In the digital age of today, brand communities have become vital when it comes to fostering long-term relationships between brands and their customers. These kinds of communities offer a platform in which like-minded people can share their experiences, create connections beyond the transactional realm, and exchange ideas.
A recurring question does often arise though which is, does every brand community need to be transactional? Do the sales and purchases have to be the driving force behind these kinds of communities? Can they thrive and exist on deeper, non-transactional values?
We will be exploring the significance of both transactional and non-transactional brand communities, their unique benefits, and how the brands can strike the right balance between these approaches.
Understanding Transactional vs. Non-Transactional Communities
It is important to first differentiate between transactional and non-transactional communities to better understand whether a brand community needs to be transactional.
Transactional Brand Communities
Transactional brand communities are communities where the main focus is on sales, purchases, and promotions. The relationship between the brand and its community members revolves around monetary exchanges, and content is typically focused on discounts, deals, product launches, and exclusive offers.
The core aim of transactional brand communities is increasing revenue, encouraging repeat purchases, and driving conversions.
Non-Transactional Brand Communities
When we look at non-transactional communities, we see that they emphasize value beyond products. The connection is based on passions, interests, or shared values, where buying and selling are secondary.
With non-transactional brand communities, the focus lies on building authentic relationships with community members, sharing knowledge, fostering a sense of belonging, and offering support. Brands within these communities tend to focus on advocacy, emotional connections, and loyalty without promoting sales directly.
When Transactional Communities Work Best
Subscription-Based Models
Brands such as ones that offer subscription boxes or streaming services tend to rely on subscriptions and they may find that transactional communities are a useful way to build customer retention. Members within transactional communities tend to expect exclusive membership perks, updates on product enhancements, and new releases.
Having regular updates about new improvements and features is what serves the community's purpose of increasing customer lifetime value and maintaining active subscriptions.
Retail Brands and E-Commerce
Transactional communities can be highly effective for retail brands and e-commerce. These industries thrive on product launches, dynamic sales environments, and frequent promotion.
Within e-commerce and retail brands, customers are looking for limited-time offers, product information, and the latest deals, making a transactional community a natural fit.
A good example would be to look at brands such as Nike or Amazon which often create communities where customers receive notifications about exclusive products, flash sales, and new arrivals. The community members within retail brands and e-commerce engage frequently due to their strong interest in receiving and buying exclusive deals.
Fast-Moving Consumer Goods (FMCG)
When it comes to Fast-Moving Consumer Goods (FMCG), a quick turnover of products requires a steady stream of buyers. In this context, a community designed around regular special offers, purchases, and timely product releases creates a strong transactional focus that can drive sales directly.
The Power of Non-Transactional Communities
Whilst transactional communities work for brands that are focused on immediate conversions, non-transactional communities can offer a deeper impact that is long-lasting.
Both transactional and non-transactional communities have their place, but understanding the need for a transactional focus in every brand community requires a much deeper dive.
Creating Knowledge-Sharing Platforms
If you are looking to offer hubs for knowledge learning and sharing, non-transactional communities are perfect for that as they can become those. For example, Sephora's Beauty Insider community is a platform where beauty enthusiasts come together and share makeup techniques, product tips, and skin care routines. Although Sephora is an e-commerce brand, the focus of the community is not driving purchases but instead, enriching the customer experience. This can help lead to organic brand engagement in which community members naturally move towards Sephora's products due to the value and trust built within their community.
Building Brand Loyalty and Advocacy
Brands that foster deeper and emotional connections with their customers tend to be brands that prioritize relationships over transactions. These communities worry less about buying and more about belonging. Apple is a good example of this, they do not just focus on selling products through their communities but instead foster a culture of creativity, lifestyle, and innovation.
Members of the Apple community feel part of something larger, and this emotional bond translates into word-of-mouth advocacy and brand loyalty.
Fostering Emotional Connections
The relationship with customers goes beyond services and products for some brands. Communities that are based on shared values, whether it is based on social justice, or wellness thrive when they focus on human connection.
Brands such as Patagonia leverage their community to promote sustainability efforts, often aligning their business with the causes the customers care about. In these communities, the driving force is not to make a purchase but instead to make a meaningful impact, which, in turn, will strengthen the brand allegiance.
Tips for Finding the Right Balance
Whilst it may be tempting for brands to push sales through their communities, every community does not need to be just transactional. Most successful communities tend to balance both transactional and non-transactional elements.
Below we give you some tips on how to achieve that balance:
Build Value Before Promoting Products
Regardless of whether your community is transactional or non-transactions, value must always come first. People will be less likely to stay in a community that constantly pushes products out without providing any added value. You should offer something more meaningful whether that be entertainment, expertise, or exclusive content before you start to promote your products.
Blend the Two Models
There are opportunities for soft selling even in non-transactional communities. You can use this opportunity to offer soft selling by using subtle approaches such as reviews from community members, exclusive product previews, or product placement, but you must ensure that the content's value comes first.
For example, a wellness brand could offer a community centred around healthy living whilst occasionally organically introducing other related products rather than being forced.
Know Your Audience Expectations
You must understand your audience, this is key. A more transactional approach may be appropriate if your customers are looking for sales and discounts. If they seek deeper educational content, engagement, or a connection with like-minded individuals, you should consider shifting your focus to non-transactional strategies.
Measure Engagement, Not Just Sales
When looking to gauge the success of a community, brands should track engagement metrics, ones to look at are
Create Sub Communities for Different Goals
A one-size-fits-all community may not be the best approach for larger brands. If you have a larger brand, it is wise to consider creating sub-communities that offer different focuses, for example, you may have one sub-community focused on support and learning and another sub-community focused on exclusive product offers.
By creating sub-communities, you can cater to both transactional and non-transactional needs without alienating the whole group.
Conclusion
In conclusion, every brand does not need to be transactional, whilst some brands thrive on a transactional focus, other brands may see greater long-term benefits by fostering brand loyalty, offering value beyond purchases, and nurturing meaningful relationships.
The key is to understand your audience and align your strategy with the expectations of your audience. Finding the right balance between transactional and non-transactional approaches, your brand and community can support both long and short-term success, be vibrant, and be engaged.
A recurring question does often arise though which is, does every brand community need to be transactional? Do the sales and purchases have to be the driving force behind these kinds of communities? Can they thrive and exist on deeper, non-transactional values?
We will be exploring the significance of both transactional and non-transactional brand communities, their unique benefits, and how the brands can strike the right balance between these approaches.
Understanding Transactional vs. Non-Transactional Communities
It is important to first differentiate between transactional and non-transactional communities to better understand whether a brand community needs to be transactional.
Transactional Brand Communities
Transactional brand communities are communities where the main focus is on sales, purchases, and promotions. The relationship between the brand and its community members revolves around monetary exchanges, and content is typically focused on discounts, deals, product launches, and exclusive offers.
The core aim of transactional brand communities is increasing revenue, encouraging repeat purchases, and driving conversions.
Non-Transactional Brand Communities
When we look at non-transactional communities, we see that they emphasize value beyond products. The connection is based on passions, interests, or shared values, where buying and selling are secondary.
With non-transactional brand communities, the focus lies on building authentic relationships with community members, sharing knowledge, fostering a sense of belonging, and offering support. Brands within these communities tend to focus on advocacy, emotional connections, and loyalty without promoting sales directly.
When Transactional Communities Work Best
Subscription-Based Models
Brands such as ones that offer subscription boxes or streaming services tend to rely on subscriptions and they may find that transactional communities are a useful way to build customer retention. Members within transactional communities tend to expect exclusive membership perks, updates on product enhancements, and new releases.
Having regular updates about new improvements and features is what serves the community's purpose of increasing customer lifetime value and maintaining active subscriptions.
Retail Brands and E-Commerce
Transactional communities can be highly effective for retail brands and e-commerce. These industries thrive on product launches, dynamic sales environments, and frequent promotion.
Within e-commerce and retail brands, customers are looking for limited-time offers, product information, and the latest deals, making a transactional community a natural fit.
A good example would be to look at brands such as Nike or Amazon which often create communities where customers receive notifications about exclusive products, flash sales, and new arrivals. The community members within retail brands and e-commerce engage frequently due to their strong interest in receiving and buying exclusive deals.
Fast-Moving Consumer Goods (FMCG)
When it comes to Fast-Moving Consumer Goods (FMCG), a quick turnover of products requires a steady stream of buyers. In this context, a community designed around regular special offers, purchases, and timely product releases creates a strong transactional focus that can drive sales directly.
The Power of Non-Transactional Communities
Whilst transactional communities work for brands that are focused on immediate conversions, non-transactional communities can offer a deeper impact that is long-lasting.
Both transactional and non-transactional communities have their place, but understanding the need for a transactional focus in every brand community requires a much deeper dive.
Creating Knowledge-Sharing Platforms
If you are looking to offer hubs for knowledge learning and sharing, non-transactional communities are perfect for that as they can become those. For example, Sephora's Beauty Insider community is a platform where beauty enthusiasts come together and share makeup techniques, product tips, and skin care routines. Although Sephora is an e-commerce brand, the focus of the community is not driving purchases but instead, enriching the customer experience. This can help lead to organic brand engagement in which community members naturally move towards Sephora's products due to the value and trust built within their community.
Building Brand Loyalty and Advocacy
Brands that foster deeper and emotional connections with their customers tend to be brands that prioritize relationships over transactions. These communities worry less about buying and more about belonging. Apple is a good example of this, they do not just focus on selling products through their communities but instead foster a culture of creativity, lifestyle, and innovation.
Members of the Apple community feel part of something larger, and this emotional bond translates into word-of-mouth advocacy and brand loyalty.
Fostering Emotional Connections
The relationship with customers goes beyond services and products for some brands. Communities that are based on shared values, whether it is based on social justice, or wellness thrive when they focus on human connection.
Brands such as Patagonia leverage their community to promote sustainability efforts, often aligning their business with the causes the customers care about. In these communities, the driving force is not to make a purchase but instead to make a meaningful impact, which, in turn, will strengthen the brand allegiance.
Tips for Finding the Right Balance
Whilst it may be tempting for brands to push sales through their communities, every community does not need to be just transactional. Most successful communities tend to balance both transactional and non-transactional elements.
Below we give you some tips on how to achieve that balance:
Build Value Before Promoting Products
Regardless of whether your community is transactional or non-transactions, value must always come first. People will be less likely to stay in a community that constantly pushes products out without providing any added value. You should offer something more meaningful whether that be entertainment, expertise, or exclusive content before you start to promote your products.
Blend the Two Models
There are opportunities for soft selling even in non-transactional communities. You can use this opportunity to offer soft selling by using subtle approaches such as reviews from community members, exclusive product previews, or product placement, but you must ensure that the content's value comes first.
For example, a wellness brand could offer a community centred around healthy living whilst occasionally organically introducing other related products rather than being forced.
Know Your Audience Expectations
You must understand your audience, this is key. A more transactional approach may be appropriate if your customers are looking for sales and discounts. If they seek deeper educational content, engagement, or a connection with like-minded individuals, you should consider shifting your focus to non-transactional strategies.
Measure Engagement, Not Just Sales
When looking to gauge the success of a community, brands should track engagement metrics, ones to look at are
- Content sharing
- Community growth
- Active participation
Create Sub Communities for Different Goals
A one-size-fits-all community may not be the best approach for larger brands. If you have a larger brand, it is wise to consider creating sub-communities that offer different focuses, for example, you may have one sub-community focused on support and learning and another sub-community focused on exclusive product offers.
By creating sub-communities, you can cater to both transactional and non-transactional needs without alienating the whole group.
Conclusion
In conclusion, every brand does not need to be transactional, whilst some brands thrive on a transactional focus, other brands may see greater long-term benefits by fostering brand loyalty, offering value beyond purchases, and nurturing meaningful relationships.
The key is to understand your audience and align your strategy with the expectations of your audience. Finding the right balance between transactional and non-transactional approaches, your brand and community can support both long and short-term success, be vibrant, and be engaged.
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