The Significance of Brand Communities
The famous Lego is known for its creativity and innovative models. But even with a truckload of creativity, there is always a phase where you might run out of brain juice — and they faced theirs in the early 2000s. That’s when they launched a virtual community for all their fans and customers, LEGO Ideas. The crowdsourcing platform received over a million suggestions from fans, entering a competition for the best idea, based on votes. The rewards? The winning creator could be on the approval committee for the final product, would be displayed on all promotions and packaging, and even receive a part of the profits received by sales.
This brainwave using the community for co-creation did not just provide LEGO with an endless supply of ideas, but also instilled a deep sense of loyalty in their fanbase, provided them with a lot of positive media traction, and saved them from a serious downward spiral.
?But why are brand communities important to every business?
Brand communities provide a common space for consumers, nurturing loyalty and emotional investment in the brand. Through this attachment, a business sees increasingly high lifetime value of customers, over a period of time.
The conversations customers have within a community help the brand generate positive word of mouth and attract more customers through referrals.?Paying attention to customer interactions in the community provides a brand with first-hand feedback on the changing needs and goals of their customers.
Ultimately, brand communities help build brand image and credibility, while providing a virtual pocket of trust and loyalty for the consumers to settle into.
How does a community help your business?
1. Increase Customer Lifetime Value
Community members are a part of a group on the platform. They would despise having to leave the ‘brand family’, thus presenting a great opportunity to contribute lifetime value to the organization. This is most effective for brands with subscription models and multiple products.
For example, if a user faces difficulties using software like Adobe Photoshop, they seek help from Adobe’s community. Finding solutions and additional knowledge resources for their needs encourage them to be long-time users. This benefits Adobe as the user will be making transactions for a longer period of time. On the other hand, the community is also the perfect avenue for Adobe to elaborate on how users can work with more of their software like Lightroom for better graphics. This encourages users to try out and subscribe to more products by Adobe.
2. Increase in Sales
Community members tend to make larger and more frequent purchases than non-community members. This is due to the sense of familiarity they have with the brand and product.
Adidas came up with its “Creator Club”, a membership program that rewards brand loyalty. On purchasing from the brand, customers are rewarded with points that they can use to get access to exclusive discounts, surprise sales, and limited-edition footwear. Paired with the Adidas Runners program that rewards them with points on running too, the brand has created a tight-knit community that purchases regularly from them.
3. Reduce Customer Support Costs
A large part of a brand’s support costs goes into answering easy and repeated queries. On the other hand, community members interact on a regular basis. If they have any doubts or queries about a brand's products or services, they can ask it on the community forum. Fellow members help and answer these queries, reducing the load on a brand’s customer support desk. Also, a brand can go through these Q&A threads to identify the questions most commonly asked, giving the ideal information needed to create a useful FAQs section for the brand.
Let’s take Xbox as an example. They provide veteran and invested players perks and free games as incentives for being active ambassadors of their community. When a regular user has any queries or doubts regarding Xbox’s services or product, these ambassadors make sure to solve them immediately. This greatly reduces the time and costs Xbox needs to invest in customer support.
4. Product Development & Adoption
Community members are attached to the brand. They prefer your product, new or old, over alternatives due to this sense of belonging. If a brand adds a new feature into their software, they will inform the community first. This gives the members early access to your products while also providing early feedback to the brand. This is only possible because community members are excited to try out the latest updates. Paying careful attention to their needs is the ideal way to develop your product.
The biggest reason companies think of starting a forum is to connect with their most loyal customers directly. For example, if a brand like Tencent (famous for PUBG) launches a new game for beta testing, most if not all of the beta testers will be a part of Tencent or the game’s community. This entices members as they are receiving access to early releases while simultaneously giving the company initial feedback that is critical to improvements and innovation. Other users are shown teasers about the game, creating further excitement and boosting product adoption rates consequently.
5. Network Effects
A successful online community platform draws like-minded people like moths to a flame. This works due to an urge to find people with similar values as well as a fear of missing out on the action. This offers a strong network of valuable connections to a user and further expands the consumer base of a brand.
Take for example LinkedIn’s community. If an individual’s co-workers are members of LinkedIn, there is an extremely high chance that they would be inclined to join as well. This enables them to make valuable connections that they can use as they move ahead in their careers. Similarly, many gamers join the Discord community to socialize and learn from other players. The more users you have, the more knowledge resources are available. Knowing that there are people out there on a platform who can help you out and give you a sense of belonging is all the incentive that a user needs.
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?Just as Lego proved, a community has the potential to make or break a brand. A company can tap into this through a solid strategy to support and engage its users. If you set up your community right, the benefits are inevitable. In the end, a brand can squeeze out the most from their customers only by satisfying all of their needs and leaving them wanting more.
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