ARTICLE

Key strategies and insights for drafting a business case

Online Community-Part 2

Key strategies and insights for drafting a business case

Online Community-Part 2

Explore various community types, build a robust business case, and seamlessly integrate them into your brand strategy and business model. From boosting website traffic to nurturing brand loyalty, discover the benefits these communities can offer. Whether you’re aiming to drive sales or gather insights, leverage the diverse revenue streams they provide to achieve your business goals. Connect with your audience, enhance engagement, and propel your brand forward.

ARTICLE

Key strategies and insights for drafting a business case

Online Community-Part 2

Explore various community types, build a robust business case, and seamlessly integrate them into your brand strategy and business model. From boosting website traffic to nurturing brand loyalty, discover the benefits these communities can offer. Whether you’re aiming to drive sales or gather insights, leverage the diverse revenue streams they provide to achieve your business goals. Connect with your audience, enhance engagement, and propel your brand forward.

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Challenges of Crafting an Online Community

Creating a successful online community that suits your business involves choosing the right type, aligning it with your brand, and establishing a strong business case. This article explores various community types, the importance of integration, and revenue generation. It addresses the challenge of connecting the community to your company, emphasizing brand loyalty, website traffic, and data collection.

Background

As businesses continue to navigate the digital landscape, the concept of online communities has gained immense importance. But how do you choose the right type of online community that complements your business model, aligns with your brand, and ultimately fosters a strong business case? This article delves into this critical topic, shedding light on various community types and the art of calculating compelling business cases for them.
Different types of communities

There are different types of communities with different purposes for the members. In our series of this articles we focus on the so called brand communities.

Communities are all around us, and most of us are part of and involved with one or more communities in some way, such as through shared interests, association life or via education. Online communities are built on similar foundations, which are applied in the digital environment.

There are many different types of online communities, and it is likely that you are also part of one, even though you might not be aware of it. For example, a Facebook group where you in one way or another share and discuss interests and topics with other members. Online communities are often centred around a clear purpose, topic, or interest.  Some of the most common types of online communities are:

  • Brand communities – a community where people with a common interest in a product or service meet like-minded people to interact around, an often, specific brand. Many times, linked to the brand’s website.
  • Social communities – a community where people with a common interest or purpose can meet. A social community can often take place on platforms such as Facebook, Twitter, or Slack.
  • Insight communities – a community where insights are obtained and shared from a group of people, with the aim of developing, for example, a product or service.
  • Support communities – a community where members provide other members with help and support of various kinds, for example linked to a product or service. Usually, by non-professional individuals, who nevertheless are well-accustomed and avid users, or consumers of a certain product or service.

The power of Online Communities

The income derived from a business case is based on the business values you want to create and achieve with a community. A community can contribute to your business differently, depending on which business benefits and values you would like to focus on. We have identified seven main revenue drivers for a community.
Drive traffic to your own site

Communities enables that traffic is linked to the own site, either for more product information, or via a buy button. Linking to different types of content on the own site can also be an option. The business case builds partly on the idea of having community derived traffic converting on your own site. If your community is located on the same site as your own, the content that the members create will aid to drive traffic directly to the site through better ratings via Google and other search engines.

Increased conversion own site

If the community generates ratings and reviews, it can be expected that it will increase conversion on the own site by presenting these in connection with the products. This will generate social proofing, which is a vital constituent of the customer journey.

Purchase loyalty

If there is a connection between the community and the own brand, we know that this will increase purchase loyalty. You can expect that active and engaged members on the forum will make a few extra purchases from you instead of the competitors.

Brand loyalty

The connection between the community and the own brand will also increase the emotional connection and loyalty to the brand. This typically generates an effect on all interactions with customers, such as e.g., increased effect of campaigns, better reach, enhanced word of mouth, etc.

User-generated-content

Producing content is costly in many regards. Meanwhile, user-generated content is used more and more both to reduce costs, but also because it is perceived as more authentic. From a business case point of view, user-generated content can both reduce costs for content and/or improve the effect of communication. Just keep in mind that duplicating the same content on two different sites impairs the SEO effect, and risks reducing search traffic to both the community and your own site.

First party data

For many companies, the access to more and richer customer data is perhaps the most attractive benefit of a community. Members and visitors leave behind a rich and nuanced data flow that can be used for profiling e.g., product and service preferences and to identify buying signals. To retrieve the best possible data, a common identifier is needed between the community members and your customers, e.g., a common login for them.

Insights for development

Conducting customer surveys on an ongoing basis can often be costly for companies. Instead, using your community to obtain insights through polls or surveys, for example, may be worth more as members are dedicated brand ambassadors, and are happy to share to contribute to product or service development.

Channel for marketing

Forums can also be used as a channel for marketing your own business. This is particularly attractive for product suppliers who lack a direct relationship with customers, i.e., sales take place via intermediaries.

Which revenue drivers are essential to prioritize for your company depends on what conditions exist and what business challenges need to be solved. In general, the greatest potential in the long term, is likely to focus on driving traffic and collect data for personalization initiatives.

 

Aligning Your Community with Your Brand and Business model

Depending on which business benefits you want to pursue, there are a few different choices and decisions to undertake, regarding how you want to connect the community to your brand and your business platform.At Remotion, we’ve formulated a community business and platform model, revealing diverse approaches adopted by various businesses in shaping their online brand community strategy. (Figure 1)​ We’ve also recognized various degrees of connection between a brand community and the business as following:

Separate brand with no connection to the companies

A community can live its own life with its own domain and brand. An example of this is boktipset.se, which is run by Adlibris. The main benefits will then be to get product reviews and user-generated content as reviews.

Own brand with a connection to your brand

A common way to create and facilitate a connection between the brands, is to use “powered by” or “part of”. Nordnet has e.g., used this solution for their forum Shareville. In this solution, it becomes more natural to link traffic between the sites and drive loyalty and strengthen the brand.

Common branding and an integrated part of your site

An alternative is to directly add a community to an existing site. An example of this variation is Beauty insider, which is an integrated part of Sephora’s site. The advantages are that the traffic from organic search comes directly to your own site, and that the conditions for data collection are better. However, the risk is that the forum does not appear as independent and genuine, which can make it difficult to recruit new members.

An integrated part of the business model

A community can also be an integral part of the business model. Vivino is a community and a shopping platform in one. The one cannot be separated from the other. For Lululemon, the community is their main marketing channel and for Revulution race, the community is an integrated part of product development. The growth for the companies that have this business model has in a number of cases been very significant and rapid.

Add social services to your site or app

There is also a light model where you add slightly simpler social services and functionalities to your site or app. It can e.g., be about rating and reviewing or following other users. Asics’s running app Runkeeper is an example of this.

Conclusion

In summary, it’s valuable to define your starting model and plan for future changes. Gradually merging a separate brand with your own is feasible. If your company is considering an online community, understanding your potential members is crucial before deciding on a platform, name, and brand for a successful launch. Here is our recommended steps:

  • Create an understanding of what purpose and business model your community has and what business goals it should serve the company
  • Define the values and functionalities ​​​​that the community should create for the customer
  • Establish a strategy for recruiting members along the way
  • Identify the needs for technical platforms

We at Remotion can help you carry out a pre-study and business case for your business and assist you finding out more about online communities. This is our second article in the series regarding online communities. You can find the first article here. In the next article, we will cover the following area:

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