gartner Study)
- The probability of selling to a new prospect is 5-20%. The probability of selling to an existing customer is 60-70% (Source: Marketing Metrics).
- Just ask Sephora; their members spend twice as much as non-members, and their superusers spend 10 times as much.
2. Attract and keep great staff
Everyone knows recruitment costs a bomb, and heaven forbid that your new employee jumps ship within the first 12 months and you have to go through it all again. In fact, Gallup estimates that it can cost up to 150% of an employee’s salary to replace them.
But should you have to go through all that, imagine having a pool of people who love your organisation and your products to hire from. And of course, the community would know many other suitable candidates and would recommend your organisation so the quality of your hiring pool goes up, whilst costs go down.
Of course, this is how Quiip works. Our Quiipees have been building communities for up to 10 years and in that time have grown an industry-specific network of around 2500. This pool has provided us with stellar new Quiipees over the years.
Harley-Davidson’s community is another fine example of this; since the community started in 1985, employees have become riders and riders have become employees.
Alternatively, you could keep your great staff in the first place. Showing you trust your employees by allowing them to post in the community will boost engagement and loyalty in your organisation. Plus, content shared by employees is 8x more engaging than brand voices (Eddington-Trust Report). Win-win.
Using Quiip as an example again, and bear with me whilst I get a little meta, our community managers manage our own internal community which is one of the reasons we’ve only had one resignation in 6 years. Clearly, this is excellent news not just for our team but our clients because when building a community, long-term relationships are more productive than high-churn ones.
3. Win you awards
If you’ve got a successful or growing business then winning an award may seem like an unnecessary cherry on top of all your icing. But of course, just because you know how great you are, doesn’t mean all your potential customers do.
Winning business awards raises your brand to a new level; firstly, it builds credibility because you’ve been vetted by a third party, and secondly, it generates positive PR because your award sets you apart from your competitors.
Communities are innovative and the way forward. Plenty of award panels know this. Whether it be an industry related award like the Webby Awards or an audience related one like Money Magazine, manage and invest in your community well and shower in the praise you deserve. Take it as far as you want – Hitrecord won an Emmy for their communities work.
4. Be your innovation department
Imagine you are enjoying your favorite app/kitchen appliance/stereo/cookie and you suddenly have an idea that would improve it. Or you have a problem and think the maker of your favorite app/kitchen appliance/stereo/cookie would be the best person to solve it. The light bulb above your head is pinging away, but it begins to fade when you think about how awkward it would be to actually communicate this piece of genius to the company.
Well, this happens every day: people who love your product aren’t given the opportunity to help you set yourself apart from your competition. And yet, Quiip knows that one of the best ways to grow a community is to highlight how they can use their existing skills and experience to tackle a challenge that impacts the group.
According to MIT, up to 60% of commercially successful innovations can come from your community. If your consumers are coming up with your new ideas instead of expensive research and development, it’s not hard to imagine the size of the impact that could have on your bottom line. Heineken achieved this with their “Reinvent the Draught Beer Experience” where thousands of customers helped Heineken improve its product. GiffGaff did something similar with an ideas lab online and received hundreds of ideas, some of which led to unprecedented mobile products.
As an added benefit, if you let your customers help or serve you, you let them build the take the relationship to the next level. Think back to when someone was overly keen to do everything for you in a relationship or vice versa; how awkward was that? We build much stronger relationships when both parties help one another and the same applies to company-customer relationships.
So follow the advice of Alan Weiss and “ask your customers to be part of the solution, and don’t view them as part of the problem.”
5. Create user generated content
The holy grail! For community managers, user-generated content shows that they’ve build a healthy, sustainable community that may achieve many of the points above. It shows that your members feel safe and creative, no small task. Because you are not having to create as much content yourself, you can spend more time focusing on broader business and marketing objectives.
For everyone else in the company, user-generated content means increased word-of-mouth, engaging with influencers, increased brand loyalty, and potentially a great PR story to create positive brand sentiment.
When Angela Arhendts took charge of Burberry in 2006 and needed to update the aging brand, she used The Art of the Trench to collate user generated photos of their products. Burberry reported that ecommerce sales rise by 50% year-on-year.
No matter the size of your company, you’ll be surprised by the willingness of your customers to be part of something if you handle the community correctly.
6. Finance your projects
Listen up, not-for-profits and start-ups. Got a new product you want to launch but don’t have the cash flow? Or aren’t willing to risk it without some more concrete support? If you’ve got a strong community who are deeply engaged, they’ll want you to get onto Kickstarter or Pozible so they can show you how much they love your idea. In fact, Outdoorseiten started off as purely a community and then developed its own outdoor goods.
Yes, there are those who argue that established companies shouldn’t have a place on crowdfunding sites, but I believe that if you show you are using the platform authentically to support a new designer or an emerging technology, you’ll take the edge off the haters.
7. Save a species
Once you get down to it, there’s really nothing a community can’t do. Want to save lions and tigers? Help the National Geographic by using the hashtag #5forbigcats. Want to bring back a favourite TV show? Ask the fans of Firefly and Chuck how that went. Want to name a whale? Mr Splashypants owes Reddit members one for that. And for the Kiwis out there, Choc-ade sold 300,000 packets of biscuits in one week thanks to it’s loyal community.
What to know more about how an online community can help your business? Contact us today!