4 Ways Brands Drive ROI Through Online Communities

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Forrester Research predicted that 2015 will be the year that online brand communities make a comeback, and there are many reasons to celebrate the occasion.

Brands have increasingly found that investments in social media communities aren’t paying off. After spending significant time and resources building out Facebook pages, the platform has continually tweaked its Newsfeed algorithm to the detriment of brands, dropping the organic reach of their content to a mere two percent of their fans.

Rather than submit to these closed ecosystems, and the whims of ever-changing platform features, brands can regain control of their online communities by hosting them on-site. Below we’ve highlighted some of the ways these communities can drive real ROI for brands.

Help Consumers Find Answers

Brands can leverage their particular expertise to educate consumers and help them find relevant answers in a timely manner. These efforts provide real value for consumers, and can foster a powerful and genuine brand impression, leading to a significant boost in ROI.

Coinciding with the influx of urgent questions during tax season, H&R Block created a “Get Answers” portal to connect customers with their team of tax experts, answering  over one million questions and driving a 15 percent jump in business. Other micro-sites, such as “Block Talk” and “The Community,” keep customers engaged outside of tax season by providing content around “All Things Tax” and tangential subjects like financial and healthcare services.

Robust online communities can also help ease the strain on customer experience teams by letting people openly discuss and answer each other’s questions. Research from Gartner found that community-driven customer support can “realize cost savings up to 50 percent,” and such environments strengthen consumer trust with the brand.

Enhance the Online Shopping Experience

When searching to learn more about a product or service, customer engagement firm Incyte Group found that over 80 percent of consumers first visit a company website rather than a branded social media page. On-site communities cater to this consumer behavior, providing people with a more immersive brand experience at exactly the moment when they are seeking to learn more.

Because brands maintain full control over these communities (unlike branded Facebook pages), developer teams can build-in opportunities to help consumers more easily discover new products or services, and ultimately make a purchase. Sephora’s online TV portal showcases high-quality how-to videos that inspire fans to “turn beauty on,” and the brand’s “Beauty Talk” community invites consumers to join in-depth conversations around beauty products and tips through forums such as “Ask The Experts” and “Beauty Insider.”

These conversations are happening on-site, within Sephora’s e-commerce platform, and the company has found that community members spend twice as much money – and “superfan” members spend 10 times as much – as non-community members.

Reap Outsized Rewards From Increased Loyalty

Brands can build trust and foster loyalty among existing customers by building their online communities into a go-to source of information. Parenting website Bundoo created a comprehensive digital “hub” of expert-written articles and tips, and a community platform for parents to interact directly with pediatricians and relevant specialists. The online community has established Bundoo as the ultimate parenting resource on the web, helping people find reliable answers to their questions and driving new users to the site’s premium services.

Online communities can also empower consumers more broadly in their day-to-day lives. Bank of America created its “Better Money Habits” microsite, in partnership with Khan Academy, to help consumers take back control of their personal finances. The site serves as a valuable knowledge portal filled with interactive tools (e.g. “How much home can I afford calculator”), easily-digestible infographics (e.g. “What is a credit score?”), and videos that explain financial concepts (e.g. “The time value of money”).

Leveraging online communities to transform new users into loyal customers can have an outsized impact on business. Research from the White House Office of Consumer Affairs found that loyal customers are worth 10 times as much as their first purchase, and studies from Harvard Business School around “e-loyalty” show that a mere five percent bump in customer retention rates can increase profits by up to 95 percent over the long-term.

Foster a Brand Culture Around Discovery

Consumers are inundated on a daily basis with more information than they know what to do with. Brands of all backgrounds and product portfolios can encourage repeat visitors by creating online communities that foster a culture of discovery and exploration, helping people sift through the clutter to find relevant information, products or services that might interest them.

Online travel booking company Expedia hosts a blog called Viewfinder that lets expert and amateur traveling enthusiasts share their stories from around the world. The easy-to-navigate site allows visitors to filter through these experiences by travel group size (e.g. solo, couples, families, large groups), interests (e.g. adventure, budget, road trip), destination and season. Food manufacturer Kraft embarked on a similarly-minded mission with its KraftRecipes.com website, creating an online community for foodies to share their favorite Kraft-infused meals.

In an age of information overload, discovery-oriented initiatives are a powerful way for brands to connect with consumers, helping them find relevant offerings and ultimately make a purchase decision. Research from Marketo found that repeat customers spend almost 70 percent more than new customers, and online communities that provide legitimate value give consumers a compelling reason to keep coming back for more.

The big idea behind building an online community is to create a destination for consumers to find authentic and helpful information. When that destination lives within your owned web properties, rather than on a social media platform, it gives you more control over the information they consume, the people they interact with and the general look and feel of the experience. Moreover, owned online communities lend themselves to advanced data collection, which means better segmentation and targeting and, ultimately, happier customers.

This article originally appeared on Relevance.com and has been republished with their permission.