Establishing the Business Value of Online Communities

Community Strategy // Communities possess a complex influence on a company’s overall success. Learn how to establish the business value of online communities.

Lauren Perkins
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We can all agree that every organization’s CEO and leadership team is accountable for determining what adds value to the business. The very best ones are focused on creating and delivering value for all stakeholders inside and outside of the organization. It is natural that the first question they ask when we talk about community is: Can community affect the bottom line? And if so, how?

Delivering a top notch product or service is important, but what ensures relevance for customers in today’s market is to ensure you know what they need and care about. Even more crucial, these insights must be applied to your product or service. Sounds easy in theory, but challenging to execute. This is where you can find the disconnection in many businesses.

Business leaders want customer engagement, and in a world of choice they really want loyalty, but don’t understand that it takes time and energy to achieve.

I’ve been a community builder for over a decade, and I’ve seen first hand how essential it is for community managers to speak the business language and translate their activities into tangible benefits.

Communities have a complex influence on the company’s overall success. Ultimately, the financial results that the company should be seeking are either increased revenue or reduced costs, or fulfilling the mission if we’re talking about non-profit organizations. Strong communities help achieve these goals in three major ways:

1. Enhancing the value of the brand, which then drives sales;

2. Providing valuable insights for new products and market opportunities, helping to optimize investment decisions;

3. Garnering feedback on products and use cases, which are not only valuable for the management, but also help educate other customers without incurring the additional resource cost.

These three components apply to both businesses catering to other businesses (B2Bs), as well as organizations marketing directly to end customers. With broader reach of social networks and online communication tools, the line between digital and traditional dissolves. Community building in this environment creates greater business value, starting with the importance of getting to know your customers.

1. A brand is customers’ perception of it

In the simplest terms, a brand represents the customer’s desires and grows through their preference. Effective community managers engage with customers and build relationships that can lead to trust, loyalty, word of mouth, and advocacy. That in turn enhances the value of the brand to customers and the market.

Community management helps build meaningful relationships with customers at the present moment and build a foundation for those relationships to last into the future. Besides delivering the product or service the customers are excited about, a good community facilitates a meaningful and relevant customer experience that proves the brand message. Brands with strong internal and external communities amplify their value, including insights for product development, marketing, and what fosters a healthy company culture.

By putting customers at the center of the business successfully, community building becomes a vital step in a multilayered process that helps organizations grow through engagement.

2. The seeds of innovation are in your community insights

Through a community strategy, businesses are able to gain valuable insights on product and service investments as well as marketing and communications initiatives. A business with a community cognizant approach to its customer and employee base derives more value from business culture and brand alignment, attracting talent, and capturing insights to support its strategy and operations.

Through these communities, we can discover new things about customer needs, and validate concepts and approaches that help us give them what they want. In the past, this process took hundreds of thousands of dollars of market research and had a considerable time lag. Today, affordable social media tools give real-time feedback directly from customers on products and messaging.

For example, we can use Twitter to reach out to people with service issues, or start discussion threads on Facebook, or identify preferences on Pinterest through visuals. The ability to receive feedback so quickly proves to be invaluable in shaping the company’s direction and ensuring that investments are focused on the things that matter the most to customers and its bottom line.

3. Collective knowledge and shared identity are baked into communities

Based on the nature of communities, their formation is catalyzed by sharing common interests, lifestyles, and attachment to a product or brand. More often than not, community members interact with each other and not with the brand directly. They share product experience, use cases, ask for help, and share the solutions for certain issues. An active community can eventually become an efficient addition for the corporate customer support system.

By crowdsourcing experience within a bounded, vetted community, organizations can:

  • More effectively support customers through peer sharing — people tend to trust like-minded individuals
  • Quickly onboard new employees by giving them access to the team’s expertise
  • Get feedback and opinions on the product’s features, issues and improvement requests
  • Develop a product use cases database by encouraging users to share their stories

CEOs and senior leaders who understand the value of community building to the organization as a whole, are eager to put it to work and support the investment by setting clear goals and hiring skilled community managers. Community building creates a powerful brand relationship between a business and its customers, a key component in driving long term success for the company.

About Lauren Perkins

Lauren Perkins the Founder & CEO of Perks Consulting, a marketing advisement firm that helps brands and high growth companies achieve higher levels of performance. She is the driving force behind the firm’s approach: “Think like a Brand. Act like a Startup.™”

A founding instructor at General Assembly teaching digital insights, brand strategy, community management and agile marketing, she now helps founding teams as Entrepreneur in Residence at the Columbia School of Business.

Lauren is the author of “The Community Manager’s Playbook: How to Build Brand Awareness and Customer Engagement” (Apress, 2015). She speaks at conferences such as CMX, CES, SXSW, Social Media Week, Internet Week, Catalyst Week and Entrepreneur Week.


Lauren Perkins

Founder and Contract CMO, Perks Consulting

Lauren is the Founder and Contract CMO at Perks Consulting. She’s a serial entrepreneur, full-stack CMO, and speaker known for creating high-performing teams and helping companies achieve aggressive growth goals. She is an expert at scaling marketing, data & insights, building communities, and creating brands that drive demand.

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