Sanka Academy

A Beginner’s Guide to Community-Led Growth

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Last Update: May 29, 2023

Hello, community builders 👋

Wanna grow your business? Retain more customers? Reduce cost and improve profitability?

If so, you've come to the right place.

CLG - Community-Led Growth - is a new business practice to achieve these business goals.

In this guide, we'll cover everything about CLG from the basics to the advanced topics.

We hope you'll learn everything you need and apply this new and evolving method to grow your business.

Now let's get started.

What is community-led growth?

Community-led growth - CLG in short - is the practice of growing a business by leveraging the power of community.

If done well, it can turn your customers into advocates, reduce user churns, or increase brand awareness through word of mouth.

CLG requires company-wide alignment across teams—from product to sales to customer support to marketing. Only then you will impact the bottom line (go-to-market, product refinements, cost reduction and more).

Also, CLG can be used by a wide range of companies; any company - from B2C to B2B, startups to enterprises can center their businesses around their communities.

Before moving on to the next section, one quick note: community-led growth isn't identical to the growth of a community itself.

Growing a community is called “community growth”. It is the practice of growing community size to reach the critical mass of its engagement. The goal is not to grow businesses, but to grow communities themselves.

We covered the difference and how to grow a community in this post.

3 Types of Business Growth

There are three main types of business growth: sales-led growth, product-led growth, and community-led growth. Each type of growth has its own advantages and disadvantages, so it’s important to understand all three before making a decision about which one is right for your business.

Sales-led growth

Sales-led growth is when a company grows led by sales efforts (and in many cases marketing). Many B2B companies have taken this approach by hiring a team of sales reps and acquiring customers through sales and marketing.

Sales-led growth is often the fastest way to grow a business, as it doesn’t require much in the way of upfront investment. However, it can be difficult to sustain in the long term if sales don’t continue to increase at a similar rate.

If you’re thinking about pursuing sales-led growth for your business, make sure you have a solid plan in place for how you’re going to generate more sales. Otherwise, you could find yourself in a situation where growth stalls and your business starts to decline.

Product-led growth

Product-led growth is all about driving growth through the product. The main goal is to get people to use the product and keep them coming back without much of intervention by sales. This usually means having a great product that’s easy to use and provides value to the customer.

As today’s customers become more and more sophisticated, many new startups have adopted this method. Slack, Atlassian, among others have boasted how few they hire salespeople and reduce customer acquisition costs.

There are a few different ways to go about product-led growth. One is to focus on building a great product and then marketing it to the right people. Another is to grow through virality, meaning getting people to share the product with their friends and family.

No matter which method you choose, the key is to always keep your eye on the quality of the product.

community-led growth

As we’ve seen there are many different types of business growth, but one of the most exciting and rewarding is community-led growth (clearly we’re biased though).

This type of growth is driven by communities around businesses; they’re passionate about your products and services, and willing to be advocates for the brand. Product development can be a collaborative effort between the business and the community.

The benefits of community-led growth are numerous. For businesses, it can mean increased brand awareness, clients, and customer loyalty.

It can also lead to lowered operating costs, as businesses take advantage of shared resources.

Community-led growth is a new and sustainable way to grow a business and improve a community. It’s good for everyone involved, and it’s something we should all strive for.

Community Management Flywheel: The AME model

If you want to grow your business by leveraging your community, you need to build a robust flywheel to run your community from engineering to analytics to membership and to engagement.

Only with a proper system in place, you can measure community values and keep community engaged.

In the following sections we’ll take a deeper look at each topic.

Analytics

Community growth is all about a process. And the process starts with ideation.

This process uses data, hypotheses, and analytics to come up with execution plans to grow your community.

In order to get ideas around growth executions, first, you need to identify areas of potential improvement: Is it the onboarding funnel? referral rates? engagement? the size?

Then use analytics tools like Sanka to get the necessary data points.

The following are questions that help you think through them.

  • Awareness: how much reach does your community have? Is it enough?
  • Onboarding: what’s the rate of new members from joining to engaging?
  • Engagement: what’s the rate of members joining your events? interacting with your content?
  • Retention: how many members stay after a certain period of time?
  • ROI: Does your community generate more profit over investment?

After identifying areas of improvement and getting data points to back them up, you need to prioritize what to work on.

Create a framework for ranking and sorting execution ideas you generated during the ideation phase, and prioritize what to work on.

The rule of thumb is to work on lower-hanging fruits (quick fixes) and then gradually move on to long-term projects. Always keep your north-star metrics (such as ROI and LTV of your community members) to make these decisions.

Log these items and review priorities on at least a bi-weekly basis.

It is important to analyze the results of growth executions and learn from them. Also, share the insights with your team to brainstorm what to do next as a group. This helps guide you toward a comprehensive understanding of your community.

Always use data to discuss to remove subjective judgments and to avoid hierarchical decision-making as much as possible.

Engagement

As you might have guessed, analytics alone doesn’t grow your community.

You need to put in the time and effort to ensure that executions follow, and then you need to continue to run it.

Here are some of the community growth executions.

  • Community support: As a community manager, you need to monitor the conversations of members and make sure their voices are heard. Sometimes you need to chime in and moderate the conversation.
  • Content: Content is your superpower when it comes to community engagement so create engaging content regularly. It’s also important to hear from members to understand what kind of content is demanded.
  • Community partnerships: Sometimes working with other communities gives you and your audience a new perspective. Cross-promotion and co-marketing are also effective ways to attract a new set of groups to your community. If you have a network, you can work with influencers to bring them to your events, which could make your community excited.
  • Contests: Community contests are a great way to get people involved in the community. Be it photo submissions or quiz competitions, they can help with everything from gathering new ideas to getting feedback on your current projects. Community contests also help to build morale and bring people together.
  • Giveaways: Giving away prizes is a fun way to activate your community. By offering something of value, you can entice people to join your community or connect with other members. Not only will this help you attract new members, but it will also show your existing members that you are committed to making the community a success.
  • PR: There are many ways to grow a community, but one of the most important is through public relations. By fostering good relationships with the media - whether local or global - you can create a buzz about your community that will attract new members.
  • Events: By bringing people together for a common interest at events, you can create a strong bond between members. This can help to build trust and cooperation, which are essential for any community. Additionally, you can form rituals around events that help to create an experience only your community can deliver.
  • Paid Campaigns and Advertising: Lastly, paid campaigns and advertising have been effective tools for community growth. A good thing about running ads for your community is that ad targeting is a lot easier because you have audience profiles already. We don’t recommend paid growth unless you have an aggressive target, but if you want to grow quicker than organic growth, you might want to consider this path (and of course, as long as your budget allows it).

Community Engineering

We empower organizations to effectively integrate their data, strategies, and operations with their communities through software engineering.

Today, most communities are based on multiple platforms, i.e. their communication and interactions are all over the place - Twitter, Discord, newsletters, closed platforms, and more.

This transformation has forced many community managers to be savvy about their operations, and there’s a huge technical demand from them to integrate, develop, and automate their community workflows.

Growth engineering is the process of enhancing community operations through technical approaches such as integrations, automation, and custom development.

It's often seen as a scalability solution for communities. This is because it enables communities to be multi-platform while keeping the workload the same (or even smaller).

Community engineers typically work with community managers to understand the project scope and work on a project-basis; for example, "generating automated reports on a daily basis for a Facebook group".

They can help you not only community operations but community growth as well, for example automating and scaling communication.

Most communities at a certain scale (usually 100 members or more) start looking for community engineering and their expertise to solve technical challenges.

Last but not least, don’t forget that every community is different. There is no one-size-fits-all community engineering solution. You have to experiment and find what works for your specific case.

Wrap-up and next action

You've now completed the community growth guide.

But wait, there's one more important thing to do before you can consider your work done.

Let’s wrap up your learning by taking a moment to think about whether your community needs growth or not. Again, growth is optional because every community has different challenges.

But if your community needs to grow, then you know where to start (remember the ideation, prioritization, execution, and learning steps).

Be sure to loop in your other teammates too, so you can approach growth as a group.

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