In her second post for Mind the Product, Naimeesha Murthy, Product Leader and Founder of delves into community-led product development, and why it is important to build a thriving community around your product. Read her previous post on How to break into product management.
A company thrives on account of a lot of factors, one of which is its strategy when it comes to sales and customer lookup and retention. According to eConsultancy, 82% of business leaders agree that customer retention is way cheaper compared to customer acquisition. An effective GTM strategy provides a clear direction for the company as regards its policy on taking on the competitors head-to-head to get the edge, as well as strategies to be implemented to achieve the company’s goals. It’s the company’s anchor and guide, and every company is in need of a robust GTM. According to Reddit co-founder Alexis Ohanian, more than half of the 500 publicly traded companies are going to have a chief community officer. This only shows that companies now recognize the importance of community-led product development.
Concept of Community-Led Product Development
Community-led product development pertains to the go-to-market strategy that focuses on the community of consumers who support the product and the company that produces it as a tool for customer acquisition. It relies on the community’s inputs for the growth of the product and the company. It gives value on relationship-building with the consumers and aims for brand loyalty and ultimately, increased revenue.
How it helps
Community-led product development is proven to provide a wide number of benefits, if a company was able to properly maximize the strategy. Here are some of the most prevailing benefits of community-led product development:
1. Feedback directly came from consumers
Since it focuses on reaching out to the community of consumers, any and all feedback comes directly from them. These unadulterated suggestions could be a good avenue for the product’s continued improvement. Since customers were able to directly give their feedback as well, you will be able to mitigate possible risks in the development of your product or service by acting on their comments or suggestions early on. You will be able to avoid wasting resources because you can validate your ideas with your consumers early and often during the development process.
2. Develop rapport with consumers
In community-led product development, you will be able to develop a rapport with your consumers and continue to nurture your relationship with them from there. Soliciting feedback thus will be much easier and candid and more importantly, constructive, with the product’s improvement in mind.
3. Community turns into highly vetted leads
But of course, the community as the source of feedback could also be your consumers, ultimately. Being first-hand witnesses to how your product works, it would be easy to market to them given that they already know about your product extensively.
4. Be guided by the pillars of community development
In order to cultivate the community that you are envisioning to be the support system of your business, these are the badges that your consumers will be looking for:
- Good Faith
You must demonstrate your business’ credibility and integrity, by providing a product or service that is not only aesthetically pleasing but also responsive to the needs of the consumers. Your business must also be truthful when it comes to its branding and marketing, and should be reachable for feedback.
- Seek feedback
It is one thing to be open for feedback, and another thing to actively seek feedback from your consumers. Be proactive in soliciting their comments on what could be improved by providing channels such as emails, links to surveys, physical surveys, suggestion boxes, and such.
- Follow through
Whenever there are comments or feedback made by the consumers, always make sure that you respond and assure them that actions will be taken to address them. Once you do, do not forget to give a quick update. This gives a personalized feel to the relationship between you and your consumer, which your consumer will appreciate.
- Find a focus
With all matters seemingly important in the business, it is prudent to identify what aspect to focus on which could greatly help in building up the community. Be selective in choosing which to focus on so you can devote your energy in cultivating it.
- Navigation: Google Maps
Aside from direction, Google Maps provides reviews directly from community members regarding a certain restaurant, shopping destination, resort, etc., which helps set the expectation for other community members. It also provides an avenue for community members to ask questions where other community members are free to answer them on account of their own experience.
- Brokerage and Social Investing App: Public
This app lets you invest in the stock market for as little as $1 from a selection of over 5,000 stocks and ETFs. It gives you an option which companies, people, and interest-based themes to follow to gain insight and explore new companies. As a part of the Public investing community, you can start or join group chats to discuss companies with other investors, ask questions, and build your investing knowledge.
How to build a thriving community
It is one thing to put up a community, it’s another thing to sustain it. Here are some things that you need to keep in mind for your company’s community engagement to be successful:
1. What’s your niche? You need to identify which segment of the market is your target audience. You also need to ensure that you have the proper background, skills, and resources to dive into the market.
2. Who is your audience? Know your business’ potential consumers. Profiling them could be a big help in terms of preparing the marketing materials and knowing which features to develop to be able to meet their needs.
3. What does your target audience think, feel, say and do? Be aware of the existing sentiment that your potential consumers have regarding the line of industry that you are to enter, as well as their thoughts on your business competitors. Having a grasp of these could give you an advantage in gearing up your business.
4. How will you generate content for your audience, and which platform would be best to use? To be able to engage your consumers, you need to be able to identify what kind of media or platform that most of them are currently into or using. Picking the right one could help expand your business’ reach.
5. Which is it: online or in-person community? In the kind of business that you are in, evaluate which type of community would bring the most benefit. Different kinds of industries would need different types of engagement, and picking the proper type of community would further strengthen it.
6. What does your marketing stack look like? Be aware of your business’ existing tools and software, and evaluate whether they are still bringing the best results for you; if not, find out which could, and conduct if it would be sustainable for your business.
How online community platforms differ from social media
The line between online community platforms and social media is thin, but make no mistake, there are definitely differences between the two. Online community platforms are formed or created, with different people bound by a common interest, in this case, your business’ product or service. On the other hand, social media is a platform where people who know each other connect on different levels connect and interact. The setting could be either for interactions with friends, family, or even professional colleagues.
Monetizing through Community-Led Product Development
As with any GTM strategy, the ultimate goal of community-led product development is to translate community engagement into sales and profit. There are a number of ways that you can do this, and the key here is choosing which mode fits your business the most.
Create a membership site
You can opt to create a membership site where community members, once they opt in, can enjoy certain perks such as discounts, exclusive invitations on events, and the likes. What is important here is that you will be able to show the consumers the premium of having to pay a membership fee and that it’s well worth the amount that they are going to shell out.
Sell an online course
Another option is to put together a package for online courses that your consumers can buy. These could be for skills improvement or additional knowledge, something that could add value to their everyday lives.
Start a coaching program
You can also explore setting up a coaching program for your consumers. You can provide mentoring to those consumers who are also interested in putting up their own businesses.
Promote products as an affiliate
Promoting other businesses’ products or services could also be an option for you. In doing so, you can earn a certain portion of the sales made through your channel. Not only are you helping out another business to succeed, but you are also earning from the process.
You can also use your business as an advertising platform for other businesses, products, and services. It wouldn’t harm your business because you’ll be choosing strategic partners that could likewise benefit your business when you advertise them. Also, income can also be derived from advertising.
Sell branded merchandise
Aside from your business’ products or services, you can also sell merchandise from other renowned brands to add up to your sales. You can bank on their brand’s sellability to bring profit to you and at the same time, bring extra traffic to your channel which could also help in your own product or service’s visibility.
Ask for donations
As you continuously improve your business’ product or service, you can also call for donations or sponsorships from your loyal consumers. However, if you do this, make sure that you have something to show for so that your consumers can see the value of their contribution and at the same time, it’s a testament to your business’ credibility.
You can also consider selling out your business altogether. In doing this, it is important to have a proper business valuation in order to get a maximized profit.
Due to the various rewards a company could reap from employing community-led product development strategies, it has become the new go-to for companies and brands who are seeking to develop their relationship with their consumers and engage more with their product or brand’s dedicated community members with the end goal of increasing their revenues and at the same time, develop a better version of their product and their brand. A lot of work is needed to see the success of the strategy. Proper planning and execution will be the key to making community-led product management work for you.