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Every business wants growth, from increased customers and subscribers to higher revenue. However, there’s no one-size-fits-all strategy to facilitate growth for every brand. In the past, companies focused heavily on increasing their outreach efforts and marketing strategies to increase sales.
However, in recent years, the focus of successful brands has begun to shift, with a greater focus on putting the customer first. As consumer buying behaviours change in the face of a complex economy and increasing competition, putting the needs of your buyers ahead of anything else is now crucial.
As a result, companies are exploring new growth methods, that leverage the power of their communities to reduce acquisition costs, increase retention, and drive loyalty.
Here’s why community-led growth could be the key to success in 2024.
Community-led growth is a model that puts your community at the heart of your strategy for growth. It relies on the impact, influence, and input of a strong and supportive group of brand advocates, evangelists, and promoters. In today’s world, virtually every business has a “community”.
Whether you only have 10 loyal customers, or 10 million, there are likely to be people out there who are passionate about your products and services. Community-led growth focuses on activating the connection power of these people, to help drive excitement from new consumers.
The beauty of community-led growth is that it’s a customer-centric strategy, beneficial to both your brand and your consumers. For a business, the strategy creates and supports a network of enthusiastic customers that influence others to make purchasing decisions.
For customers, being a member of a community increases the value of the product or service you offer. Your community strategies can include access to educational and exclusive content, enhanced onboarding methods, and more, to extend customer lifetime value and annual recurring revenue.
Early adopters of the community-led growth strategy have already begun to recognise its benefits. Some studies show that building and activating an online community increases your engagement levels by 21%. Additionally, 66% of customers say communities have made an impact on their levels of brand loyalty, and 68% of companies say communities help them find new leads.
In the past, however, many companies have approached “community building” as an afterthought. Now, in 2024, community-led growth is beginning to take centre stage for a few reasons:
The popularity of community-led growth in 2024 stems partially from the changes to the “customer journey” that have taken place in recent years. In the past, companies focused heavily on guiding consumers through a “sales funnel”. They pushed consumers through stages from awareness, to discovery, conversion, and loyalty.
However, the “funnel” strategy identifies a specific beginning and end of a relationship with a consumer. In today’s world, that definitive “endpoint” for a relationship isn’t as clear, particularly for certain brands, such as those in the SaaS and technology landscape.
This has prompted a shift to the “sales flywheel” strategy, which involves delivering an excellent experience through every stage of a customer journey, from acquisition to adoption, to retention, so you can create advocates that help to promote your products and services.
The community-led growth approach supports this strategy because it doesn’t push people towards a binary endpoint in their journey. Instead, it creates an environment that naturally retains customers, and activates them into valuable assets for growth.
In 2024, buyer behaviours are changing, and customer acquisition costs are rising. Engagement on paid marketing platforms is trending downwards, and the buyer journey has morphed into a cross-platform, complex experience. There are also more advertisers than ever before, fighting for a finite amount of consumer attention.
Today’s companies can’t rely exclusively on ads to drive sales. They need a better approach to maintaining the engagement of their target audience and strengthening relationships. Community-led growth satisfies that demand by fostering deeper connections between users and brands that aren’t entirely transactional.
The strategy puts consumers at the centre of the brand’s journey, bringing them along for the growth experience. It focuses on helping consumers recognise and connect with companies based on shared values. That’s vital at a time when 82% of shoppers are choosing brands specifically because they have similar values.
Building communities centred around content and value helps businesses form the relationships they need with consumers that reduce acquisition costs. Plus, when your customers act as advocates for your brand, they do a significant amount of your marketing for you, driving customers to your company through recommendations, so you can spend less on ads.
Another major reason community-led growth will be essential in 2024, is that companies now need new ways to capture insights and information about their target audience. Google is gradually phasing out third-party cookies in 2024. This means companies can’t track customer journeys, or create personalised ad experiences the way they used to.
This will influence how companies approach their marketing mix and growth strategy. Businesses will need to collect more first-party data and insights from their target audience. They’ll be reliant on direct feedback to find out what their customers need, the challenges they face, and where they should be spending their marketing dollars.
Community-led growth addresses this issue by providing access to a constant supply of consumers who can share insights with your business leaders. They can constantly provide feedback to shape your marketing strategies and even your product development efforts.
Finally, perhaps the biggest reason community-led growth will be essential in 2024, is that companies will be more reliant than ever on customer retention. A problematic economy is causing consumers and business buyers alone to cut their budgets for all kinds of products.
As customer acquisition costs continue to rise, the most effective way to preserve a healthy cash flow, will be to maintain the relationships you have with existing buyers. This is particularly true in certain industries, like SaaS, where companies rely on buyers to renew their subscriptions and access upsell offers, for higher annual profits.
Community-based growth strategies help to facilitate retention in various ways. First, they help with strengthening the trust consumers have in your solutions. When you share useful content with customers, demonstrate a commitment to customer service, and position yourself as a thought leader, consumers are more likely to trust you over competing brands.
Communities also give your customers a way to access additional value after they make a purchase. You can provide videos and webinars to your communities, give them onboarding support, and connect them with peers who can help them troubleshoot problems.
Ultimately, the power of the “community” in business growth is nothing new, but it’s something companies should definitely be paying more attention to this year. Community-led growth strategies can help enhance your relationships with consumers, and transform them into advocates for your brand, reducing customer acquisition costs and marketing spend.
Community-led growth can also give you a crucial edge over the competition, by giving you access to more of the data you need to make growth decisions. The feedback you get from your community can lead to better customer service strategies, improved product development, and even a greater return on investment from your marketing budget.
If you’re not investing in community-led growth yet, 2024 could be the perfect year to discover just how powerful your existing community can be.
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