Does every direct-to-consumer brand need to build a community?
Having a hyper-loyal fan base is great for the bottom line. But does it make sense for every brand to focus its efforts on building a community?
Today, brands don’t just want you to hand over your money — they want you to join their Slack groups, come to their events, give feedback on their products, answer their texts and sign up to their ambassador programs.
There is a business case behind this sudden clinginess. Convincing people to become part of a brand's cult following is great for the bottom line, allowing brands to potentially reduce spending on advertising by letting customers do the word-of-mouth recommendations for them (it’s thought that personal recommendations account for $6 trillion-worth of annual global spending).
As social media ads continue getting more expensive and less reliable (thanks to Apple’s privacy-boosting iOS14.5 update), the advice that every direct-to-consumer brand should “build community” is becoming increasingly appealing.
But do consumers really want to form a deep, meaningful connection with every brand they shop with?
The world of direct-to-consumer brands is not short of examples of founders that have successfully built communities around various psychographics — the term used by marketers to group consumers together by specific sets of shared interests and values.
Sports apparel brand Tracksmith doesn’t just sell shorts and t-shirts, it has created a meeting point for people who belong to what it calls the “Running Class” (people who like running a lot), which involves in-person running clubs, a Slack channel and more. When Glossier launched, the effortless look it championed was perfect for the mingling of empowerment and consumerism popular in feminist discourse at the time, giving those consumers a beauty brand that they could latch onto.
But while it’s not too hard to imagine a running fanatic waxing poetic on how great their $198 membership to Tracksmith’s Hare AC program is, picturing someone who could feel that way for every made-for-Instagram product that’s out on the market these days isn't so easy.
“Not everyone needs to have some amazing online community or an incredibly engaged Instagram following,” says Eamonn Carey, the managing director of Techstars London and an angel investor in several direct-to-consumer brands. “For some brands in some categories, you just want people to click the purchase button.”
Take mattresses. In the U.S., people typically replace their mattresses once every nine years. Even if they really like their mattress, once that purchase has been made there's not really any reason to stay in touch with the brand you bought it from. Direct-to-consumer mattress darling Casper tried many things to continue the relationship with customers — including debuting and discontinuing two sleep-focused magazines, Van Winkle’s and Woolly — but ultimately, consumers weren’t bothered about becoming friends with their mattress supplier.
The pursuit of community can be an easy trap for brands to fall into, particularly with the rise of “community-as-a-service” platforms such as Circle and Geneva, which make it easy to set up such spaces. For some it works — tampon brand August set up a group on Geneva to get input before launching its products — but others may find the conversation never really takes off. The conflation between having a large (but perhaps passive) social media following and a true community of engaged fans can lead to further confusion for brands.
“A lot of brands end up doing themselves a disservice, and alienating their best customers by creating something that goes nowhere,” Carey says.
Tendai Moyo, the cofounder of extensions brand RUKA, says brands that focus on building community where there isn’t one — or perhaps doesn’t need to be one — can serve as a distraction from other important aspects of brand building, such as making improvements to the product itself. “The DTC brands that have been heavily focused on brand and community, and haven’t evolved on their product, are starting to struggle a bit,” she says.
When behind-the-scenes struggles at cookware brand Great Jones (including all six of its employees resigning) were revealed, it raised questions over the tendency for brands to put cultivating a sense of community above all else.
There are a few common tells that indicate whether or not a brand is likely to successfully build a community around them or end up with a manufactured approximation.
The successful ones are those that tap into something that people already identify with. That might mean channeling an activist streak — the fans of tampon brands Ohne and August like their matter-of-fact way of talking about blood and menstrual health — or be selling something that helps people to achieve a personal goal, where it makes sense to seek motivation from others. CBD brand House of Wise, for example, has cultivated an active community of brand ambassadors who want to hit certain financial goals. It could even be as simple as inspiring FOMO and nostalgia, as sunscreen brand Vacation and its parent company Poolsuite do, or cereal brand OffLimits with its online arcade and cereal box toys.
“I don’t think it’s a random grouping of companies that succeed,” says Danny Groner, a marketing director at brand accelerator and incubator Forecast Labs. “Is there room to educate? Is there room to inform, is there room to demystify? Is there room to make people who feel like outsiders in this conversation to feel like insiders? If the answer is yes to any of these questions, then [that brand] should invest in community.”
Since it was founded in October 2020, RUKA has built up a community of 500 co-creators and 40 stylists that regularly provide feedback on products. The brand can answer "yes" to many of those questions, and Moyo says the reason people are so enthusiastic about helping RUKA is precisely because it is solving a real problem.
“For RUKA, these communities existed across YouTube, across [beauty forum] Lipstick Alley, across Facebook,” she says. “You had these communities of Black women exploring their natural hair but were struggling to find a brand that listened to them.”
RUKA’s community has been instrumental in shaping what the brand looks like today, informing which products it should launch — and which need to go back to the drawing board. Moyo says one wig that didn’t go down well ended up being relaunched with the communities feedback taken into account in October — it sold out in two days. “I think they really respected that [we listened],” she says. “It did delay sales in the short-term, but ultimately when you listen to [your community] and validate them, you can only benefit in the long run.”
The value of having a community that’s willing to get stuck in goes beyond selling products to them, though. As an investor, Carey says a brand that has an authentic and engaged community can present a more compelling opportunity. “If you think about the average Series A or B round, half of that money or maybe more is going to go on advertising,” he says. “If I can get that down to 40%, then that’s an additional 10% for a product engineering team. I’m going to be all over that.”
It can also provide other cost savings. Writing in Harvard Business Review, Richard Millington says a client of his community consultancy FeverBee was able to cut customer service costs by 72% thanks to community members answering each other’s questions. Having community members chat about a brand on social media, meanwhile, can make it easier for others to discover.
Clearly then, it can be worth the investment. Brands going big on community often provide incentives — such as discount codes or early access to new product launches — to make sure members stay happy participants. Others host events so the community has the opportunity to meet up with each other, as beauty brand BYBI does with its event the Susty Summit, where customers can meet the founders and quiz them on what products might launch next.
But the ultimate reward of all this investment could be the fact that, eventually, the community may start to sustain itself. RUKA says fans of the brand are already setting up their own Facebook groups. Carey says that while the team at smoothie powder company Kencko, one of his investments, will check in on what’s happening on its Facebook group, mostly people are happy to swap recipe tips among themselves. Peloton now has over 300 Facebook groups, a 165,000-person subreddit and an unofficial podcast that have grown organically.
“It’s a real sense of belonging,” Carey says. “And when people have that sense of belonging, they will become evangelists.”