Three Ways To Build A Community for Your DTC Brand

Post by
Adrian Githuku
Three Ways To Build A Community for Your DTC Brand

‘Community’ is a major buzzword in the business world right now. As the physical world was shut down at various points over the past year and a half, many turned online to fill that innate human need to connect with others.

Over 70% of brands have active communities and that number is only growing. Businesses of all kinds have been using community as a part of their strategy for years, but it seems that community-led strategies are having a moment. 


The Cheers Effect



In the world of direct-to-consumer (DTC) or e-commerce brands, building a thriving customer community is becoming critical to long-term success.

In the past, building a defensible brick-and-mortar retail business of any kind was a combination of having a great product, a great location, and great relationships with your customers. In our brave new world of direct-to-consumer retail, a few things have changed. Having a great “location” is much easier now: just set up a Shopify storefront. Creating a great product is still not an easy feat, but with a growing number of contract manufacturers to help small brands get started, it can be done.

However, building great customer relationships as a DTC brand presents unique challenges. 

In a physical store, the store associates will get to know their regular customers even without trying. The simple fact that you are face-to-face with your patrons on a frequent basis makes it easy to build lasting relationships. Customers will continue to return to the store as they are familiar with the products, feel comfortable with the associates, and are confident that they will have a satisfying experience.

You could think of this as ‘The Cheers Effect’: customers want to go where everybody knows their name. 

In the e-commerce world, the Cheers Effect is difficult to replicate. Frequent shoppers are only known by their user ID or email address. Why do they buy from you? What are their style preferences? What do they like or not like about your brand?

These questions are not easy to answer in our current world and no amount of sophisticated data science can get to the real answers behind some of these questions. Some forward-thinking brands have realized this, and are looking to build customer communities to do something about it.

Community and DTC Brands

DTC brands are starting to dip their toes into the community waters. For example, some skincare brands are creating private Facebook groups to discuss routines and celebrate success with using certain products. Other brands are looking to up-and-coming platforms like Discord, the platform originally built for gamer communities, to engage with their customers in new ways.

While there are a lot of exciting things happening in the space, there are still very few best practices out there. Many brands are still viewing their community efforts as experimental and aren’t quite sure how to make them successful - or even what ‘success’ really means for them.

Based on our research and conversations with dozens of DTC brands, and our own experience building communities Uber and Amazon, here’s a description of the major types of communities out there to help you decide which will best serve your brand. 

The LAP Framework for DTC Communities

To keep it simple, you can think of DTC brand communities in the following three categories:

  • Loyalty and Engagement
  • Acquisition
  • Product Development

We think of it as the 'LAP' framework, which we'll explain in more detail below.


Loyalty & Engagement

Business Goal: Increase existing customer lifetime value (LTV)

How It Works: These are the most common customer communities in the DTC world today. These are often casual communities of customers where the brand can directly interact with the customers and the customers can interact with each other as well. These groups are often formed on either existing platforms like Facebook or are created on dedicated community platforms such as Mighty Networks or Sagelink

Ultimately, the brand is looking to create a deeper customer connection to the brand so that their customer repurchase rate will grow. To do this, brands develop interesting content for the community, create space for meaningful conversations, and offer perks and rewards to these customers for being loyal to the brand. Many of these groups are invite-only, giving a feeling of exclusivity that attracts top customers.

The key to making this type of community successful is making sure you provide value to your community members. This can be challenging with existing solutions like Slack and Facebook because brands have very little control over the experience. Groups on these platforms can get very noisy, making it hard for customers to find the content most relevant to them. Make sure to think through the right platform for your loyalty-focused community before you launch it.

Example: Curology Community - skincare brand community where members can get tips, celebrate success, and get encouragement

Acquisition

Business Goal: Use your community to acquire new customers

How It Works: Over the last year or so, acquiring customers has become much more difficult for e-commerce brands. The whole digital advertising landscape is undergoing a massive shift as the world rethinks data privacy standards. Apple’s recent iOS update, which gives users the power to stop apps from tracking cookies, is a major driver behind this.

As Apple changes data privacy standards on iOS and Safari, and Google follows suit with Chrome in 2023, we will be in a cookieless world very soon. This means that it will be very hard to target potential new customers using third-party data. Brands need to start relying on more effective customer acquisition methods. 

Leaning on strong, engaged communities as a customer acquisition lever is the answer.

These communities are set up to support spreading the word about the brand. One way to do this is to build a space for your brand ambassadors or influencers. It’s less organic, but no less effective than traditional word-of-mouth marketing. In these communities, your promoters can exchange best practices with each other, celebrate wins, and generally stay motivated to keep promoting your brand.

Example: Glossier rep program - turning their best customers into top promoters and sellers

Product Feedback

Business Goal: Improve the product, which will ultimately lead to both existing customer retention and growth

How It Works: These communities are mostly focused on engaging with customers on experiences they’re having with the product. You could almost think of these as more modern focus groups. In these groups, the brand can test new products by sending out samples and asking for feedback. They can even test new ideas by simply having customers react to designs or concepts before they create a full-fledged product. 

Brands can also get valuable feedback on current products. While product reviews on a brand’s site are helpful, they often tell an incomplete story. Customer support emails can provide a bit more insight into how customers feel about products, but both reviews and customer support messages are biased towards either very poor or very positive experiences.

Simply letting a group of trusted brand loyalists freely discuss their experiences will net a treasure trove of data on what is great and not so great about a brand’s products.

A major challenge to keep in mind with product-focused communities is that it the feedback that comes from the customers needs to be easily accessible by the brand. Public social media platforms control the data in your brand community so it can be hard to extract and use it. There are third-party platforms that give brands more ownership over this data, but they aren’t integrated with the DTC brand’s backend. The data lives in a silo and significant effort has to be put in to connect it with the rest of the brand’s data.

Example: Beauty brands (Ceremonia, Waeve, others) - various beauty brands have dedicated groups for sampling and product feedback

This is by no means a hard and fast framework of how to structure your community. Many successfully combine various aspects of these community types in a way that is authentic to their brand. The key is being clear about what the primary goal of your brand’s community is and making sure that the way that it’s managed lines up with that goal. 

Choosing The Right Platform

One of the most crucial decisions in building a DTC brand community is choosing the right platform. There are two major criteria to think about with this decision: the experience and the data.

To make a community authentic to a brand’s audience, the brand needs as much control over the experience as possible to maximize engagement. On the data side, the brand needs to think about what data is going to be useful coming from the community and how it can be integrated into the brand’s workflow. Brands also need to move towards a zero-party data approach, where customers have control over how and what data is gathered and do so willingly.

Right now, there is a gap between what community platforms offer and what DTC brands need in terms of these two criteria.

We’re building Sagelink to fix this. Our platform gives brands control over the community experience and makes it easy to track engagement in the community so that you can show a strong ROI. It’s purpose-built for DTC brands, allowing brands to offer exclusive product drops, collect user-generated content, easily unify and use the data coming out of the community via our Shopify integration. If you’re a DTC brand interested in growing your community on our platform reach out at info@sage.link and click the 'Join Waitlist' button above to join our beta program!