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Imagine starting a restaurant in a busy downtown. You lease a nice spot, renovate the space, develop a menu with style, and—before long—your spot is buzzing. There’s a wait for tables every night, and everyone who drives past it wants to come in.
But then, your landlord raises the lease significantly, forces building renovations that reduce your dining room size, forces you to take down your signage, and tells you he wants to charge an entrance fee for every customer who walks through the door.
Before long, your customer flow diminishes to a trickle, your revenue is down, and your expenses are up.
That scenario might sound familiar if you’re a brand heavily invested in social media customer acquisition.
So, what’s the solution?
It’s time for brands to bring their acquisition closer to home.
Social Is Becoming an Expensive Marketing Crutch
Over the years, social media platforms have become incredible marketing channels with innovative monetization tools and features.
Users and businesses can now generate income through various means, such as in-app purchases, subscriptions, and creator tools. As a result, they have been able to build engaged audiences and communities while making use of greater opportunities for monetization.
However, as social platforms—including X and Reddit—have begun exercising their power to change rules and revoke access to data, brands may find themselves in the predicament of the restaurant owner in our analogy.
Recent efforts by various social media platforms to enforce monetization on APIs, which are integral to the existence of social media management tools and analytic reporting, have complicated advertising on these third-party platforms.
X’s moves toward a full subscription-based model raise a paywall on the entire experience and will almost certainly fail by diverging from the basic tenets of connection that grew social platforms in the first place. Since 2022, X’s revenue hasdeclined 11%, and median engagement rates per “Tweet” are just 0.035%.
The Push for Paid Access Will Diminish Social Returns
Not all implementations of “Premium” content on social media have had a negative impact on users. Payment structures can allow online communities to provide authentic value or exclusivity to thrive.
Consider LinkedIn Premium, for example. The service offers users access to additional features, such as training and career development content and additional insights, for $40 per month, while free users are still given access to most of the site’s features.
But such examples illustrate the core issue with social media’s large-scale push for monetizing users: It’s one thing to charge for career-advancing content, another to charge users a fee to follow the news and to connect with friends and family.
And that’s why brands need to start focusing on the land that they own and on creating unique, owned communities online independent of third-party social apps.
Technology today allows companies to transform their apps and websites into social networks where they can build strong relationships with their community, on their own land, while owning all the data.
Building Your Own Community Is the Path Forward
When companies host a dedicated space for their community, its users are more inclined to invest in additional tools and features to help the space thrive.
Companies’ transforming their apps and websites into thriving communities is cost-effective marketing that also allows brands to build relationships directly on their own platforms in addition to offering their products and services.
And the best part of building an online community for your customer? They love it—because they build relationships with other customers, and they engage in compelling conversations and information-sharing.
And—in the end—they make a brand’s acquisition funnel far more sustainable.
According to the Numbers…
In fact, actively acquiring new customers rather than re-engaging current users can be up to 10 times more expensive. Brands also have a higher chance of selling to existing customers, with a probability of 60-70%, compared with a mere 5-20% chance of selling to new customers.
And, when you cater to the clientele you have that already loves your product, they tend to spend even more money: Active in-app communities experience a 40% boost in user retention rates.
When brands successfully build a thriving community, they create an opportunity for people to spend more time on their own apps, engaging with others who share a sense of belonging, or engaging with the company. That positive loop of activity is referred to as “the in-app community loop.”
Fully 77% of businesses are already using social media to reach customers, so most have already begun building an online community. Implementing social features (such as activity feeds) into owned communities boosts retention up to 40%, increases engagement (35%), accelerates growth (30%), and increases revenue 2.8-fold.
Private Communities: Two Examples
Noom, a subscription-based app with over 45 million users worldwide that tracks user food intake and exercise habits, has built an online community that fosters genuine connections between customers through micro communities within the app.
By removing the need for an external platform to connect with their community, Noom was able to take full control of members’ activities and safety. With the inherent gatekeeping and concentration that comes from focusing only on users who have similar interests, the community discourse is inherently more positive, and connections are less likely to diverge into online bickering or get off-topic. Users can engage with coaches and other members who share similar goals or interests, resulting in a personalized experience that increases engagement.
And online communities don’t just flourish in the case of new, tech-centric brands: Legacy brands can effectively build off of decades of brand-building to quickly build flourishing communities. For 40 years, Harley-Davidson has built one of the most committed groups of brand loyalists of any company on Earth. Off of that prior work, the brand’s online community quickly skyrocketed to over a million users built around sharing a love of the open road, with in-app features aimed at maintaining engagement between users and helping people to get out and ride.
Both apps boast unique features designed specifically for loyal users, such as activity feeds and the ability to scale with expanding communities, distinguishing them from other forums, such as Facebook groups and Reddit threads.
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The current model of social networking is flawed; as a result, brands are changing their approach by creating loyal communities on their own platforms.
By making community a core part of their strategy, brands can create better products and achieve higher engagement and retention rates. That leads to unparalleled differentiation and increased revenue, benefiting both the brands and the people who value meaningful connections within niche communities.
More Resources on Online Communities
Move Over, Social Platforms: Niche Online Communities Are the Wave of the Future
