Insights

Why your app needs a community function at scale

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Yaekyum Lee Global Head of CX
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Why your app needs a community function at scale

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Consumers today expect a deeper connection with brands. Plus, as fundamentally social creatures, communities provide social proof and an intangible value to customers, along with an added layer of stickiness to your app. 

But social + proliferation isn’t just about retention. It’s about survival. 

We all want our businesses to reach scale and become the highlight of startup news. Because making it big means you have the user base to create that next product or service and continue to expand. 

Reaching scale is often a double-edged sword, though. Once you establish proof of concept, the giants like Facebook, Google, WhatsApp, Amazon and WeChat start to take interest, leaving you incredibly vulnerable. These behemoths snatch up promising startups as fast as they can. Alphabet (which owns Google), for example, owns over 300 companies (possibly closer to 400) across countless verticals, including ad tech, fintech, on demand, and many more. Meta (formerly Facebook) owned a similarly diverse group of around 80 companies as of 2020. WeChat’s super app offers over 11 services through its platform, while additionally running at least 12 separate fintech apps.

These big fish have the resources to duplicate your core offering and leave you in the dust. At this point, you either hope for an acquisition or find a way to fight the giant. But without a community, death is imminent. 

Once you reach scale and have proven to the world that there is a large market to go after, you’re at war. Communities are a must-have moat to your business — providing you the edge to compete and survive the total takeover. Because while the giants have money and development power, recreating a genuine community takes a long time. 

Companies like Strava, Reddit, Yahoo Fantasy, Dream 11, Paytm, PicPay, PayPay, PUBG, Nextdoor, Pinterest, Github, Stackoverflow and Quora are all proof that a strong community can keep your business safe so you can continue to scale without intrusion.  

But survival isn’t the only benefit to having a community. 

5 benefits of using communities to scale (and survive)

We’ve had the unique advantage of watching our customers transition and evolve into social+ apps. Many of them were looking for ways to build a community to retain their users at a large scale, without pouring resources into development.

Our customers are experiencing numerous benefits by creating a community experience inside their app, including:  

Benefit 1: Customer retention

Acquiring new customers is hard and expensive. It costs 5X more to land a new customer than it does to retain an existing one.

Benefit 1: Customer Retention

Communities provide significant value to your customers because they allow them to do what they need on-app — no third party required. They also get the added benefit of socializing and building ongoing relationships with you and other users.

With real-time access to your company, users feel a greater sense of loyalty. And with community access, you’re able to provide updates, fix problems and communicate with your users directly, helping you provide loads of extra value. 

It’s been said that communities are the moat to competition. This resonates with our customers because while software and features can be duplicated, communities usually can’t. You’re much less likely to lose your customers to competitors if you have a valuable in-app community.

Benefit 2: Reduced support costs

When communities respond to user questions, it’s 72% cheaper for companies than having them contact support for the same answers. When they can find solutions without contacting support, user satisfaction is higher, too.

Benefit 2: reduced support costs

When customers have questions, they can easily search the existing knowledge base or reach out to other community members, saving your customer service reps tons of time.

If customers can’t find the answer they’re looking for in the existing knowledge base, they can ask a question in a relevant community forum and get it quickly answered by other members or your support team.

Then, that question and answer is added to your existing knowledge base, expanding its capacity to assist future users. All the while, your community continues to gain steam (WordPress is an excellent example of this type of community support).

Additionally, with integrated community chat, rather than clogging up the phone line, customer service reps can handle multiple chats at one time and quickly solve issues. This allows you to hire fewer reps and use fewer resources (one computer terminal versus numerous phone lines).

Benefit 3: Customer feedback

One of the biggest benefits of having a community is getting direct access to your customers’ opinions. It can help you identify their needs and respond to them quickly.

With a community, you always have a built-in pool of beta testers for new features and the ability to run surveys and polls to get instantaneous feedback. With community data, it’s easy to identify trends and pain points quickly and really give your customers exactly what they want. Since responsiveness is a key customer value, providing additional ways for them to contact you and give feedback is a make or break proposition.

Benefit 4: First-party data

With the death of cookies looming, our customers are always looking for non-invasive ways to collect first-party data. While they already have access to basic data with their application, with an added community, our customers gain access to customer chat and messaging behaviors to unlock even more insight.

Since users opt-in for community and chat features, our customers have been able to use messaging and chat behavior data to develop narrow customer personas for better and more effective marketing. They’ve also gained greater insight on usage, engagement, transactions and more.

Benefit 5: Reduced marketing costs for new products and services

Companies are always looking for ways to reduce marketing costs, and they’ve found that having a community is helping them get more bang for their marketing buck. For one, they always have the option to market inside their application via chat announcements to their existing community, which is obviously incredibly cost-effective.

With communities, you also have a built-in pool of brand ambassadors, which leads to significant organic growth. Your users will continually spread the word to get others to join, and we don’t have to tell you how powerful word-of-mouth is.

There’s also the ability to create target markets based on your first-party data. Since you can identify your active community users, you can stop casting wide nets for potential leads and start creating lookalike audiences instead, significantly reducing ad spend.  

Getting started with social+

Adding the full technical capabilities for a modern day community of users used to be exceedingly difficult and required a heavy technological lift. It wasn’t that you didn’t know the benefits of in-app communities. It was just easier to allow your communities to build on a third-party platform such as a FB page or Telegram and try to manage them there.

But that’s not the case anymore. Thanks to APIs, in-app communities are more accessible than ever before. Instead of requiring intensive IT resources to build, APIs provide a quick way to integrate community.

Having a social element to your app used to be about giving yourself a little competitive edge. But today, having an engrained community isn’t just a nice bonus. It’s a necessity to protect your startup from being taken over by the big fish.

Sendbird helps you quickly create and implement customized and branded communities with our in-app chat, voice and video call APIs – so you can build stronger connections with your customers.

Categories: Insights, Customers