01.08.2015

Today it’s hard to think of a company that isn’t focusing on community in some way.

Some have user groups or forums. Some host events. Some businesses are communities, as they’ve built a platform for people to interact in some way (marketplaces, social networks, crowdsourcing, etc).

With the success of many companies in developing community platforms, more and more companies are investing in developing their own community strategy.

Some of them are succeeding at building healthy communities and companies. Some are failing.

After advising, studying and working with hundreds of companies and their community strategies throughout my career, I’ve noticed one huge commonality in why many of them fail.

Companies fail at community when they look at it as a tactic instead of making it a core part of their business philosophy.

These companies aren’t sure how to prove the ROI of community so they go in hesitantly. They look at community as a means to an end. If we invest X in community, how much will we get back?

I get it. As a founder, I understand the pressure to seek direct returns in each of your investments.

But as a result, you end up building community for the wrong reasons. Your motivation is all wrong and you’ll fail to see the long term value that community can bring.

The reality is that community, 99.9% of the time, will not get you an immediate financial return on your investment. It’s not an efficient short-term strategy. And even if it gets you some quick returns in 3-6 months, it will be a very small representation of the full potential value.

Because when community is a core part of your business philosophy, it can do so much more than give you short-term returns.

It can completely set your business apart from every other company in the field. It can redefine markets. It can inspire millions of people, give them a sense of belonging and make them feel an incredible bond with your company.

And it can make you a whole lot of money.

So community has to start as a fundamental business philosophy, not a tactic.

It’s a bold claim, I know. It comes with some big implications. If community is a philosophy rather than a tactic it means:

  • It’s different from marketing, sales, business development and any other tactic driven field
  • You don’t always need to track its ROI the same way you would for those fields
  • Every single employee in your company will be involved in community, not just a community team
  • You never have to ask if community is valuable, it’s assumed

To better display this concept of a business philosophy, a good comparison is how Apple thinks about design.

Apple doesn’t track the ROI of their design and aesthetics. It’s a core part of their philosophy for how products should look and feel. It’s a differentiating factor for their business.

There are many companies who have community at their core. Twitter, 7 Cups of Tea, Waze, Ebay, Facebook, Duolingo, Mozilla, Meetup, Lyft, Airbnb are just a few great examples of companies who looked at community as a core philosophy of developing their business and as a result have enjoyed massive rewards.

Companies who succeed at making community a core part of their culture see rewards like:

  • Increased loyalty when your members feel like they’re a part of a movement instead of just a customer (Harley Davidson)
  • Opportunity to scale products and marketplaces exponentially when the community is creating and contributing the value (Duolingo or Airbnb)
  • Increased odds of finding and maintaining product-market fit as you’re constantly learning from your community members and can adapt your product direction with their changing needs (Pinterest)
  • Free marketing from the evangelists in your community who tell their friends (Yelp)
  • Improved team alignment as the community team isn’t constantly trying to justify their existence, it’s just understood across the board (Moz)
  • Differentiation as a competitor can copy your product but they can never copy your community (lyft)

These are all things that you may not be able to measure the same way you would with marketing or sales tactics but that doesn’t mean they’re not valuable.

You can’t just decide to make community part of your business philosophy over night. You can test an advertisement on Google in one day, you can’t test a community like that.

When community is a philosophy, you can’t look at it as a simple means to drive revenue. It WILL drive revenue, but in ways you may not expect and probably can’t track for a good long while. And it will bring you value in so many other ways

Looking for immediate ROI only makes sense if you’re looking at community as a tactic. And community is not an effective tactic.

When you do community right, it’s not an add-on to your business, it IS your business.

It has to be something you believe in through-and-through or it won’t work.

Now I want to clarify that while you shouldn’t look at community as a tactic, there are tactics you can use and track to improve your community.

Implementing community tactics and measuring their success

Instead of focusing on metrics to figure out whether or not you should be investing in community at all you should focus on the metrics that will tell you how healthy your community is and how to improve it.

If you’re still asking whether or not community is worthwhile, you’re probably already screwed.

If community is a core philosophy within your business, there are some great, proven tactics you can use to improve and track your community strategy.

In order to track how well your community is doing, look at metrics like:

  • levels of user-to-user engagement
  • amount of customer feedback coming in
  • amount of time spent on the community platform
  • % reduction in customer service inquiries
  • return customers
  • attendance rates at your events
  • amount of community members talking about you online
  • customer happiness

These are all great metrics to track to see how well your community strategy is performing. But it’s all for naught if you’re using these metrics to prove or disprove that community is important to your company. These metrics can’t do that.

If you’re building a community-centric business, you don’t have a choice…

If your product is a community, then it HAS to be a core philosophy of your entire business.

Community-centric businesses include: social networks (Twitter, Facebook, Instagram), marketplaces (Airbnb, Lyft, Ebay), crowd-sourcing and -funding companies (Betabrand, Kickstarter, Quirky), interest-based discovery platforms (Reddit, Product Hunt).

For companies like these, community-based tactics aren’t things you choose to do once in a while. They’re at the core of everything you do.

Take Product Hunt for example, a recent, wildly successful community platform.

Product Hunt doesn’t use community as a tactic. Product Hunt was a community before Product Hunt even existed because its founder Ryan Hoover started building a network of people who love talking about products, then built a product to serve that community.

If they sacrificed community, they’d sacrifice their entire business.

The happy hours, brunches and events they host aren’t hosted because there’s a good ROI. They host them because it’s a core part of how they believe a company should be built. Without the community, the company wouldn’t exist.

Do they track attendance at their events and try to improve them? Sure, but only so they can make sure they’re doing a good job of developing their community in the right way.

Community to Product Hunt is the design to Apple. It can be the same for you. It’s something that can define your company and determine the decisions you make down the line. It’s something that can be engrained into everything you do in your company.

My belief is we’re at the beginning of a movement where we’re going to see more and more companies built with community as a core part of their culture and business philosophy.

With that, we’re also going to see a lot of companies faking it, focusing on community tactics without really believing in the value of community as a core business philosophy.

The good news is whether you’re starting a new company or your company has been around for a long time, you can still build community into your core business philosophy. Salesforce did it.

It just has to be genuine.

Ask yourself and ask your team….are you looking at community as a tactic or are as a core business philosophy?

Photo credit: G.W Photography

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David Spinks

David Spinks | @DavidSpinks

David is the Founder and CEO of CMX. He's been building digital communities since he was 13, and has trained a number of the world's leading businesses in community strategy. He created CMX to unite the community industry, and bring community professionals the resources, network and training they need to thrive.