CPG brands have had a bifurcated relationship with consumers: marketers connect through consumer-facing advertising and rely on the retailer, as intermediary, for direct interaction and sales.
Social media promised to open a new door for marketers to connect with consumers directly. Problem solved, right? Not so fast. Social media sites are now on the list of middlemen between CPGs and consumers. And, because brands now must pay to access their social communities and related data, the majority of brands have come to realize that Facebook and other social networking sites “own” the relationship and the data that comes along with it.
It’s a familiar sting. Back to the drawing board!
The topic of ownership has made its way to many brand meetings that I attend. Brand marketers want to engaging with end-consumers, but they are tired of building audiences for other businesses and, of chasing consumers from one platform to the next.
This new reality has resulted in a swelling revival of CRMs and loyalty programs. But, can traditional CRMs and loyalty programs operate in today’s social environment? In most cases, there is some missing component: a CRM lacks engagement, or a loyalty program does not include advocacy. How do brands create the authentic relationships, while also achieving one-to-one at scale?
A solution capturing the attention of CPG brands with their checklist of customer-interactions is a brand community, which appears to be a holistic solution to the consumer-direct problem. Typically, these communities have dwelled in the land of lifestyle brands like Harley Davidson’s Harley Owners Group or Starbucks’ My Starbuck Idea, where passionate customers have lots to talk about with one another and from whom brands can mine rich insights.
Do CPG brands have a seat at the table? The answer is undoubtedly yes!
CMX, a publication for the community industry, recently released a report about branded communities, surveying 400 marketing and community practitioners. They looked at why brands start communities and how they manage them. Here are three key findings that validate the direct relationship.
1. Brands believe a community will impact core operations.
Eighty-six percent believe branded communities will yield feedback to help improve core operations. Additionally, 85% of survey respondents said they believe a branded community will equally enable greater trust within their organization and improve the customer journey.
2. Brands use communities to fuel customer satisfaction, retention and innovation and, to drive revenue!
Communities have often been looked at as a cost-reduction mechanism. This priority has quickly been replaced by a desire to focus on customer satisfaction, loyalty, and innovation ideas as well as customer-generated content. Brands look to support brand champions and generate revenue in their communities.
3. Starting a community requires executive support and clear business needs
Among branded communities, more than half (56%) said identifying business needs was one of the most successful approaches to gaining funding for an online community. Forty-five percent relied on executive support and 39% built a business case. Brand communities can serve any number of strategies. It could be anything from creating loyalty to sparking user-generated content to driving trial and capturing insights. It’s important to stake a claim in how a community will best serve the brand.
For CPG marketers stuck chasing consumers from one platform to the next, branded communities that offer content, exclusive offers and conversations that have true value for consumers are the next wave and, a powerful way to turn members into brand advocates.