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Leafs Nation at Game 7 against the Ottawa Senators at the Air Canada Centre, April 20, 2004. (Louie Palu/The Globe and Mail)
Leafs Nation at Game 7 against the Ottawa Senators at the Air Canada Centre, April 20, 2004. (Louie Palu/The Globe and Mail)

Grow: Mark Healy

Customer community pumps up bottom line Add to ...

The topic of community came up with a client recently. Not community in the sense of place, but rather the idea of a group of like-minded people. Specifically customers.

And the question centred on whether clients can create both a sense of community and an actual customer community with existing customers in order to drive more business.

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My client – in the technology/consumer goods space – is not likely to jump head first into community building right now. It is merely something under consideration. But I have worked with other clients heavily assessing or implementing community as a means of differentiating their offering and strengthening ties with their customers. My business has learned a lot about the concept of community and its application in business. Community can be a novel way of looking at growth strategy.

In conducting our research – a mix of secondary sources and interviews with academics and thought leaders on community building – we have identified some strong themes and commonalities with all communities. By categorizing and understanding all the fundamental elements of community, those elements can be recreated in the context of a business and its customers, with a goal of improving the revenue position. For example, an organized program can be built to aggregate customers into a company sponsored community, complete with membership numbers and information, and membership benefits.

The practical upshot of community creation for businesses is three-fold:

• Opportunities for positive word of mouth and brand ambassadorship by customers. Happy customers tend to spread the word.

• Improved customer dialogue leading to continuous product/service/experience improvement. It is easier to focus on the right improvements by keeping communication open with customers.

• Stickiness resulting in customer loyalty, and in turn retention and increased lifetime value of the customer. Customers who feel a sense of belonging will stick around and spend more in the long run.

In other words, acquire, maximize value, and retain. Isn't that the dream scenario for all businesses? So the question is not whether community building around customers is valuable, it is how to address the opportunity. It stars with understanding the many facets of community, and how to leverage each of them.

At the most fundamental level, we found four dimensions to the concept of community: membership, influence, integration and shared connection. Each can contribute to the design of a customer community.

Membership

The idea here is that a community is special and identifiable only if there are thresholds for membership. In a physical community, a member has to live within the geographic boundaries accepted by the group to qualify. In Leafs Nation, a strong community, a member has to openly declare devotion to Toronto's storied hockey team.

Membership determines who is part of the group and who is not. It defines boundaries, provides emotional safety, encourages personal investment and provides a sense of belonging. If we think about a typical business, the implication of membership could be that not all customers would automatically qualify to “become a member” of the company's community. The rewards of community membership could be reserved for customers meeting a certain purchase or behavioural threshold.

Influence

Influence is a two-way street in communities, where a member's sway over the community and the community's influence over a member take place simultaneously. Members are attracted to communities where they have some level of power, and at the same time communities push for members to conform. Without this balance, communities disintegrate or blow up.

In the case of Lululemon, its customers form a strong community, where members encourage one another to bring forward ideas and help shape a particular store's culture – but the community also demands that members conform in the manner in which they dress, and in how “far out” an idea can be. The self-regulation enables the company to stay out of the “you can” and “you can't” game for the most part.

For a business considering the establishment of customer community, sorting out ahead of time how much influence members will have over culture and norms is an important consideration.

Integration

Individuals in a close community have similar needs, so they are able to work together to meet their own needs while meeting the needs of one another. This requires a strong person-environment fit. The extent to which individuals' values are shared with other members of the community will dictate the extent to which a community will organize its needs and set priorities together.

Lobby groups often form inside communities because of shared needs and priority setting. If we think about farmers, we normally see a unified front and a consistent message because of the shared needs and values in that community.

When applying this aspect of community to a business that is thinking about formalizing a customer community, there will be benefit to encouraging consistency in membership (shared needs and values) because one voice to listen and react to is far easier than hundreds or thousands of disparate views on, say, how to improve the product or how to change the retail experience.

Shared connections

Shared emotional connections are the backbone of community stickiness. The connections develop because communities offer their members positive ways to interact, events, a means to resolve common problems, opportunities to honour members, and opportunities for personal investment in the community.

Facebook is a good example of a community, or a series of communities, where shared emotional connections are at the core of the experience. Most Facebook members join specifically because of shared connections with others they know.

For a business forming a customer community, this may be the most crucial piece of the puzzle. Kraft has a tremendous customer community with scale and strong membership. A big reason for the success is Kraft's recognition that it is a shared love of cooking, and not recipe sharing, that ties its members together – and it plays to the love of cooking in the messaging.

Mark Healy, P.Eng, MBA, founder of Torque Customer Strategy, is now a partner at Satov Consultants – a management consultancy with practice areas in corporate strategy, customer strategy and operations strategy. Mark's focus areas inside the Customer Strategy practice include consumer insights, customer experience, innovation and go-to-market strategy. He is a regular speaker and media contributor on topics ranging from marketing to strategy, in telecom, retail and other sectors. Mark is known as much for his penchant for loud socks and a healthy NFL football obsession as he is for his commitment to Ivey and recent Ivey grads. He currently serves as chair of the Ivey Alumni Association board of directors. Mark lives with his wife Charlotte and their bulldog McDuff in Toronto.

Follow on Twitter: @healymark

 

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