Online Customer Communities Are The New Essential Mechanism For Driving Increased Sales & Increasing ROI
In our globalized world, businesses have the potential to access a much broader segment of the consumer population. Yet this means that consumers also have enhanced access to competing firms/brands and business offerings. As a result, customers are increasingly reactive to poor or poorly-customized customer service and also increasingly disloyal. Specifically:
- 95% of consumers say customer service is a crucial factor in their purchasing decisions and their feelings of satisfaction with a purchase.
- 90% of customers will not purchase from a brand/firm they have received poor quality customer service from.
- 50% of customers make additional purchases from a firm following good quality customer service experiences.
- 70% of customers who do go on to purchase from a competing brand/firm do so as a direct result of receiving poor quality customer service from their first-choice provider.
Creating and maintaining a high-quality online customer community is the best strategy to increase customer service experience satisfaction and, consequently, loyalty. Moreover, the best online customer communities do more than just increase the number and profitability of return sales. They increase customer engagement to generate social proof, boost SEO ranking, and reduce spending on ineffective/under-effective promotional activities. This is why online customer communities help firms improve the return on their marketing investment by as much as 33%.
What Is An Online Customer Community?
Online customer communities are web-based gathering/communication spaces. Here, customers access knowledge banks, practice self-service customer service, and engage with each other, experts, and brand partners. Forums are the typical presentation of an online customer community, with private and hybrid spaces (with some content available to non-members) gaining popularity in a variety of industries.
Online customer communities, no matter the industry or size, are different from public social networks. Notably, a company retains control of on-page PPC ad revenue, user data, and the SEO benefits of online customer community materials and discussion. What’s more, online customer communities demonstrate higher engagement rates than social media. Social media engagement is 0.05-5%, while nearly half of online community members engage with site content.
What Is Unique About Online Customer Communities Today?
Businesses created online customer communities more than fifteen years ago. They aimed to develop an ongoing private dialogue with customers to inform marketing decisions. Since then, online customer communities have become more scalable than primary customer engagement channels (like phone calls and real-time meetings). Consequently, online customer communities are now essential tools for much more than marketing; they are integral to providing high-quality customer service, building loyalty, and managing promotional and service costs.
Why Is Building An Online Customer Community Important?
Firms that prioritize customer service grow and increase revenues. This is because almost three-quarters of consumers make purchasing decisions based on customer service experience, while 85% will pay more for goods/services if the associated service experience is high-quality.
Customers’ satisfaction with the service experience depends on more than direct conversations with customer service representatives (CSAs). Their level of engagement with the brand at large, the presence of positive social proof, the accessibility of self-serve customer service, and the ability to give feedback and make suggestions about future products are all critical elements of customers’ overall feelings of satisfaction. Building an online customer community serves to improve each of these elements, and ultimately positions a firm to prioritize customer service experience.
Online Customer Communities Improve Direct Customer Service Satisfaction
Tolerance for customer service delays is steadily decreasing, with two-thirds of consumers expecting less than two minutes of wait time and one out of seven consumers expecting no wait whatsoever in satisfactory service. Online customer communities improve direct customer service via support ticket deflection, which reduces wait times.
Specifically, support ticket deflection reduces ticket volume (as consumers can find answers to their questions on their own before ever submitting a ticket. Moreover, almost three-quarters of CSAs at firms with high-functioning online customer communities find that pre-existing in-community materials can nearly immediately solve most support tickets with.
Well-Built Online Customer Communities Enhance Customer Engagement
Highly engaged consumers are likely to feel satisfied by a brand or product/service. Disengaged consumers, however, are likely to feel dissatisfied. Online customer communities are unique in their capacity to engage potential and existing customers; well-designed online customer communities include a vast array of opportunities and tools for connecting with customers.
This substantial increase in customer engagement has significant positive impacts on a firm’s profitability, revenue, and relationship progression (from one-time buyer to return customer). Specifically, highly engaged customers contribute almost one-quarter of a firm’s revenue. This is despite less than 30% of a brand’s customers becoming community members and more than half of community members remaining inactive (and unengaged).
An Online Customer Community Is A Centralized Location For Gathering & Displaying Social Proof
As a form of social proof, consumers trust authentic content (content not created by a brand on its own behalf) more than branded content and promotions. Increasing social proof through authentic content also enhances the “halo effect,” which causes consumers to carry their feelings of positivity about trustworthy content forward into feelings of positivity and trust in the service.
User-generated content, like online customer communities’ member-submitted materials, has the demonstrated ability to increase conversion better than almost any other form of social proof. As a result, online customer communities tend to lower customer acquisition costs by as much as 50% while causing four times higher click-through rates to product/services pages.
Self-Serve Customer Service Is Streamlined & Easily Accessible In A Well-Moderated Online Customer Community
Consumers want personalized, self-serve sales funnels. 80% of B2C buyers only shop where they have access to a customized content portal, while 44% of B2B purchasers demand the same. What’s more, 90% of all consumers expect a self-service portal, with one in three customers saying they would rather clean a toilet than have to speak with a CSA.
In an online customer community, customers have 24/7 direct access to answers to frequent questions, continuing product education, and updates about upcoming product and service improvements and releases. This empowers customers to self-serve (as they want to), which reduces annual customer service costs as much as 25% and increases customer satisfaction.
Online Customer Communities Strengthen Customers’ Connection To & Personal Involvement With The Brand And Its Products
Positioning brand advocates as the human element that consumers can connect with (as opposed to CSAs) dramatically changes how consumers connect and communicate with the brand. Specifically, as many as 85% of brand advocates say they have received questions that buyers would not file support inquiries over.
This is also why two-thirds of companies use their communities to generate ideas about new products or service features. Bringing people together and empowering them to discuss their uses of and experiences with the firm’s catalog of products and services yields otherwise inaccessible insights. Consequently, innovation (along with increased customer conversion and retention) is one of the key takeaways from building an online customer community.
Best Practices For Building The Best Online Customer Community
- When you’re just getting started: Acquire members via tightly controlled channels like local meetups, blogging, and co-marketing with industry thought-leaders. Building authenticity and trust among members often requires severely limiting public access to the community until it is well-established.
- Always include an “escape hatch”: This involves making direct customer service channels easily accessible from all pages of the community (for example, placing customer service contact information in a persistent page footer).
- Prioritize rapid expansion of self-service portals: These should include product and service information libraries, as well as troubleshooting guides and customer-generated tips and tricks from other customers or staff. Summarize, organize, and aggregate helpful information based on actual user preferences and behavior.
- Invest in intuitive, reliable search functionality: Customers cannot benefit from information they cannot easily find. Make sure community content is relevant and findable (optimize names and titles, do not put up paywalls).
- Grow through participation: Convert industry experts and initial members into brand advocates to increase later members’ satisfaction. Notably, community satisfaction scores (which contribute to the halo effect) are highest when expert moderators are available to answer questions, give advice, and guide discussion.
- Protect the integrity of brand advocacy: Avoid awarding superficial badges, titles, or verifications for participation that does not advance the core goals of the community.
- Protect community-building from over-moderation: Allow community members to engage in casual conversations, as human connection to the space will increase stickiness. Just be sure to organize content so that users’ informal interactions do not clutter up informational spaces.
- Moderate and curate community content: This includes archiving irrelevant/redundant materials, as well as turning down or taking down content pitches from community members that do not meet pre-established standards for quality, uniqueness, or authenticity.
- Leverage email automation in routine communications with members: This will reduce staffing needs and responsibilities while increasing connection and engagement with community members. For example, sending a “We Miss You” email after 90 days of member inactivity has a 26 percent conversion rate for re-engaging members.
- When the community is established enough to allow some public access: Place exclusive customer-oriented content behind a login and create a distinct public section of the community where prospective customers can contact customer advocates and access standard pre-purchasing information.
Best Worldwide Online Customer Communities
Firms hoping to build high-quality online customer communities can look to industry leaders for proven practices and proof of concept. Leading online customer communities include:
1. Sales Hacker
An advanced and very well-established global online customer community, Sales Hacker is renowned for its rapid growth from a private, 4-5-member space to a 60,000+ member community. Sales Hacker pioneered many of the tips listed in this article, as it is a clear first-mover among customer communities.
The Xbox Ambassadors program, together with the official Xbox forums, create a moderately-advanced level online customer community. Xbox is a prime example of how to incentivize high-quality contributions to and participation in the community, as brand ambassadors earn rewards for quality contributions with high-value games, merchandise, and industry-specific perks.
Sephora’s “Beauty Talk” and “Beauty Board” forum spaces are not exceptionally advanced in their structure or hierarchy. Yet they employ boundary-pushing technology to organize content so that the entire community is distinctly conversion-focused. This sets Sephora apart from other community builders, as it balances its relationship-building and sales spaces.