Online Communities: The Tribalization of Business PART TWO

Summary

This transcript explores the crucial role of communities in business, focusing on the importance of aligning community efforts with company goals. It highlights how companies often fail to scale their community programs effectively, due to a mismatch between expectations and resources. Examples like Fiskars show that community-driven success can happen on a small budget, yielding impressive results in sales and engagement. The discussion also stresses the need for proper funding, measurement, and a shift towards customer-driven processes for long-term business success. Ultimately, companies should treat community-building as a core marketing strategy for lasting impact.

Takeaways

• 😀 Community engagement is driven by delivering value to the user, which encourages participation and strengthens community growth.
• 😀 Companies need to align their metrics with community goals, not just traditional business metrics, to truly measure community success.
• 😀 A key challenge in large companies (e.g., Bank of America, Walmart) is the scalability of their community programs, which often lack the necessary reach to significantly impact their business.
• 😀 The evolution of community programs can take two forms: starting as grassroots initiatives and eventually becoming marketing-driven, or starting as corporate-led efforts from the beginning.
• 😀 Many CMOs fail to understand the potential of community programs, either using them as another marketing channel to spam customers or underfunding them, leading to poor results.
• 😀 Allocating proper budget to community programs is essential; companies should view these programs as equivalent to traditional marketing efforts and not underfund them.
• 😀 Large companies like Bank of America spend millions on TV advertising but invest relatively little in community-building, despite the high potential ROI from communities.
• 😀 Community-based marketing initiatives, like partnerships with small business associations, can significantly increase brand presence and customer engagement when properly funded.
• 😀 Some companies have achieved success with minimal investment in communities. For instance, Fiskars grew its community organically, using passionate users and gaining substantial sales growth.
• 😀 Building exclusive, community-driven programs, such as ambassador or influencer programs, can lead to rapid growth and significantly exceed initial goals.
• 😀 Investing in community programs can lead to long-term cost savings in customer support and innovation, while also fostering customer loyalty and engagement.

Q & A

Why is it important for companies to focus on creating value for users in community programs?

Focusing on creating value for users is crucial because it drives participation, which in turn fuels the growth and sustainability of a community. This creates an engaged user base that can contribute to the community's success.

What is the mismatch often observed between metrics and goals in community programs?

The mismatch occurs when companies use traditional marketing metrics, which may not align with the unique goals of a community program. This leads to confusion and an inability to measure the true success of community efforts.

What challenges do large companies face when trying to scale their community programs?

Large companies struggle with scalability because they require large communities to make a significant impact, but they often fail to build those communities effectively. This can result in smaller, less engaged communities that don’t move the needle on company objectives.

Can you provide an example of a company with a successful community program that operated on a low budget?

Yes, Fiskars is a great example. They created a community of passionate scrapbookers, starting with just three members. The community grew quickly and led to a 300% increase in sales, demonstrating that communities can succeed without large budgets.

What is the typical lifecycle of a company’s community initiative?

There are two main types of community evolution: one that starts as a small, grassroots initiative and eventually becomes part of the marketing strategy, and another that begins as a formal corporate initiative from the outset.

What is the role of marketing in community programs, and why is it important?

Marketing plays a critical role in community programs by ensuring the community is aligned with company goals and by providing the resources needed for success. Proper funding and support are essential for a community to thrive, much like any other marketing program.

How should companies allocate their budgets for community programs?

Companies should treat community programs as they would any other marketing initiative. This includes allocating sufficient financial resources to support community growth and measuring success accordingly.

How does the Bank of America example illustrate the gap in scalability for large companies?

Bank of America’s small business community, despite having 20,000 members, was not large enough to significantly impact their overall business. This shows that even with a large customer base, scaling a community program to make a meaningful difference can be a challenge.

What key lesson can companies learn from Fiskars’ community-building approach?

Fiskars’ success shows that a community can grow rapidly and produce significant business results with minimal investment. It highlights the power of exclusivity, passionate ambassadors, and organic growth in creating a thriving community.

What long-term benefits can companies expect from investing in community programs?

Over time, companies can expect reduced operational costs, improved customer support, and more effective product innovation. Additionally, fostering strong customer relationships can lead to more loyal and engaged customers, driving long-term business growth.