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How executives can trim operating costs by cultivating brand-owned communities

by Khoros Staff | Jul 18, 2023

Executive leadership roles within enterprise-scale companies have always been challenging. But arguably, the demands on these roles have also never been greater.

Due to current global economic uncertainty, executives are under more pressure than ever to find ways to streamline operations, optimize resource allocation, and eliminate unnecessary expenses to remain cost-effective and improve the company’s financial performance while also generating new revenue streams.

Enter the rise of the brand-owned community. Investment in a brand-owned community can help business leaders improve operational efficiencies within contact centers and, when managed correctly, they can even grow to become their own cost-saver and revenue source. This tends to happen in one of three ways:

  • Call deflection,

  • Boosting organic traffic,

  • Become a wellspring of first-party data.

We will dive more into each of these in the sections below:

Deflecting support calls: How communities can help

To start, we face a blunt business fact: servicing phone calls with human agents is expensive.

In fact, a single conversation between one customer and a live customer support agent can cost $6-$12 USD. That's potentially $12 a brand could be saving for each customer interaction. The irony is, the average customer would rather you not spend this in the first place.

Customers increasingly crave self-service, with 67% preferring to help themselves instead of speaking with a company representative. 40% of customers who do contact a call center have already attempted to resolve their issue independently. What's more, Hubspot found that customers forced to pick up the phone after failing to answer their own questions are 10% more likely to be disloyal. Alternatively, assuming a knowledge base was available online and tailored to their needs, 91% of customers surveyed reported they'd use it.

It's no accident that customers have grown to love self-service through brand-owned communities. Members of online communities help one another by posting answers to questions they've had, and do their best to answer new questions as they arise.

The benefits here are clear: brands, on average, achieve a resounding 10% reduction in overall call volume after launching a Khoros brand community. Hewlett Packard found that by using brand community-generated solutions, its annual call deflection savings amounted to $16.9 million dollars.

Even better? Brand-owned communities benefit more than just active members. As communities grow, they begin attracting new members through the power of increased organic traffic.

Attracting organic traffic: Harnessing the power of community

Another blunt fact in business is that acquiring new customers continues to grow more complex and expensive compared to customer retention initiatives.

Compounding these expenses are social media platforms — a once a cheap and reliable source of organic engagement for brands — which now increasingly operate on a pay-to-engage model. This has inspired a lot of CMOs to search for supplemental sources of organic growth.

Sans social platforms, Google is the best place for customers to find new brands, as 89% of consumers turn to Google, Bing, or another search engine to find information on products, services, and businesses prior to purchase.

For this reason, the higher your brand ranks in search results organically, the more likely potential customers are to find you.

Another way that online communities can benefit brands is by way of user-generated content (UGC). Exactly as it sounds, UGC is content created by community members that, on average, serves four distinct advantages compared to premiere-branded content:

1. Relatable language

Members of an online community naturally use more relatable human language than marketers, copywriters, and brand managers who, understandably, must contend with brand guidelines and SEO best practices.

2. Increased volume

The underpinnings of highly engaged community members often involve personal interests and topics that users are passionate about. As a result, community members tend to create more content more consistently than a typical marketing team is capable of. In fact, the average Khoros-powered community gets 70% of its traffic from organic search alone.

3. Natural syndication

UGC from online communities is easier to syndicate than traditional branded content. Because of this, UGC can drive traffic in other brand-owned channels while boosting traffic within the community itself.

4. Trustworthiness

One result of our increasingly digital lives is that authenticity increasingly cuts through the endless messages, images, and mediums vying for our attention. UGC encapsulates the identity, values, and purpose of those who create it — fostering an inherent sense of trust from fellow community members. This explains why 88% of consumers trust online reviews written by "peers" as much as they trust suggestions from personal networks.

These advantages significantly reduce the overall cost of acquiring and keeping customers, translating into definitive, bottom-line results.

As an example of these benefits in action, MYOB experienced 20,000 unique visitors per week through its community-generated content. Another involves CISCO receiving over 1 million community views per year to its UGC after deploying a Khoros Community.

But UGC isn’t the only valuable resource that well-managed online communities generate. As participation within the community itself increases in volume, it provides ample highly valuable first-party data for brands to analyze — circumventing increasingly “pay-to-play” models with social media platforms.

Generating first-party data: Unveiling insights and enhancing decision-making

As concerns and regulations regarding data privacy continue to grow, brands that diversify their methods of building first-party data are setting themselves up for a sustainable, successful future that’s less dependent on expensive ad campaigns to drive customer acquisition.

Brand-owned communities help businesses create valuable first-party data that can be used to better understand customers preferences, behaviors, and need. This knowledge is crucial for making data-driven decisions that can lead to cost reductions, revenue growth, and stronger customer relationships.

With a comprehensive understanding of their customer's preferences, brands can tailor their products, services, and messaging to meet specific needs. This personalized approach to marketing and sales strategies increases customer satisfaction and loyalty, leading to repeat business, higher customer lifetime value, and ultimately, revenue growth.

Moreover, executives can leverage community insights to develop targeted marketing campaigns, offer personalized recommendations, and create relevant product bundles or upgrades. By effectively leveraging first-party data, executives can identify upsell or cross-sell opportunities to enhance their revenue generation strategies and maximize the value they deliver to their customers.

In one inspiring Khoros community example, Spotify discovered that a simple community idea board could be transformed into a robust source of media stories and product enhancements.

Total cost of ownership: Parting thoughts when choosing a community vendor

The budgetary challenges facing executives don’t look like they’re going anywhere in the near future. But not all community solutions are created equal. With so much potential in brand-owned communities, the choice of which community solution provider you ultimately choose is paramount.

The right solution should reduce the total cost of ownership — impacting how much brands can save by introducing a community. It bears noting that these cost-savings can be negated if a given solution requires months to deploy or if the solution's implementation hinges on a high degree of customization (e.g., hard coding and maintenance).

For many of the executive leaders we've partnered with, these particular challenges are why the availability of an out-of-the-box solution requiring less onboarding time and increased time-to-value was key in choosing Khoros Communities. They needed to ensure they were investing in a platform that could meet brand needs as the communities began to thrive.

That said, even with the basics of how to build an online community laid out, it can take a lot of work to know how to start. We get it, because we've helped thousands of professionals just like you get started (and succeed).

As a leader in community management that more than 2,000 brands trust, we pride ourselves on our customers' success. We have over 15 years of experience and more resources than any other vendor to help you create a thriving online community and take advantage of the business benefits they communities create.

Request a demo today and learn how we help the world's biggest brands build high-performing communities to boost customer success and organic growth.


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