Communities Can Becomes Your Competitive Advantage

There has been been a steep decline in active participation in civic organizations like community groups, labour organisations and non-profits. This may seem due to becoming more digitally engaged and spending an extraordinary amount of time in front of our screens.

On the other hand, what we find is that the online communities are booming and they look different than what we are used to in the last century. These communities are based around brands and businesses and provide huge opportunities for the companies. Some examples listed below

• Salesforce has created a community of 2 million members who support each other, organize events, produce content and are a critical part of the operations
• Harley Davidson has created more than 1400 chapters around the world for enthusiasts to get together and discuss bikes.
• Fitbit has a community of 25 million members who share and refine their exercise routines. 
• HitRecord has brought together more than 750000 artists, writers and filmmakers to collaborate on productions.

These communities generate tangible value for businesses such as content, events, marketing, support and education. However, it is the intangible value that members derive from participation that makes it sticky. 

All of us are social animals. We crave for a sense of being connected, belonging, and meaning especially in work. making progress in a shared mission is the most motivating force a professional can feel. Communities deliver these benefits, creating a sense of shared accountability and values while preserving individual autonomy.

A superior business model:

if a company can move from simply delivering a product to building a community, it can deliver extraordinary competitive advantages and create a superior business model.

• You can acquire new members leading to lower acquisition costs
• members do not want to leave the community resulting in increased retention and hence lifetime value.
• Members support each other, resulting in lower support costs.

As the engagement grows, the community gets smarter, faster to respond, and generates more value.

A sea change is happening:

One of the key reasons this is happening now is that technology platforms have become commoditized and easily accessible than ever before, building a rapidly growing connected audience. We now have multiple generations of people who are comfortable using technology. 

Many cheap scalable tools, for building communities have been developed digitally. 

Customers today expect a different relationship. They just don't want customer support but expect a deeper relationship with customers and fellow buyers of product or service. many companies are investing significantly in digital and in-person community engagement across product portfolios.

Success patterns in community building: 

It is not enough to set up a platform. You need to create an environment that incentivizes the behavior you would like to see and highlights and rewards participation. The key elements necessary are

• A shared purpose and values - answer the question why are we coming together?
• Simple, easily accessible value consumption - members should easily be able to see what they are getting - support, events, downloads, documents.
• Simple and easily navigable value creation - members should e able to easily create new value for others to use.
• Clearly defined awards and rewards - Quality content, support and mentoring, leadership initiatives are acknowledged and recognized.
• Carefully crafted accountability - Clearly defined objective peer review and workflow. This produces better results encouraging collaboration and development
• Healthy participation driven by good leadership - Have leaders who embody diversity and good conduct and empower them to increase value.
• Open, objective governance - Community members can play an active role in reshaping the structure and operational dynamics together and a sense of ownership and responsibility.

Measuring success: 

have a set of crisp focussed set of metrics and evaluate regularly and make adjustments as required. This is an ongoing process, where the crossfunctional team should ask questions about the observed results to drive improvements. The areas to track could be

• Community consumption and creation:  Track active participation and value that members create and consume. 
• Delivery and execution:  How well the company is building a community strategy and executing effectively.
• Organizational experience: This involves reading and acting on data, mentoring, moderating, and conflict resolution. Ensure that the company has what it needs to foster and grow the community.

Done well, communities can offer a sustainable competitive advantage and drive brand awareness, value production. The future of business is more open, connected and communities are going to change the nature of how we interact with brands, products, and other people.

When Community Becomes Your Competitive Advantage

by Jeffrey Bussgang and Jono Bacon HBR January 21, 2020