Few things can drive profitability more than maximising the lifetime value of an enquiry. For most businesses, an enquiry is expensive to secure. As such maximising the return from that enquiry makes perfect sense. Maximising the return from every enquiry, in turn, involves maximising conversion rates, the average sale per customer, margins, repeat purchase rates and referral.

Repeat business and referrals are especially crucial given that – repeat customers spend 300% more than first-time customers, repeat customers refer 50% more than first-time customers, referred customers spend 25% more than non-referred customers and refer customers are five times easier to convert to a sale than 1st-time customers. Perhaps the most effective and cost-efficient way of driving repeat business and referrals is through a brand community.

It is reported that some 61% of US corporations have established a brand community, generating a range of benefits as illustrated by the following:

• 86% of Fortune 500 companies say communities provide insight into customer needs.
• 96% of businesses see the value of customer collaboration.
• 66% of businesses use brand communities for product development.
• 71% of businesses use customer collaborations for market research.
• 64% of companies report brand communities have improved decision-making.
• 80% of marketers say that brand communities have increased traffic.
• 53% of Americans who are part of a social brand community are more loyal to the brand.

A brand community is in essence – a group (drawn from a well-defined target market) with shared values formed based on attachment to a product or marque. Most brand communities are online. Examples of highly successful brand communities include those developed and actively managed by:

• Starbucks
• Harley Davidson
• Playstation
• Oracle
• Nordstrom

The primary characteristics of a successful brand community include:

• A membership drawn from the primary target market for the brand
• The active and consistent engagement and influencing of members
• The brand delivering added value to members – addressing key needs
• The development of a shared emotional connection and sense of belonging
• A high level of trust established between the brand and the membership

Facilitating the effectiveness of a thriving brand community requires:

• Understanding the target market and the added value they will respond to.
• High-quality content that adds value and directly addresses needs.
• Listening as closely as possible and taking on board the feedback offered.
• Creating a sense of belonging by communicating shared values.
• Allowing time and having the patients to build the community.

The stages in developing a brand community are most often as follows:

• Ensuring you have a well – defined brand and brand story.
• Defining the target audiences and the added value they will respond to.
• Developing or buying a software platform for the community.
• Developing for the community a clear mission and values constant with the brand.
• Implement a strategy for developing tangible added value for members.
• Establishing rules, protocols and guidelines and a process for managing them.
• Developing high-quality content to attract and engage members.
• Invite members and invite members to invite members.

Once the community is established, it needs to be maintained and developed, with:

• Regular high-quality content.
• Regular communication with members.
• Offline events and opportunities.
• Regular rewards for membership.
• Actively asking members for their views.

There is a lot of work in developing and maintaining a brand community, but the rewards are substantial. The brand community established by Manchester United FC has ensured that football only constitutes 19% of total revenue now. The community has facilitated new streams of revenue. In addition to driving revenue through enhanced loyalty, brand communities drive down marketing costs.

There are few tools more powerful in digital marketing than a brand community. Do yourself a favour and look closely at the opportunities they offer to businesses of all shapes and sizes, in all markets and industries.