Heidi Cohen interviews Mark Schaefer
New Book: Belonging To The Brand: Why Community Is The Last Great Marketing Strategy
To show that Mark Schaefer walks the talk, he has built a vibrant RISE Community. In addition to its active Discord channel, the community experiments with NFTs, AI, and the metaverse as it explore the future of marketing.
Heidi: Belonging To The Brand starts by exploring the human changes that occurred during and after the pandemic.
You cite 2 key, concurrent trends:
- Loneliness increased since people lacked real-life, face-to-face human contact in their personal and professional lives during and after the pandemic. This grounds your book in the social needs most of the population feels in terms of human connection via online and offline communities.
- Marketing effectiveness continued to decline due to ever-lower results of paid promotion and ongoing erosion of trust, especially in government and media. As a result, roughly two-thirds of marketing occurs without formal marketing.
If the pandemic hadn’t occurred, do you believe that the social and business environment would still be ripe for growing brand-driven communities?
Mark: Yes, absolutely! Both of these trends have been creeping up since the 1960s. It’s complicated since it includes rising divorce rates, the decline of social institutions, and increasing amounts of lonely screen time. The pandemic certainly accelerated all of that!
Heidi: From a marketing perspective, you make the following key distinction (page 32):
- Audience represents reliable connectivity as a result of opting into a form of consistent content.
- Community provides emotional alignment and commitment to become a self-sustaining entity transcending personality or brand. “[Specifically,] community can be used by any organization seeking to build a connection with its stakeholders.” (page 36)
By contrast, I define these terms as follows:
- Audience broadly defined includes an organization’s prospects, buyers, end-users, employees, management, investors, media, government and nearby residents. Out of this diverse group, a business may have one or more segments that have stronger relationships including opting into consistent content.
- Community includes hand raisers, people whether they’re customers, employees or others, who have an emotional investment in your organization.
How would you reconcile our difference in perspective?
Mark: I’m not sure we can. : )
Based on your definition, an audience may have little or no relationship with you … like the local media or the government. So there may be no regular communication at all, let alone an emotional connection.
My definition requires that an audience has actually opted-in to receive some sort of communication from you. For example, you have an audience for your newsletter. People have opted into hearing from you, which is awesome. But it’s one-way. If you go away, the audience goes away.
Community is defined by the relationship people have with each other. Literally, this is communion. These relationships build an emotional switching cost for your brand.
A community gathers because they share some purpose, idea, or value with you. By engaging in your community, they grow, learn, or maybe change something. It’s a powerful emotional bond. The ultimate marketing, really.
Heidi: In your definition of the 3 Key Qualities of Community, they all have both social and emotional components.
3 Key Qualities of Community
- Members feel associated with other members of their community, distinguishing them from non-members.
- Members have a shared reason for belonging. Their rituals and traditions strengthen their sense of group identity and member bonding through common values.
- Community adapts to the changing needs and circumstances of its members over time while maintaining its core values. (Pages 34-35)
As a result, marketers should focus on community because people want to have a connection with others who have similar interests and desires based on their intellectual, psychological and emotional needs. Building a brand community meets these customer needs while providing business value and customer loyalty. (Page 48)
Do you think that marketers and their organizations can meet these community needs and how do they need to change to accomplish this?
Mark: It’s already happening.
For example: Sephora is known for its many brick-and-mortar stores, yet 80% of its revenue actually comes from its online community! The smallest community I profiled in the book was just 30 people. But it generated $40 in real estate sales for the sponsor company.
Whether anybody does it, I think a lot depends on the company culture. This may seem like a radical new way to go to market and it has to be supported up and down the organization. Ultimately it is a business strategy as much as a marketing strategy!
Heidi: I love that you show why businesses, and marketing in particular, must create brand communities to provide benefits that extend beyond direct financial metrics.
10 Reasons Businesses Can No Longer Ignore Brand Communities
1 Brand Differentiation
- Without an unbeatable competitive advantage based on product, place and/or process, community provides a unique way to create a differentiated customer experience that’s accessible to anyone. In the process, it adds an emotional component to the marketing mix that increases switching costs for your members.
2 Market Relevance
- Having a community enables you to have a continuous conversation with your customers revealing new ways to remain relevant to them. Marketing serves as the glue between the community and the rest of the company. This enables it to respond to customers’ needs and to take advantage of market opportunities.
3 Speed of Information
- Communities provide a competitive advantage in terms of the speed of acquiring market information firsthand.
- While trust is at an all time low, communities provide information members believe.
5 Center of Advocacy
- Communities increase customer loyalty since members become brand advocates. According to McKinsey, 87% of customers shop around and 13% of customers remain brand loyal.
6 Brand Loyalty
- Brand community creates a long-lasting emotional bond for members with the brand. As a result, members feel loyal to the brand. In turn, the sense of belonging influences their purchase decisions and increases customer retention.
7 Soul of Co-creation
- Brand communities encourage member collaboration and innovation. This results in more user-generated content (UGC) and contributes new product ideas.
8 Community-As-A-Service (CaaS)
- People pay community membership fees to gain additional benefits through a network of friends. So, the community becomes the revenue-generating product.
9 Community Connection to Culture
- Younger generations flock to more intimate online destinations, dubbed “digital campfires” by Sara Wilson.
Decades before, the Grateful Dead created a vibrant following among their fans. The Dead embraced their community to generate revenue. For example, they embraced bootleg recorders and offered them prime locations at concerts.
10 Consumer Data Solution
- As privacy concerns and online ad blockers increase in a post-advertising cookie world, brand communities provide a source of first-party data through member interactions. (Pages 54-63)
With increased inflationary trends and pressure for management, especially CMOs, to show a direct relationship between marketing spend and financial results, how can marketers make the business case for creating and maintaining brand communities?
Mark: You’ve done a good job here outlining some of the business benefits of building a community. I think it would be hard for a smart manager to ignore this potential – the business case is pretty compelling, and backed by data. If a leader reads my book, the business case is self-evident.
Further, in the book, I differentiate between direct marketing and brand marketing. If you need quick sales, you might need direct marketing in the short term. But the best-managed companies – Ikea, LEGO, Nike – are dominant because of their BRAND marketing and much of that is done through community.
I understand the need to drive sales, especially in tough times. But tough times also present an opportunity to establish brand dominance!
Since most businesses don’t operate on Peter Drucker’s theory that:
“Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation.”
Does this make it more difficult to get sufficient management support and funding to create a brand community focused on more than customer service?
Mark: I guess the world would be better off if they listened to Peter Drucker! They usually are!
To me, it’s apparent that nearly every way we go to market does not work as it did a few years ago.
Consumers are in control and companies better wake up to that! What would happen if you stopped interrupting people, spamming them, and annoying them and instead provided something they actually NEED – community?
Somebody in your industry is going to create a community and there is probably room for just one so it better be you!
Heidi: Your “Community Framework” is super helpful for readers since it guides them through how to build a member-focused community. Unfortunately, the first 4 steps tend to run contrary to how most businesses operate.
- Establish a community-first culture. Make your community a safe place for everyone to thrive, align every message, policy and product with it in your organization.
- Define your shared and sustainable member-focused, non-financial reason for belonging to the community. Make sure you include the community belief system and people a reason to join.
3 Gathering Members
- Start building your community by assembling people interested in your ideas. For example, Dana Malstaff started building her Boss Mom community through old fashioned networking and hosting a group activity. To become self-sustaining, a community needs to continually have reasons to belong and engage.
4 Redistribution of Power
- In a community, the members have the power and lead it forward. By contrast, your initial organizer checks her ego at the door to become the protector of its culture.Also, she guides the community’s future path making members feel safe in the process.
5 Monetizing Community-Based Businesses
- By believing in the community’s purpose, engaged and loyal members bring in new members and purchase from your business.
6 Success Measurements
- Most communities focus on softer brand-building metrics. They include brand loyalty, retention, engagement, enthusiasm for its products and innovation. Avoid the pressure to focus on direct financial metrics. Even Mc Kinsey advocates for selecting Community Key Performance Indicators (KPIs) to measure customer engagement. (Pages 54 – 63)
While solopreneurs and small businesses have less red tape and can be more nimble in their use of employee time over direct financial investments, how can marketers in larger organizations including NFPs (Not-For-Profits) get their management team onboard to create brand communities?
Mark: My book has diverse case studies from gaming, retail, nonprofits and more. There is even a stay-at-home mom raising five kids who has a profitable community numbering 50,000 people! Her community actually IS the business.
I don’t think the business case is any different for any of these examples – big company or small. Community provides a powerful source of connection and market dominance in a world where marketing is getting more difficult every day.
RECOMMENDED READING: OTHER MARK W. SCHAEFER AMG AUTHOR INTERVIEWS
As always, thank you Mark for sharing your time and marketing smarts.
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Photo Credit: Heidi Cohen and Mark Schaefer