3 Reasons why brand-owned communities are a necessity

It can be hard to tell when standing amidst it, but the landscape of brand-consumer interaction has undergone a significant transformation.

Gone are the days when brand success relied almost exclusively on one-way communication from brand to consumer. It used to be as simple as running an ad in a newspaper or sending out a yearly catalog to keep your customers returning. Fast forward to today, where online spaces at the macro level are evolving into bustling hubs of brand communication, often with consumers leading the conversation.

This is causing consumers to grow increasingly empowered at the micro level, seeking out (and rewarding) genuine interactions and brand support instead of more traditional forms of customer service.

Here, where the macro and micro converge, many brands realize that the communities they foster and support without the help of third-party platforms need to take center stage. And the reasons for this shift are becoming steadily clear, if not pressing:

Their increasingly digitally savvy customers are building communities, with or without them. At the same time, their employees are also forging their own communities. And, more than ever, modern customers want to take care of their own issues on their own terms.

You can see why online communities will soon be essential to a brand’s strategy when you add all this up.

To understand why, let's break down the particulars of each:

It may be a harsh reality, but your customers will build the communities they need, with or without you, especially online.

Indeed, a study by GlobalWebIndex found that 53% of social media users worldwide use social media platforms to connect with like-minded individuals. For example, over 10 million Facebook groups exist, with 1.8 billion people using them monthly.

Like dandelions in a freshly mowed lawn, communities are popping up everywhere. And when customers can't easily find the brand support they need online, they're inclined to band together and create a source of it themselves.

But with customer-run communities come significant risks that customers often need to be aware of. For instance, according to research, unregulated online communities put their users at risk of data privacy issues such as hacking, impersonation, and more. Moreover, if data privacy becomes an issue with a brand-associated community, that brand's reputation is at risk, regardless of who created and governs that community.

Fortunately, organizations overwhelmingly enjoy the resources needed to manage and mitigate these risks inherent to online brand communities, presenting an opportunity for brands up to the task of forming partnerships with experienced community platform providers. Ownable online platforms, like Khoros, offer brands the best of both worlds–a trusted place for your customers to connect with their like-minded peers online with safety, privacy, and regulatory concerns accounted for.

Surprising to some, modern customers are not the only ones building connections through brand-related communities online. Chances are high that your employees also spend significant time and energy managing different forms of online communities. Examples include events, newsletters, forums, organic social media channels, the metaverse, and web3.

On its own, there's nothing wrong with this passion for cultivating connections online. Unfortunately, when siloed, these initiatives often end up disconnected, unmanaged, or abandoned.

Brands have a significant opportunity to channel these disparate internal initiatives into a single, unified community, which could reduce operating costs, increase CLV (customer lifetime value), and drive revenue growth. Data from our recent whitepaper, The executive’s

business case for a brand-owned community, showed 587% ROI in just three years after implementing Khoros Brand Communities.

How exactly does this work, though?

One example involves our customer, Dataiku. Before partnering with Khoros, Dataiku lacked a formal online community, though they did host a Q&A platform for customers. However, the platform had no strategic plan and limited features. Dataiku wanted to connect more meaningfully with its user base and improve the customer experience, so it chose Khoros Communities as its partner. To ensure the success of their community, Dataiku launched in multiple phases, beginning with internal power users and super users. They gathered feedback and made crucial adjustments before the wider public launch.

This strategic strategy made Dataiku’s public community launch a success. In the first year, they logged 240k community visits (up 480% from when they hosted a Q&A platform), user-generated solutions-to-product questions had an accepted solution rate of 82%, and they achieved more than $1 million in cost deflection savings.

Dataiku's journey was incredibly ambitious because they weren’t just launching a community; they also launched a customer success ecosystem to help with user advocacy and onboarding.

Considering that Dataiku’s product evolves quickly, their community helps them ensure customers are utilizing their newest technology and setting them up for success in terms of adoption and ease of use.

This illustrative example also demonstrates that community members adopt their products faster, onboard faster, and are more likely to renew than other customers. It also shows, quite practically, why brands should take the lead, harnessing the passions and expertise of their employers to form the engine of a high-performing online community.

The rise of digital technology and the internet has primarily driven the shift in customer behavior regarding enabled self-service, while COVID-19 accelerated it.

Modern customers have access to an abundance of information compared to their forebears, and they're using this access to become more informed and independent in their lives overall.

They're no longer passive recipients of products and services: modern customers are active participants, and active participation requires engagement with brands that goes much deeper than surface-level, transactional interactions.

Consumers cultivated by the demands of our increasingly digital lives also share a desire for immediacy and convenience. We expect quick and easy access to information and solutions in our digital age. The customer is rarely satisfied sitting on hold for a customer service representative while sifting through the pages of a product manual. No, your customers want to solve their issues on their terms, at their pace.

As part of the realities of living in our digital world, we must face the fact that traditional customer service models, typically relying on one-way communication from brands to their customers, must evolve with our preferences and needs. These methods could be more convenient for customers and the agents working hard to help them.

As a result, they need to provide the autonomy, engagement, and immediacy that modern customers expect. Designers of older models treated customers as problems to be solved rather than as individuals with unique perspectives, experiences, and needs. For the customer service traditionalist, fostering a sense of community and belonging on behalf of a brand isn't even on the radar. This is yet another area where brand-owned communities excel by their very nature.

The platform that brand communities provide enables customers to connect with the brand and each other in engaging and meaningful ways. Customers interacting on brand platforms enjoy a space to share their unique experiences, ask questions, and find solutions–all while contributing to a shared sense of autonomy and empowerment.

These benefits within brand communities are available to customers 24 hours a day, seven days a week, 365 days a year. They also provide access to a wealth of user-generated content to self-serve. No more waiting on hold. No more squinting to make out the dense and technical text familiar to the average product manual. Moreover, brand-owned communities offer degrees of authenticity and transparency that traditional customer service simply cannot provide.

Brand communities can serve as a natural complement to meet (and continue to meet) customers' evolving needs in the digital age.

While it's clear that brand communities are becoming necessary, it’s important to note that brands arguably have the most to gain from them.

They help your customers foster human connections, accelerate their access to answers, and build trust between consumers and the products they love, leading to loyal advocates who can play valuable roles within these communities.

As customers engage with each other, they use natural, highly relatable language that can be valuable to marketing efforts and brand SEO. These interactions –between consumers and between consumers and brands– can become a source of innovation that brands can leverage in increasingly competitive markets. The best part is that it builds upon a simple truth – our innate human desire to help one another.

Now, as much as this all makes perfect sense, the particulars of implementing a brand community can be anything but. Partnering with the right experts makes all the difference.

Khoros offers the next generation of community software designed to meet the challenges faced by community managers while providing enhanced insights, flexibility, and engagement features. Start your community journey today and join the ranks of successful brands transforming customer experiences through online communities.