A Superior Business Model
If a company can transition from simply delivering a product to building a community (or better yet be a community-led organization that delivers a product and/or service!), it can unlock extraordinary competitive advantages and both create and support a superior business model.
“When a company is able to make the transition from simply delivering a product to building a community, they unlock an extraordinary amount of competitive advantages.”
Three (Specific) Benefits:
- Enthusiastic members help acquire new members, resulting in lower customer acquisition costs and a tight viral loop.
- Members are loath to abandon the community, resulting in increased retention and therefore improved lifetime value.
- Members support one another, resulting in high gross margins due to a lower cost of service.
The result of this are very real network effects
: as engagement grows, the community gets smarter, faster to respond, more globally available, and generates more value