There’s a common misconception among go-to-market (GTM) leaders that community is a slow-growth strategy because they think a community takes too long to establish and nurture before seeing results. As such, they believe they’re better served by prioritizing other marketing initiatives such as ABM and paid social in order to reach their business goals.
This misperception about community keeps organizations from achieving their true growth potential. Community-led growth actually amplifies the impact of other GTM initiatives, leading to immediate benefits as well as long-term, efficient, and sustainable growth.
This post will explain why the view of community-led growth held by some leaders is misguided, and share how in the current market environment—where profitability and efficiency are paramount—companies that make community a top priority are able to achieve the growth they (and their shareholders) desire.
The public and VC market has been unkind to former hyper-growth unicorn darlings such as WeWork, Bird, and Klarna—all of which have seen their lofty valuations coming crashing down. The luster has worn off of these brands which prized growth and market share over actually making money. Investors and stakeholders no longer tolerate spending colossal amounts of money just to acquire customers. They want to see a realistic path to profitability.
In today’s market environment, efficiency is everything. Companies that can’t prove their efficiency will find themselves locked out of access to additional capital. Leaders must invest in initiatives that support long-term business growth and work alongside other initiatives to amplify their impact. Here is where community can play a major role.
GTM leaders often overlook the value of community, seeing it as a “nice to have” rather than an essential part of their operations. As such, they make investments in other marketing initiatives and leave community as an afterthought.
For example, they may rely on paid marketing where costs are already elevated due to demand outstripping supply. Plus, these kinds of ads have become commonplace, making them easy to skip or ignore and ultimately less effective. Because of these trends, the return on paid marketing can be low.
Your community, on the other hand, is one of a kind. It gives members specific resources and support aligned to a product or practice they’ve self-selected into, so there’s not the same tactic fatigue found in paid marketing. Further, a self-sustaining community can help nurture your paid leads by addressing their key conversion questions without your direct intervention, moving your leads forward while saving you time and resources that can be redeployed elsewhere. In this way, your community provides an avenue to a higher yield on the lower volumes of leads acquired via paid marketing.
That’s just one example. Investing in community enhances the value across your GTM initiatives, making it one of the most efficient strategies for growth. Here’s how.
Your community represents a set of highly-engaged users and fans. By knowing who these members are, you can better understand your product’s individual users and gain valuable knowledge about them as well as their company, colleagues, and network. Even more importantly, you can see the sentiment of how they talk about your company, solutions, or even a particular product launch.
Understanding if members are satisfied with your solutions or not and what specific conversations they’re engaging in around your product can add a new dimension to your lead/prospect scoring efforts and inform the priorities of your sales team.
By looking at your community as a potential prospect pool, you can discover net-new leads that are more likely to convert into sales opportunities. Community engagement around a particular topic by a member or organization can be a signal that the lead is ready for a sales conversation or ready to upgrade.
This is especially true in open source communities where the company has a free offering with minimal telemetry. When you observe a surge of new members and chatter from a single organization, this presents a strong signal that they may be ready for a hosted or more feature-rich solution. The sales team can then immediately reach out to the right members to initiate a conversation about the additional value that can be delivered by your company’s offering.
A similar approach can be applied to expand existing customer usage either through upsell or cross-sell efforts. Listening to your community provides an avenue to discover these expansion opportunities, enabling demand gen and growth marketers to do more with the existing customer pool. Companies can achieve faster growth when existing customers add fuel to the fire.
By fostering a community, you’re able to gather information on what your members really care about. Giving the sales team access to these insights enables them to reach out at the right time and with the appropriate context.
Having this valuable information in hand supports a faster sales cycle as sales reps already know the customer's pain points and the offerings that would most appeal to them.
The biggest killer of "fast growth" is churn of both free users and paid customers. Churn has a larger negative impact than low acquisition because the resources invested in acquiring customers is lost.
In the case of free user churn, you're missing out on revenue from potential upgrades, possible network effects, and positive word of mouth. And with paid customer churn, you're missing out on revenue from upgrades as well as the loss of potential cross-sell into new parts of the organization. So companies, especially product-led growth companies, look for early signals on whether a user or account might churn.
Community is an ideal place to look for these signals given the insights it provides into user sentiment and engagement. By observing the tone of forum comments, tweets, or other messages, teams can watch for dips in satisfaction. This allows companies to better calibrate churn predictions and intervene to resolve any issues and restore customer trust. With the right tool, your team can even be proactively alerted to changes in sentiment or other notable happenings, so you can take immediate action. Getting ahead of churn allows teams to improve retention rates and even make up for subpar acquisition.
Not only is community insight a useful churn predictor, strong communities increase the perceived switching cost. Leaving a service not only means removing the software, it also means losing access, in some cases, to your supportive community members. That shift in the “leave/stay” equation can have a massive positive impact on churn numbers.
Member-to-member communication is a primary feature of a strong community. Through community, GTM leaders can leverage the voice of brand champions to facilitate or accelerate additional sales. This peer validation is invaluable in building confidence that a solution will result in the promised value.
Strong champions and community members are also much likelier to identify new use cases within an existing team and/or connect your team or solution with new projects, both of which drive expansion.
Investing in community can create a butterfly effect with benefits that ripple throughout an entire organization—not just for GTM leaders—enhancing the work of product development teams, support teams, and more.
In a sales-led world with high customer acquisition cost, high lifetime value, and slow sales cycles, the sales team often serves as the primary go-to resource for customer insights from the product team. But sales is responsible for selling, not market research. So every time a product manager asks sales for a call or set of insights, this takes away from their primary responsibility of contributing to the business' revenue goals. Further, the feedback they collect is often not particularly fit for research purposes since they are operating from a sales perspective, and not through a product research lens.
By working directly with community members, product & engineering teams get the insights they need while reducing the time they're taking away from their sales counterparts' core focus. They can also leverage community for fast notifications of bugs or other product issues. Community members provide real-time QA on a product, and real user feedback can drive decisions about product development pipelines and investment initiatives.
Support teams can benefit from direct access to users and community forums which facilitate easier, faster, and cheaper methods of providing product support. Plus, peer-to-peer communication within a community can ease the burden on your support team as members answer each other's questions.
To take advantage of the full set of benefits a community can provide your GTM function and business as a whole, you’ll want to invest in an intelligent community growth platform like Common Room.
Common Room helps make your community a growth engine for your organization by unlocking insights to grow happier customers, optimize targeting and qualification, and drive business impact. It serves as a single source of information on your community members which can be used to source new leads, improve account-based marketing performance, and even measure community-attributed revenue.
Visit the Common Room blog to learn more about building a community-led growth strategy and putting together a CLG team. Ready to get started? Try Common Room for free today or request a demo.