The Growth Distillery, in collaboration with Present Company, has released a groundbreaking exploration into the value of communities, finding that they are crucial to long-term business growth.
Lead image: Dan Krigstein, director of The Growth Distillery
Virtuous Value Creation: A Briefing On Community reviewed the gaming sector, an industry made up of businesses seeking connection, meaning, and influence. The study revealed that the gaming sector represents global best practices in cultivating a sense of community with its customers, describing its community as a true asset.
The deep dive examined how a community can be created and measured and found that a healthy community uses a simple value exchange model. To unlock growth, a business contributes to key consumer needs like identity, collaboration, status, access, belonging, rituals and outcomes. In exchange, consumers allow businesses to pursue their objectives like influence, fostering advocacy, product creation, trial, growth, revenue and profits. Both consumer and business benefit from impactful connections, deep dialogue and, ultimately, a two-way relationship.
In order to identify, nurture and capture the value a community generates, the research identified eight community-first principles:
- Experience beats engagement: in an age of media saturation, tangible products and experiences are the most powerful anchors
- Clear and evolving value exchange: powerful communities exhibit a shared expectation of building collective value
- Self-identification is everything: a community is self-aware and will quickly give indications of how they are feeling
- Risk and jeopardy are as powerful as wins: imperfection will be met with forgiveness when the intent is to benefit the group
- You must cede power: companies must provide governance and self-determination options to other community members
- Proxy as a system, not just a structure: supply the community with the flexibility to identify what they believe the value system is, and they’ll develop it accordingly
- Provide a currency, foster an economy: let community members exploit the asset value the community generates to create and justify their own premium
- Play to all sides: no niche is too niche with one customer usually a member of many communities
Director of The Growth Distillery Dan Krigstein said cultivating community represents an exciting new frontier for long-term value creation. “If you want to see what the future holds, look to gaming. This ecosystem has fundamentally changed the way communities can be built, nurtured and virtuously grown”.
“Gaming companies have been amongst the very best at realising the importance of nurturing their communities in not only an authentic way but an altruistic one. They have demonstrated that communities can not only build better experiences but establish new lines of business and grow lifetime customer value through mutual acts of service. This space presents a fundamentally new model of virtuous value creation and a new level of fandom”.
Managing director of Present Company Marty Wirth said community should be seen as a true indicator of the health of a business and its future potential value. “Rather than measure sentiment after the fact, we found that analysis of community and a business’s commitment to virtuous value creation provided leading indicators related to growth and value ahead of strategic decisions. This will provide businesses a new way to prioritise initiatives and ultimately represent a new horizon for growth”.
The Growth Distillery is an independent research think-tank powered by News Corp Australia.
