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Do proprietary brand communities work as an e-commerce booster?

By on 22. December 2016

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Over the last few years, companies have invested in a stable, high-performance e-commerce infrastructure to expand their existing channel portfolio. The focus was on logistics, range and technology. Today the standard is fulfilled in many places: products are presented online, processes are organized. However, in many cases sales expectations for the online shop have not been met yet and the growth targets had to be modified in many places because of the competitive pressure [1]. Making brands: multichannel is a must, but it is difficult to keep customers online and motivate them to make new purchases. Loyalty to an online shop is only available in individual cases: buyers are often one-time customers.

Fragmented decision cycles slow down e-commerce
Therefore, the next strategic development step for e-commerce is to bring online shops to life. Instead of a logistics-driven perspective on the company and the product, the focus must be on personal and emotional customer experience. This is especially true for providers of high-involvement products: here the purchasing decision cycles are long and fragmented. Thus, to analyze the behavior of a consumer through the entire decision-making process is usually impossible. Situational influencing factors can suddenly take the decision in a completely different direction. Apart from the immediate product properties, the consumer increasingly seeks for emotions and information on the usage context of the product. “Does the product really fit my lifestyle?” He asks. On his decision-making trip, he is interested in authentic content that is not primarily generated by the vendor, but by other brand enthusiasts. Such information is viewed as more reliable and can trigger the decision-making process.

Proprietary brand communities trigger the decision-making processes
A proprietary brand community initiated by a company around its brand is a value-adding tool that can assist customers on their journey with the brand, touch them emotionally and personally, and bring e-commerce to life: [2] Brand communities have a clear sense of togetherness. The brand as a common reference point creates a sense of attachment to other members of the community. Shared experiences or the sharing of experiences in the community leads to a common story and strengthens the identification with the brand. Each individual member feels an emotional commitment, not only to the brand but also to other members of the community.

In principle, a proprietary brand community can support all phases of the purchase decision:

  • In the inspirational phase, desires are aroused and manifest. The customer, who does not need any specific products yet, is confronted with the world of the brand.
    Contribution of communities: Experience-oriented stories of other customers as a source of inspiration.
  • The customer evaluates various options and chooses a product.
    Contribution of communities: Product evaluations, recommendations helping to gain more confidence in the decision-making process and serving as “social proof“ for the product and the brand.
  • Once the customer is a happy owner of the product, he starts looking for confirmation that he has made the right choice. On the other hand, he is interested in specific services that support him in the use of the product and in communication with other like-minded people.
    Contribution of communities: Specific services for community members, Q&A as service channel to increase satisfaction.
Starting points customer journey

Starting points for added value on customer journey.

The prerequisite for a proprietary community to exist is an exciting place where customers can share opinions. The chances of success increase greatly when companies are able to link community functionalities to their own website. Only in this way does the brand fully benefit from authentic contents generated by the community.

Interaction encourages identification
Proprietary communities create commitment and therefore function as an e-commerce booster, not only in the short term but also sustainably. The customer feels noticed and taken seriously in his needs. Concrete benefits can be divided into four areas:

  • Communities make customer experience more emotional: A PAC study entitled [3] “Holistic Customer Experience in the Digital Age” shows that customer experience is a strategic topic for top management of 70% of companies surveyed in Germany, France and the UK. Customer experience comes alive thanks to the integration of opinions from the community. Product information is enriched by authentic content from other brand enthusiasts, which makes the buying experience more emotional and thanks to social proof brings more confidence into the decision-making.
  • Communities strengthen Customer Lifetime Value: Building an integrated brand community has a direct impact on customer value. In the short term it happens by increasing the conversion rate, cross-selling and reducing the amount of bad buys. In the long run, it happens by increasing the purchase frequency. By seeing the product in the context in which it is used, consumers can assess how it suits them better and more quickly.
  • Communities create loyalty: Integrated brand communities can shape long-term relationships by establishing emotional barriers preventing customers from switching to another brand. Identification, commitment and connection to the brand create loyalty.
  • Communities show innovative approaches: In addition, companies can use the brand community’s observations for their product development and target group definition.
Proprietary communities

Proprietary communities create commitment.

„How to get started“
The development of a functioning community in which the members interact with each other takes a lot of work, so it is useful to think it through before starting to act:

At the strategy level, it is important to find out how much the potential for identification and mobilization of your brand or product there is.

At the target level, it is necessary to define the value added created by participation for individual members, but also for the whole community.

At the system level, it is important to examine the extent to which community technologies fit into the existing infrastructure in order to minimize media disruptions and redundancies.

 

Sources:

[1] Netzreport 2016

[2] 3 Characteristics of communities according to Muniz and O’Guinn

[3] https://blogs.adobe.com/digitaleurope/files/2015/09/StudyHolisticCXAdobe.pdf

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