Guides What is a customer community?

What is a customer community?

Last updatedJune 8, 2024
AuthorKai Forsyth

Companies have recognized that building strong relationships with their customers has become critical to remaining competitive, building loyalty, and retaining customers. With this, many companies have invested in the creation of customer communities around their business. These communities provide a dedicated space for their customers to connect, share product and industry knowledge, and engage with their brand.

In particular, software companies have been one of the biggest proponents of customer communities over the last decade. By providing a platform for their massive user bases to connect with each other, share best practices, and learn from one another, customer communities have helped software companies scale product adoption, reduce churn, and improve customer satisfaction.

This guide explores the concept of customer communities, dives into the characteristics that make up a customer community, and highlights the tangible advantages they offer to businesses.

Understanding what is a customer community

A customer community is a space – usually online and attached or integrated into a company’s website or product – where the company’s users can come together to interact with each other, exchange ideas, and connect around the company’s product or service. Customer communities are a platform that encourages many-to-many dialogues between the business and its customers, fostering a sense of belonging and shared purpose. While communities generally take many forms and serve different purposes, such as communities of practice or interest-based groups, a customer community is specifically focused on the users or customers of a particular product or service.

For software companies, a customer community acts as a central hub where users can discuss the platform, ask questions, share best practices, and offer feedback. It’s a place where their customers can engage with others who are using the same product, supporting each other to achieve their goals and get more value out of a company’s service. What sets a customer community apart from other types of communities is its direct link to the success and growth of the business, as it revolves around the users’ experience with the company’s offerings.

What are the benefits of a customer community?

Building a thriving customer community can provide numerous benefits for businesses. Let’s explore some of the most significant advantages in detail.

Improved customer retention and product adoption

By participating in a customer community, users can deepen their understanding of the platform, share their knowledge with others, and fully adopt and utilize the product. This level of engagement leads to increased product adoption, as customers discover new ways to leverage the software and incorporate it into their usage of a company’s products and services. One of the key ways that customer communities drive retention is by helping users discover new use cases and fully utilize the product. When customers engage with the community, they are exposed to a wealth of knowledge and ideas shared by their peers. This exposure can lead to customers discovering new ways to apply the product to their specific needs or industry, unlocking additional value that they may not have realized on their own.

For example, a customer might join a community to learn how to use a specific feature of a software product. As they engage with other users and explore the community, they may come across discussions or case studies that showcase how other businesses in their industry are leveraging the product to solve similar challenges. This knowledge sharing can inspire the customer to think creatively about how they can adapt and expand their own use of the product, leading to increased adoption and satisfaction.

Companies have observed that customers who actively engage in their customer communities tend to have higher levels of product adoption and provide more positive feedback, including higher Net Promoter Score (NPS) ratings, compared to those who do not participate. These engaged customers are more likely to explore and utilize a broader range of features, integrate the product into their existing systems and processes, and find new ways to apply the software to their unique challenges. These customers often experience increased productivity, efficiency, and business value, which in turn drives higher retention rates and customer lifetime value.

Reduced support costs and improved self-serve efficiency

One of the most impactful benefits of a customer community to a company is its potential to reduce support costs. When users have a dedicated space to ask questions and seek help, their peers are often willing and able to assist them. This peer-to-peer support not only reduces the workload on the company's customer support and success teams but also leads to the creation of a valuable knowledge base. As more questions are answered within the community, future customers can easily find solutions to common issues, enabling them to self-serve and minimizing the need for direct support from the company.

Companies can also strategically shift their support and success teams to participate in the community, creating value by contributing to the knowledge base that can be discovered by other customers in the future. By having support team members actively engage in the community, they can provide expert guidance, share best practices, and help resolve complex issues. This approach not only enhances the overall community experience but also ensures that valuable knowledge is captured and accumulated over time.

With a customer community in place, companies can effectively deflect and shift some of their lower value and less urgent support questions to the community. This allows their support and success team to focus on more high-value activities, such as handling critical issues, providing personalized assistance, and proactively reaching out to customers. By leveraging the power of the community to address common questions and concerns, companies can optimize their support resources, improve response times, and deliver a better overall customer experience.

Improved product development through customer feedback

A customer community is a valuable source of insights and feedback. By engaging directly with users, product teams can gain a deep understanding of a customers’ needs, pain points, and desires. Through collaborating with customers and incorporating their feedback into the development process, companies can create products that truly resonate and solve the problem’s their customers face. When customers feel heard and see their suggestions being implemented, they develop a stronger sense of loyalty and are more likely to stick with a company’s product or service.

For example, a software company might use its customer community to gather feedback on a new feature before launching it. By involving customers in the testing and refinement process, the company can ensure that the feature meets the needs of its users and avoid potential pitfalls.

Increased new customer acquisition and leads

While a customer community primarily serves existing users, it can also be a powerful tool for attracting new customers. The user-generated content that emerges from a vibrant community, such as discussions about the company's products, services, or industry, can serve as a magnet for potential customers. As they discover the wealth of knowledge and support available within the community, they are more likely to view the company as a trusted authority in its field. This can lead to increased brand awareness and ultimately drive customer acquisition.

Imagine a potential customer searching for a solution to a problem they're facing. If they come across a community filled with helpful discussions and resources related to that problem, they're more likely to consider the company's product as a viable solution. The community serves as a testament to the company's expertise and dedication to customer success.

Many companies have reported that their customer communities have become a significant source of new sign-ups and customer acquisition. By providing valuable content and fostering a supportive environment, these communities attract potential customers who are actively seeking solutions to their challenges. As these prospects engage with the community and witness the success stories and expertise shared by existing customers, they are more likely to convert into paying customers themselves, recognizing the value and credibility of the company’s offerings.

Increased expansion into other products and services

As customers become more engaged with a community, they naturally discover new ways to leverage the company’s services. Through discussions with other users and exposure to a wide range of use cases, customers may uncover additional features or functionalities that can help them achieve their goals more effectively. This organic discovery process can lead to increased adoption and expansion of the company's services over time. By fostering a sense of community and encouraging users to explore the full potential of the platform, businesses can unlock new opportunities for growth and revenue.

For example, a customer might join a community to learn how to use a specific feature of a software product. As they engage with other users and explore the community, they may discover additional features or integrations that can help streamline their workflow even further. This discovery can lead to the customer upgrading their subscription or purchasing additional services from the company.

Summary of customer communities

Customer communities have emerged as a powerful strategy for companies to build stronger relationships with their customers, drive product adoption, and foster long-term loyalty. Through providing dedicated spaces for customers to connect, share knowledge, and engage with a company, businesses can leverage the content and relationships in their community to meaningfully impact their business.

Companies that have large user bases who serve thousands of customers, like software or product companies, are examples of companies who seek to benefit the most from customer communities to scale their operations, reduce churn, and improve customer satisfaction. By prioritizing the needs of customers and creating engaging, supportive environments, companies can unlock the full potential of their customer base and drive lasting and positive impacts to their business.

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