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Community-Led Growth: The Key to Acquisition and Retention?

Learn how you can leverage community-led growth as a powerful driver of customer acquisition, expansion, and retention.
Written by
Duncan Elder
Published on
May 18, 2021

Businesses have long benefited from communities of dedicated customers. But these communities and user groups haven’t always been central to growth. They’re often just a welcome side effect of a product-led strategy. That’s starting to change. Like-minded people have more options for connecting online than ever before. This lets businesses make communities central to development.

This article will take a closer look at community-led growth and teach all you need to know to implement this powerful strategy.

What is community-led growth?

Community-led growth is a go-to-market strategy in which companies build communities of enthusiastic customers. When done well, these communities add significant value to the product experience. This helps with customer acquisition, retention, and account expansion. It’s a powerful way to grow a business. But to be successful you must create a community that contributes to both your goals and those of your users. To do this, you need to understand why people join communities.

Typically this is either because the person supports the community’s cause or directly benefits from being a member. Below are some examples of community-led businesses that provide immense value to all.

How community-led companies provide value

  • Peloton: Makes working out at home social by letting people connect and compete.
  • Moz: Search Engine Optimization (SEO) tool Moz helps its users (and future users) learn SEO best practices from industry leaders.
  • SAP: The SAP community is a vast user-generated resource detailing everything about the software: from customer support queries to new ideas about the software.
  • ConvertKit: The ConvertKit community empowers creators to learn from each other while enabling the company to share best practices as well.
  • Mindvalley: Mindvalley’s community spaces add a social element to its personal development courses.
  • Airbnb: Airbnb is only possible thanks to its community of hosts. The company has an online community that provides them with all the help they need to be successful.
  • Lululemon: The athletic wear company’s ambassador program helps local exercise leaders create exercise communities.
  • YouTube: YouTube has become more community-focused recently thanks to features like comments and community posts.
  • Product Hunt’s software discovery platform provides huge value to both makers—who get their products in front of a large audience, and users—who get access to new apps.

Community-led isn’t the only growth strategy. It’s more of an evolution of those that came before.

Sales-led vs. product-led vs. community-led growth

For years, sales teams and marketing teams were the main drivers of growth for the biggest tech companies—think of industry giants like IBM, Microsoft, and Oracle. If you didn’t have money to invest in these areas, you were unlikely to find success—even if you had a better product.

Customer-led growth

From sales-led and product-led to community-led growth[/caption]But the last decade saw the explosion of product-led growth (PLG), driven by how easy it is for SaaS companies to distribute software online. Founders knew if they created products users preferred, they could compete with established brands at low cost. User-friendly UIs, free trials, helpful customer success, and support teams, and content marketing are key to this type of growth.

Calendly, Slack, and Dropbox are good examples of products that benefited from a product-led growth strategy.Community-led growth is the next step. It doesn’t replace product-led growth—an excellent customer experience is still key to gaining enthusiastic fans. Instead, it builds on top of product-led growth by harnessing the power of existing customers and the natural desire we all have for the community.

Figma, Coda, and Notion are good examples of products that are amplifying growth with a community-led strategy.

But how does a community help with growth?

Communities are a powerful driver of growth. That’s why almost 70% of companies with communities say they will be investing in them further this year.

Community investment
Community investment (source: CMX Hub)

Here are five ways that communities can help:

They are a powerful moat

Building community brings a significant competitive advantage. They act as a substantial barrier to churn, a sign-up incentive to new users, and they protect you from new competitors. Peloton is a great example of a company with a powerful moat built with the community. While it’s theoretically easy to create a similar product to Peloton, the company’s existing user base means competing would be tough.

They create a growth flywheel effect

An active community takes your existing momentum and propels you further forward. In a traditional sales funnel, momentum ends when a prospect passes through the bottom and becomes a customer. Communities flip this model on its head. When customers buy your product, it’s actually the start of a new journey. It’s a journey committed to helping them achieve their goals and becoming enthusiastic advocates of your business. You can use these advocates to boost all stages of the sales and post-sales process.

Recommendations build sales, feedback helps you build better products, and support queries onboard new users. You can read more about how the community flywheel works in our article on the topic here.

Community flywheel

They are a valuable source of customer insight

Communities are valuable sources of insight into the way your customers act and think. Discussions highlight what customers want from your product. This can influence future updates or features that need to be fixed.

WebinarNinja uses its community to find beta testers for new products and features. This benefits all involved: the customer gets early access to features, while product teams get feedback on what works and what doesn't.

They drive customer success

Customer communities add significant value to your product.

  • The Convert Kit community has built up a valuable resource of helpful answers new customers can use to find answers to their questions.
  • The Workato Connector community encourages users to build and share integrations and automation. Other customers can use these when official solutions don’t exist.
  • Public.com’s community of investors provides tips and advice to those new to investing.

They increase industry exposure and authority

Heading a community can build authority and leadership within your industry. Hubspot hosts an annual event called Inbound, as well as various partner events around the world. These events benefit the community by helping members access the latest inbound marketing strategies. While doing so, they also help Hubspot position itself as a thought leader.

Community-led growth best practices

Successfully implementing a community-led growth strategy takes careful planning. You can’t just create space and expect customers to join in. Instead, you need to think about how your community will benefit its stakeholders and optimize around these needs. Robust community-led growth strategies clearly answer the following five questions:

Why will people join your community?

Your community must have a clear purpose. It needs to be strong enough for users to decide to join and contribute. There are essentially two types of communities: product communities and industry communities. Product communities are those driven by your product. Users meet to help each other get the most from your solution. As a business, you can add value in several ways. For example:

  • Offering customer support and solving user questions.
  • Providing exclusive benefits. This could be beta access to new features, invites to events or seminars, or resources that help members learn and grow.
  • Generating community discussions and facilitating ways that increase the value of the community.
ConvertKit Community
ConvertKit Community

Community of Practice is built around a particular industry, profession, or niche problem. The idea is that by creating a community of people who are interested in the problem you solve, you will have more opportunities to build loyal fans.

Bettermode's customer, Klaus, a SaaS solution for customer support professionals is building a community for CX quality professionals. Learn more from this case study on how Klaus is building brand leadership and educating customers with the community.

Quality Tribe
Klaus Community - Quality Tribe

The Invision Design Leadership forum is yet another excellent example of Community of Practice. It’s a closed community of design leaders that meet at on and offline events to discuss industry practices.

Pro tip: Gain inspiration from existing communities. Established brands can look at how people are discussing their product online and use this as community inspiration. Start-ups can look at what people in the industry already gather online for.

Where will your community thrive?

Where you choose to grow your community is key to its success. You need to select the channel that is best suited to your community’s purpose. Many communities grow over multiple spaces. For example, people might:

  • Create and discuss tutorials and guides on YouTube.
  • Use LinkedIn or Twitter to share opinions.
  • Meet up with others at in-person events and conferences.
  • Learn the latest innovations in webinars and courses.
  • Collaborate and share work on GitHub.
  • Keep up to date with newsletters.

To ensure you have control over your community, you should host the social space on a platform you own. This provides benefits such as:

  • You own the data generated by the community.
  • Community pages can be indexed in search engines, potentially increasing traffic.
  • You can integrate community content and discussions into your website.
  • You have full control over moderation, and you create your terms and conditions.
  • You can integrate your community with the other tools you use.

Pro tip: Create with community platform. Use community platform software like Bettermode to create branded communities that you own. It’s far easier and more cost-effective than developing your own space from scratch.

Gain initial members

The hardest part of any community-building process is establishing momentum. When you don’t already have a thriving community, it’s difficult to encourage new people to contribute. The best thing you can do is have a clear plan that provides significant value to early members. Look at your existing customers or network to find people interested in joining. Once your community starts to grow, you can take a less active role.

Pro tip: Balance growth with value. It can be tempting to grow it at all costs in the early days of your community. But your main focus should be on providing immense value to those already involved—even If this means growing at a slower rate.

Encourage contribution

People only stay active in your community when they feel they have a reason to do so. As the brand at the center, it is your job to encourage contributions and moderate the community to ensure it stays valuable. Here are some ways you can do this:

  • Organize Q&As with industry leaders.
  • Create roundtable discussions on topics related to your industry.
  • Bring in experts to hold webinars on relevant topics.
  • Start discussion threads.
  • Incentivize participation through points (think upvotes on Reddit).
  • Create certification for top members.

Pro tip: Look to your community for inspiration Monitor your community (or similar ones) to see what people are discussing. Then create events and discussions based on what you know people find interesting.

Show that you value member input

Once your community is thriving, you need to show members that you value their contributions. Here are some ways to do this:

  • Reward top contributors with more powerful community roles.
  • Use community contributions in your content.
  • Bring guests on to share expertise through Q&As, webinars, podcasts, or events.
  • Let community members test early versions of product updates.
  • Highlight when a community discussion has led to changes at your company.

Pro tip: Using community contributions in your contentHighlighting community contributions in your content also helps promote your community to new users—thus building your community further.

Putting the focus on customers

Ultimately, community led-growth is about bringing your customers to the center of your product. When done well, it can have a powerful impact on the growth of your business.

Duncan Elder
Content writer

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