How to unlock new growth from digital communities

Brands with a genuine, evolving relationship with consumers unlock the most value. More and more, these relationships are forged and shaped in digital spaces. Our Brand Impact Index explores key actions for better brand growth – including how to ‘cultivate communities’. Here, we focus on the types of communities that form around organizations, both intentional and unintentional, and how to harness value from the rich data that these communities create.

Interactions between organizations and consumers increasingly happen online, in both brand-led and consumer-led digital communities. Loyalty programs, conferences, social media, user-generated content, learning environments, membership programs, and other organizational assets are generating vast amounts of data, laying the foundations for new opportunities. Organizations can turn this data into valuable new revenue streams, converting consumer engagement into a source of growth.

However, with so much information at their disposal, organizations can struggle to turn this engagement into actionable business strategies. How can organizations capitalize on the rich data generated by brand-led and consumer-led digital communities?

A new age of digital communities

Digital communities form in numerous ways around special interests. Some communities are brand-led, such as professional associations, clubs, loyalty programs, or branded membership groups where companies actively engage with consumers. However, many communities are consumer-led, where social media followers, brand advocates, influencers, and consumers share interests. In these cases, consumers form organic subcultures outside the direct control of the organization.

Both types of communities generate invaluable first-party data, offering a window into how consumers view the brand and how they interact with products and services. The fragmented nature of consumer-led communities may make them harder to control, but they are rich with insights that predict future behavior, reveal customer pain points, and uncover emerging trends. These insights are gold for not just the brand that consumers directly engage with, but also for the brands’ partners and potential partners.

The benefits of digital communities

Brands that understand and engage with their digital communities support the development of hyper-personalized experiences, subscription-based offerings, premium access tiers, and platform businesses – all based on data. Merging this first-party data with second-party data from partners, as well as third-party data from external sources, provides a comprehensive, full-picture view of consumer preferences, behaviors, and needs. This helps to refine marketing efforts, improve customer service, and develop products and services that better align with consumer needs.

Multiple organizations have created new value opportunities from consumer-led digital communities. Fitness apps like Whoop and Peloton collect vast amounts of community engagement data, from wellness and fitness habits to social interactions. These companies use the data to develop personalized wellness programs, offer premium services such as coaching, and create tiered subscription models.

In the education space, platforms such as Coursera or Khan Academy track student engagement data to create tailored learning paths. These platforms then sell insights to educational institutions or partner platforms, helping them improve programs and offerings based on real-time learning behaviors.

Real estate companies tap into data from homeowner forums and social communities – Zillow partners with companies to provide contractor recommendations based on popular renovation trends and reviews of local service providers. Nextdoor analyzes data in community posts and interactions to give real estate agents and service providers premium-level insights into homeowner needs and trends. By understanding what drives user engagement, they create new revenue models and enhance user satisfaction.

Each of these companies has built new revenue streams by transforming consumer engagement into personalized, data-driven offerings, setting an example of how digital communities can drive sustainable growth.

Creating new growth from digital communities

The blend of brand-led and consumer-led digital communities creates a rich data ecosystem. But what are brands doing with these captive audiences? Simply sending repetitive offers through digital marketing strategies doesn’t maximize the value of these relationships. A number of steps can be taken to explore the growth potential of brand-led and consumer-led digital communities:

Nail it, then scale it: Start by leveraging new insights to optimize the core business, finding areas to improve offerings or customer experiences. Then scale learnings across broader areas.
Broaden market focus: Look beyond core business areas to explore adjacent markets where digital community assets can address unmet needs. Use customer journey mapping to flag pain points that could indicate the potential for a new business or revenue model.
Analyze and map assets: Catalog key assets, including proprietary data, expertise, community engagement, and capabilities. Map these assets to potential value propositions that can serve new customer segments.
Zero in on the biggest opportunity areas: Focus on specific market segments or consumer needs with the highest growth potential, where access to digital community insights delivers the fastest path to impact. Consider low-fidelity pilots of potential concepts to validate assumptions and isolate risk.
Develop new growth hypotheses: Frame potential digital product opportunities by asking critical questions: Why now? Why us? Who will this new offering serve, and what value will it offer? Consider new business model workshops and rapid prototyping sessions to reach viable starting points quickly.
Run it like a startup: Use an agile methodology to shed the restrictions and dependencies that typically slow innovation. Build a vision and a clear plan that results in a purposeful new monetization strategy.

Digital communities, both brand-led and consumer-led, offer an untapped opportunity to gather rich data and turn them into actionable insights that unlock new growth opportunities. Organizations can leverage data-driven insights from both types of communities to understand customer behavior, build stronger relationships, and create new revenue streams. Those who seize this opportunity now will lead the next era of consumer engagement and growth. The future of brand success belongs to the data-driven.