Why Is Building An Online Community So Important?
It struck me that for the past few years on this blog we have been writing about all of the new and creative ways businesses can use technology to build an online community, but what we haven’t written much about is WHY building an online community is so important for companies.
Ever since social media blew up for business use, forward-thinking organizations began to see a new way to build and grow a community filled with both customers and prospective customers. From the beginning of commerce, businesses have built communities of people who bought their products and services. That said, those communities were entirely made up of real world consumers. The only way to communicate with those communities was to see them in your store and strike up a conversation.
With the creation of social media, companies are beginning to create “digital” communities whereby they can get their marketing message to their community much faster and easier through the use of digital technologies. The value that has created for companies is extraordinary.
The Value of My Company’s Online Community
The old business adage of “it’s less expensive to upsell existing customers than it is to sell to new customers” is something that I think is relevant to this topic. Think about it for a second, if you run a company and you have no online community to market to, you’re basically operating at risk. You’re depending on expensive advertising to lure new customers to your store, and also hoping that existing customers come back, without any really good strategies for enticing them to do so. That said, if you’re a company who has invested in building an online community you now have a pool of high quality leads that you can market to cheaply (online marketing is much less expensive than traditional marketing) in order to entice those consumers to stop by your business and purchase goods and/or services.
Without that cheap and efficient way to build a community and then market to that community, you are truly operating your business at risk. Having a high quality online community removes a lot of that risk as you know that you can go to them with a new marketing campaign and entice at least a percentage of them to take you up on your offer.
The value that provides to a business is incredible. We’ll get into the actual ROI of your online community a little later in this article. For now, hopefully you are starting to see why it makes sense to create an online community for your business.
5 Tools For Creating An Online Community For Your Business
Now that we all have an understanding of the value created for businesses who build an online community, let’s review a few of the social media sites businesses can use to build their online community. The biggest piece of advice I can provide to those businesses who are just starting to build their online community is to take a long look at your target audience and then determine what social media site(s) the majority of your target audience spends most of their time. For instance, are you targeting tweens for your business? If so, tools like Instagram, Twitter, & Facebook make the most sense. If you’re targeting professionals, then a site like LinkedIn makes the most sense for you to build an online community. Here are the top 5 social media sites for building an online community:
- Tumblr/Wordpress (your blog)
ROI For My Company’s Online Community
Some of you might be saying, “ok, this makes sense, but what is my ROI going to be for building an online community?” That’s a legitimate question and one that will be different for every business. There are also a lot of caveats, such as, how much time & creative energy are you spending engaging your online community? Do you include a call-to-action in your marketing messages that you present to your community? There are a lot of things that go into generating return-on-investment numbers for a company, but I will keep this high level and then you can decide how much further you want to delve when you run the numbers for your business.
Basically, to calculate ROI for your online community, you can simply take your total expenses (in terms of your digital marketing budget for the year), as well as, total sales generated through online initiatives. In order to calculate total sales you have to make sure you track all of your online marketing tactics. For example, if you run a sale and tweet that sale information to your Twitter community, be sure to give them some sort of promo code to input when making their purchase, so that later on you can track those sales to that marketing tactic. If you are asking your online community to come into your store, you can still do the same thing, simply by giving them a code and telling them to tell the person at checkout the code, which should give them a discount, as well as, provide you with the means to track the sale. Win-win!
By understanding how much you’re spending on your online marketing, as well as, your sales coming in from those online marketing initiatives, you will be able to track ROI. Now, I know there are a lot of other things we should consider and that you might need to account for when running the numbers, but as mentioned above, this post would go on forever if we accounted for everything. So take this high level strategy and apply it to your business, add in anything you think makes sense, and then run the numbers. Those companies who are being creative in how they engage their online community, the sales they run, and who are properly tracking everything are going to love the ROI that they are seeing from their online community, and THAT IS WHY HAVING AN ONLINE COMMUNITY FOR YOUR BUSINESS IS SO IMPORTANT! 🙂