Community-Led Growth: What It Is and 6 Awesome Benefits

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A good business owner is always looking for ways to improve and grow their business. Marketing is huge, and anyone looking to boss their industry seeks out ways to make their marketing strategy more effective. We’ve waxed poetic about the benefits of adding bulk texting and QR codes to your marketing strategy, but there is another tool you should utilize to expand your brand: Your audience. How do you do that? Community-led growth.

What is community-led growth?

Community-led growth (CLG) is a business strategy that leverages a company’s community of users, customers, and fans to drive growth and engagement. The idea is to create a strong sense of community around a product or brand and to use that community to drive customer acquisition, engagement, and revenue. This can be achieved through tactics such as user-generated content, referral marketing, and community events and activations. The goal is to create a self-sustaining growth cycle where the community drives new user acquisition and engagement, which in turn fuels further growth and community building. Lather, rinse, repeat.

Why does it matter?

No matter how large your customer base is, every brand has a community surrounding it. Word of mouth and recommendations from trusted people in one’s life are effective and valuable marketing tools. By harnessing the power of the people passionate about your brand, you can turn them into some of your best advocates. Community-led growth is targeted and mutually beneficial. It helps your company by increasing your reach and engagement, and the customer can get more out of your product or service while being able to provide feedback on the future of your business.

So what are the benefits?

1. Cost-effective customer acquisition:

CLG can help companies acquire customers more cost-effectively than traditional sales and marketing methods, as the community can help drive referrals and new customer acquisition. By building a community of passionate experts, whether online, in-person, or both, those passionate experts can attract more people like them, saving you money on marketing strategies aiming to reach those new customers directly.

2. Increased customer engagement:

CLG can create opportunities for increased customer engagement, as users are more likely to be active and involved in a product or brand when they feel a strong sense of community. By creating an online or in-person community around your business, your customers will feel a more personalized connection. Aren’t you more likely to recommend brands and products to people that you love and feel connected to? So are your customers.

3. Brand advocacy:

If you’re curious about a new product or company but unsure if it’s worth investing your time and money in, having a trusted source you can rely on for a recommendation is paramount. Think about the companies you interact (in some way) with on a daily basis. Aren’t you more likely to tell your friends and colleagues about the ones you love? CLG can increase brand advocacy, as community members are likelier to recommend the product or brand to others.

4. User-generated content:

Community-led growth can create amazing opportunities for user-generated content, which can be used to drive further engagement and growth. Testimonials, reviews, forums etc. can all be user-generated and incredibly impactful on your brand.

5. Improved customer retention:

CLG can help improve customer retention, as community members are more likely to stick around and continue using the product. If your customers feel connected to your brand on a more meaningful level, they’re more likely to stick around through your evolution as a business. They will likely be some of your first adopters when you launch a new product or service, and the longer you can retain them, the more powerful the community will be.

6. Data-driven decision-making:

CLG generates a wealth of data to inform and improve product development and overall business strategy. Since your community is so much more connected to your business than a more passive audience, you can get more nuanced and tangible feedback from them. By hosting your community online in places like Slack, Discord, or LinkedIn, you can also use native data and analytics to understand your customers better and make more informed decisions.