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Community-led growth (CLG) has become a much talked about approach for brands seeking to grow their business without embarking on the never ending money pit of paid advertisement.

In theory, CLG enables brands to form deep relationships with customers and empower them to engage and support one other in a self-sustaining ecosystem.

At its core, community-led growth centers on creating a branded community that fosters a sense of belonging, along with shared values and vision. When done right, CLG lowers customer acquisition costs, increases customer retention, and drives brand advocacy.

Throughout this article, I’ll examine what community-led growth is, why it matters now more than ever, and how to implement it successfully.

Defining community-led growth

Community-led growth is built around customer centricity, empowering customers to drive a brand forward. Core tenets of CLG include: 

Feedback: CLG prioritizes customer feedback and customer co-creation, allowing customers to voice their opinions, ideas, and concerns—shaping product, brand, and marketing decisions. 

Many-to-Many: Unlike social media and email marketing that rely primarily on interactions between brands and consumers, CLG fosters relationships between community members. Community members support one other, create content, and develop a shared identity. 

Advocacy: Successful communities empower their members to share brand experiences and promote a brand—offering invaluable social proof. Advocacy can take many forms, including product reviews, social media posts, and blog posts. 

The reason why CLG is confusing is because it’s not a specific action or product you can buy, it’s a philosophy… an approach to growth.

Lululemon Studio Tour from Lululemon

Why does community-led growth matter?

For much of the 2010s, e-commerce brands followed a similar growth playbook. Acquire customers cheaply. Capitalize on organic social reach. Placate customers with deals and discounts. And send promotional emails and SMS.

But in the last couple of years acquisition costs have skyrocketed. Social reach has plummeted. And conversion on email and SMS is down. Consumer expectations have also shifted. Many customers today expect to develop deeper relationships with brands, and they want a seat at the table where their voice is heard. 

CLG can solve these challenges in several ways: 

• Customer feedback: customers provide feedback on products, services, or marketing campaigns.

• Customer support: community members support one another, which can reduce the workload of the company's support team.

• Loyalty and retention: customers who are part of a branded community are more likely to remain loyal to the brand.

• Brand Advocacy: community members are more likely to share positive experiences with others.

Several companies have achieved significant growth through community-led initiatives. Peloton, for instance, has become a leading fitness brand thanks to its community-led approach, where members bond over shared workouts and encourage one another to achieve fitness goals. The Sephora Beauty Insiders have also helped review and find the best products since 2017. And Lululemon’s membership program, which offers exclusive digital content, experiences, and rewards (at both free and paid tiers) has become the prototype of successful community-based initiative for many brands. 

Challenges of community-led growth

CLG is a cost-effective growth channel but is not without its challenges. For example, brands may struggle identifying the best tools to manage communities, and managing multiple tools may feel clunky. Knowing where to start and how to execute a program with limited resources is also a common constraint. However, there are simple strategies to mitigate these challenges. Companies can start small by building a core group of engaged customers and gradually scale up community-led efforts. 

Heart Collection Launch Party from Mejuri

How to implement community-led growth?

A few simple steps will have you well on your way to successfully implementing CLG:

1. Identify the target audience and create a community around their needs.

2. Encourage two-way communication and engagement.

3. Create simple ways to provide value to community members.

4. Reward community members for their contributions.

5. Monitor and track engagement.

To continue engaging and empowering brand communities, be transparent, respond to feedback quickly, and foster a sense of belonging. 

And brands in virtually every category can build community, even if that community is not directly tied to product. For example, many athleisure brands build communities around fitness, exercise, or running. A beauty brand may build a community around mental health Even a brand in a commoditized space can find like minded individuals passionate about topics related to a brand. For example, a lumber brand could create a community around sustainability. 

Build customer loyalty, increase engagement, and drive business success with community-led growth

Community-led growth is a powerful approach for brands seeking to build a loyal customer base. By fostering a sense of kinship and empowering customers to support each other, businesses can improve satisfaction, drive customer loyalty, reduce acquisition costs, and build a powerful word-of-mouth marketing channel. 

While there are challenges to implementing any growth strategy, the benefits make it a worthwhile and cost-effective investment for brands seeking to stand out in today's crowded marketplace. With the right tools and strategies, companies can successfully implement CLG and reap its benefits.

Ethan

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