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Online communities comprise potentially valuable real estate in the world of loyalty marketing because they allow members to share information and exchange ideas over multiple digital media and devices. From a marketing perspective, they can foster customer loyalty while developing legions of brand ambassadors.
What’s more, they enable more effective marketing because they help improve segmentation and targeting by providing a more in-depth understanding of customers’ desires and preferences; and provide customers with user-generated content, which has a more powerful influence on purchase decisions than brand-generated content.
However, according to a new study from Leader Networks, online communities are challenged to track metrics, but data suggests a strong relationship to customer retention and driving revenue. In November 2016, Leader Networks surveyed nearly 300 U.S. marketing and community leaders online to answer three key questions:
How is online community impacting business goals?
Are communities using metrics that resonate with business stakeholders?
Is there a better way to measure and demonstrate the competitive advantage your online community delivers?
The responses to those questions show that online business communities usually exist on an owned platform, have a business plan and success measures in support of business needs, as well as executive sponsorship, and staff.
As a result, this research led to the Community Impact Framework, a ground-breaking resource which, for the first time, gives marketing and community leaders a set of measures and metrics/KPIs that they can use to track and prove the business impact of their community – using vocabulary and methods that resonate with financial and business stakeholders.
Here are some of the key study findings:
Competitive advantage means keeping existing customers for most firms; 57 percent of marketing and community leaders reported customer retention is key for competitive advantage. What’s more, 37 percent of organizations have not integrated their communities with the company’s CRM system, which prevents community leaders from syncing interactions and data across the customer lifecycle.
There is a burning need for better reporting on community cost savings.
45 percent of marketing and community leaders say that their community reduces costs for their organization. But, an additional 37 percent don’t know if their community saves them money on support, customer retention, marketing, or other expenditures.
Communities are producing revenue – in substantial amounts – but it takes time.
Nearly half of community leaders say that their community generates or influences revenue. But mature communities have a greater impact on top-line growth.
Marketers are at the helm of online communities – which is an incredibly strategic position. Marketing is the primary owner of the community for most organizations (79 percent) although many other lines of business are involved in community initiatives.
Business-focused metrics are nascent – but a standard of measurement is emerging.
72 percent of community leaders face challenges related to analyzing and reporting data – and an additional 22 percent lack reporting tools.
The study also says that B2B communities are leading the way to demonstrate the role online communities can and should play in delivering real value for businesses through increased profits and loyalty.
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