Ugetgoal blog

Communities on social media: for what kinds of businesses are useful

Most businesses don't need to build a community on social media at all. Let's see why.

Ridings et al (2002) define communities as groups of people with common interests and practices that communicate regularly.

Hagel and Armstrong (1997) define communities as a group of people drawn together by an opportunity to share a sense of community with like-minded strangers having common interests.

Whittaker, Issacs, and O’Day (1997) identify the core attributes of communities as:

— a shared goal, interest, need, or activity that is the primary reason for belonging to the community;
— repeated, active participation;
— access to shared resources;
— reciprocity of information, support, and services among members;
— shared context.

So we can see that to be able to name some social media account as a community, followers should:

— have common interests
— communicate with each other regularly (not with the author, but with each other).

Building a community is longer and more expensive than other kinds of social media accounts. Because you need not only grow the audience but also make these people talk with each other. Texting with strangers is insecure, unpredictable, and takes energy and time, so it's not obvious why people should do it. So you have to give your audience a good reason to do this, and it's not so easy. Try to make 10 strangers on the street singing and asking others to sing along. Building a community is like this, but you don't have eye contact and you need to convince 100 times more people at least.

So building a community could be separated into two parts: followers acquisition and creating regular communication between them. The fact you have a community or not affects retention, but usually doesn't affect acquisition. So, first of all, for building a community you must have a good working acquisition process. If you already know how to attract new people and make it cheap, so yes, you can think about community. If not, then forget about community, it's definitely not your topic to focus on.

Second. If you already have a good working acquisition process, to build a community you should calculate your unit economics and see, how the community will increase your costs (it definitely will), and how it will give you more results (it might not happen). In other words, building the community should give you more profit. So we have the main question: how exactly the communication between your followers will increase your profit in dollars?

Third. This community should lead to sales because we're talking about sales through social media. So you should see this connection and clearly understand it. There is a question you can ask: why does the communication of your followers with each other give more value to your product or service?

If you're not sure or don't know the answers to the questions above, so don't build a community. Most likely you will spend huge resources on building the community, but won't get improved results, so your costs become more than your profit. You always can switch to a community when you will realize the exact answers and will be sure your unit economics converges.

1) Armstrong, A. and Hagel III, J. (1996) The real value of on-line communities
2) Hagel, J. and Armstrong, A. (1997) Net Gain: Expanding Markets through Virtual Communities
3) Ridings, C.M., Gefen, D. and Arinze B. (2002) Some antecedents and effects of trust in virtual communities
4) Whittaker, S., Issacs, E., and O’Day, V. (1997) Widening the Net: Workshop report on the theory and practice of physical and network communities
5) Sumeet Gupta, Hee-Woong Kim (2004) Virtual Community: Concepts, Implications, and Future Research Directions; tables fit onto one page