How Community Creates Business Value
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Having worked with established brands and startups, CEOs and other senior leaders often approach me with questions about the value that community brings to the business. As leaders, they tend to focus on revenue goals and the business’s bottom line, and sometimes struggle to understand the value of customer engagement as they decide where to invest money and how to create the most impact for every dollar.
While there is not a single, recognizable value on the balance sheet linked to community, that does not mean that successful communities do not have business value. My answer to these CEOs is that’ strong communities enhance the value of the brand which in turn drive sales/revenues. They also provide valuable insight into new market opportunities and feedback on products and initiatives that help to optimize investment decisions.
As the line between digital and traditional dissolves, our understanding of how community creates business value is clearer than ever. And, it all starts by understanding the significance of getting to know your customers.
Your Brand what your Customers determine it to be
Customers are at the center of any business; without them, the business cannot survive. Many companies pay lip service to the idea of putting the customer or client at the center of the business, but it’s rarer that companies seem to be able to embody a truly customer centric organization. In order to succeed, businesses must invest in their customers by understanding them, listening to their concerns and adapting business practices to deliver the things they want and need (and that means current and perceived future).
At its core, community management is about building meaningful relationships with your customers, and through good management your business has the ability to deliver a meaningful and relevant customer experience. Strong communities can amplify the value of your brand, they can provide valuable insight to product development, marketing and company culture. By putting customers at the center of your business, community engagement becomes a vital step in multilayered process that helps businesses achieve successful growth.
Think like a Brand. Act like a Startup.™
We are living in a digital era. The rapid pace of change requires new way of thinking and acting to successfully grow your business. At Perks we believe that future success depends on a company’s ability to balance brand stability with the agility of a startup to focus on the things that have the most impact. We believe that the companies that “Think like a Brand. Act like a Startup.™” will be the ones that are most successful.
At Perks Consulting, we’ve found that balance between stability and agility is imperative to success. That’s why we’ve taken our philosophy and incorporated into a framework that helps drive a deeper understanding of how the agile approaches and methodologies leveraged by startups can drive solid business value through community. The graphic below can help you visualize how relationships between the customer, the brand and the community can help support the entire organization.
Your brand is, in the simplest terms, an outgrowth and representation of customer desires. By engaging with your customers through effective community management, community managers create relationships with customers that build advocacy, trust, and loyalty—and that in turn enhance the value of the brand.
By putting the customer in the center, the business can then build the brand as an outgrowth, and can engage the community as customers become interested in – and remain interested in – the brand. Then, as part of that community strategy, businesses are able to gain valuable insights about which products and services to invest in, marketing and communications strategies, align business culture with the brand, attract talent, and capture insights to support strategy and operations (i.e., how the business will succeed). Through agile execution and go-to-market cycles, we can begin to understand the influence of the inner circles on how businesses choose to invest time and resources. I talk about this entire process in much more detail in Chapter 4 of my book The Community Manager’s Playbook.
While the value of community is defined different than, say, a revenue goal, it is important to understand that brand and community are two primary drivers of those revenue goals. Without them, people would remain unaware of your business and would instead defer to competitors, which they may have already grown to trust. Once you understand the massive impact a solid community strategy can have not only on your bottom line, but one your success as a business, only then can you begin to learn how to optimize the experience for your customers, therefore resulting in even greater returns.
Your community is a vital source of information about the health of your business. In addition to acting as ambassadors for your product or service, your community also gives you valuable market research insights, information for product development, and can even help your business recruit top talent.
Through our communities, we can discover new things about customer needs, and can also validate concepts and approaches to give them what they want. Whereas once this process took hundreds of thousands of dollars in stiff market research settings, thanks to social media today you have several tools at your fingertips to get real time feedback on products and messaging from your customers, including Twitter, Facebook, Pinterest. This feedback loop proves to be invaluable in shaping the direction of a company and ensuring that investments are focused on the things that matter the most.
Once these CEOs and leaders understand the value that community brings to the entire organization, and how they can put it to work, they are supportive of investing in building their communities to create a powerful brand relationship with their customers that drives long term success for the company.
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