Community-Driven Business Model

Using sophisticated or obscure terminology to describe genuinely simple concepts is usually perceived negatively. On the other hand, it is often said that presenting a subject in the simplest possible way is actually one of the most difficult things to achieve.

In the case of today’s title — and especially its practical application — the situation is very similar. It is easy to talk about; it is much harder to implement effectively.

The same applies to planning activities. In theory, almost everyone agrees that thinking things through in advance, organizing and structuring a topic properly is extremely important. The problem appears when theory has to be transformed into concrete actions.

As a precaution

To avoid falling into the trap of creative chaos myself, I decided to break down a topic that regularly returns in various discussions into smaller elements. Despite numerous declarations, it is still difficult to see real and long-term results from the solutions being implemented.

Since the automotive industry is a particularly interesting area in the context of this topic — and additionally represents an important part of my professional activity — I will use it as the foundation for further considerations.

Practice

Although the English term Community-Driven Business Model sounds broad and may seem somewhat abstract, in practice it is based on several well-known mechanisms:

• loyalty programs,
• reputation systems and social recognition,
• ambassador programs,
• experiential marketing,
• crowdsourcing and user-generated content,
• community challenges and competitions,
• gamification.

Although these concepts may appear simple to implement, reality is quite different. Effective use of these mechanisms requires appropriate expertise, cooperation between multiple areas of an organization, and above all — time. Not only the time required to launch activities, but also the time needed to consistently maintain them.

Automotive

The automotive industry, and especially the motorcycle sector, provides an almost ideal environment for experimenting with these mechanisms. This is why many brands are trying their hand in this area — with varying degrees of success. Some achieve noticeable results, while others abandon their chosen direction after the initial enthusiasm fades.

A brand that has been supporting sales activities through community building for many years and probably has the greatest experience in this field is Harley-Davidson, together with the Harley Owners Group (HOG).

However, this remains a relatively traditional approach to the subject, and its direct impact on sales performance is difficult to measure conclusively — especially in the case of a brand whose current business situation is much more complex than it was a decade or two ago.

Other leading manufacturers usually limit their activities to organizing events, training sessions, trips, and cooperation with brand ambassadors.

Royal Enfield

The brand I currently work with most closely — Royal Enfield — despite offering motorcycles primarily associated with traditional, and sometimes even classic, approaches to mobility, can boast one of the most consistent and up-to-date approaches to marketing based on communication and cooperation with its community.

Recurring artistic competitions such as Art of Motorcycling, a highly developed motorcycle travel sector, One Ride — a global annual event bringing together Royal Enfield owners around the world, Royal Enfield TV documenting many of these journeys, Custom World — a motorcycle customization program developed together with workshops from around the world and regional brand representatives, REOwn — a solution supporting certification and resale of used Royal Enfield motorcycles, Riders Club — a user community comparable to owner clubs operating within other manufacturers, as well as a mobile application containing social features.

The list of activities engaging both existing customers and people only beginning to explore the brand is so extensive that it could easily serve as the foundation for several independent community programs.

Polish roads

Despite limited human resources and a budget incomparably smaller than that of competitors, the brand’s activities in Poland remain noticeable both among people professionally involved in the motorcycle industry and among motorcycle users themselves.

Recurring events such as Demo Tour, One Ride, the official season opening, community meetings, and support for selected initiatives represent only part of the activities being undertaken.

It is also worth mentioning the recently launched RE.View program — an initiative encouraging the community and people interested in the Royal Enfield offer to share their experiences through social media.

Warning: road bumps ahead

Of course, such a strong focus on activities aimed at existing and potential customers inevitably affects other areas of company operations. In this case, the key issue remains sales.

Although community-building activities undoubtedly influence brand awareness, perception, and consequently also sales, the person responsible for running a dealership and achieving core business objectives should primarily focus on delivering sales targets.

Additionally, community activities largely involve existing customers rather than potential buyers. They also generate additional costs and are often difficult to measure in a clear and objective way.

In the case of Royal Enfield in Poland, the vast majority of locations are operated by a single salesperson. This raises serious questions regarding the ability to effectively conduct activities focused on building a community.

An employee burdened with multiple responsibilities will naturally tend to focus on organizing events for an existing, established group of users. Engaging such a community requires significantly less time than systematically developing it and acquiring new members. From an employer’s perspective, however, the visual outcome may appear very similar.

It is difficult to imagine that, within a traditional business operating model, there would be room for a detailed analysis of community group effectiveness, changes in membership structure, engagement levels, or actual reach.

The 21st century

This issue needs to be addressed directly: the primary goal of community building by dealers is not simply to fulfill internal needs or strengthen social relationships. Its main purpose is to optimize the costs associated with increasing brand awareness, improving brand perception, and ultimately driving sales growth.

Whether these objectives are actually being achieved — and to what extent — is difficult to assess conclusively. What is certain, however, is that as a community grows, so do the time, organizational, and financial resources required to manage it properly.

Most dealers are not so much unable to afford such activities because of a lack of resources, but rather because they simply do not have the organizational structure required to manage them effectively.

Technology may provide an answer to these challenges by taking over a significant part of the burden associated with community management.

It is difficult to ignore the fact that although the automotive industry is inherently connected with technology and continuously evolving product innovation, the internal organization of many companies often remains far behind when it comes to adopting digital tools that simplify operations and enable business scalability.

One could even argue that, from an organizational perspective, parts of the industry have remained somewhere around the turn of the century.

Of course, implementing ICT solutions often encounters serious barriers — organizational, competency-related, and cultural. This does not mean, however, that it is impossible.

At this point, let us temporarily leave aside standard ERP, SCM, TMS, or WMS-class solutions and focus on a somewhat “lighter” area.

The most obvious element in this category is a customer relationship management system — CRM.

Although solutions in this category appear relatively simple both in terms of construction and daily use, after years of testing various platforms I have to admit that it is still difficult to identify a service that is perfectly — or even partially — tailored to the needs of automotive importers and dealers.

And when we add the human factor to the complex network of relationships between CRM systems, sales platforms, marketing tools, and other solutions — including users’ technical skills — it becomes clear that successfully implementing even a basic CRM system requires much more than simply purchasing the right license.

And all of this is still without entering the area of community building and measuring engagement across different audience groups. That stage can still comfortably be described as “rocket science”.

So let us stay with the basics: scheduling dealership visits, efficient customer communication, and one of the biggest challenges in the industry — organizing test rides.

It is difficult to identify a dealer network or automotive brand on the Polish market that handles these processes in a truly satisfactory way.

Although these issues are not directly related to the main topic of this article, understanding the current level of execution of key business processes shows the scale of challenges brands will face when attempting to technically solve the problem of community scalability.

Without ready-made, complementary tools, the industry — speaking colloquially — will not get very far.

This does not mean, however, that the situation cannot change soon. The automotive market has not yet fully recognized the current pace of technological development and will probably be one of the last sectors to do so.

The era of creating solutions designed not only for entire industries, but even for specific organizations, has just arrived.

A community-driven business model — but differently

And this is where the main topic of this article connects again with the earlier, somewhat lengthy breakdown of the problem into smaller and, at times, rather discouraging elements.

It is precisely thanks to ICT technology and its almost overwhelming pace of development that we can now search for relatively inexpensive, fast, and effective solutions to organizational challenges related to building communities and using their potential in key areas of business operations.

Today, combining all previously mentioned elements of community marketing — loyalty programs, reputation systems, ambassador programs, experiential marketing, crowdsourcing, challenges, community competitions, and gamification — is easier than ever before.

In the traditional model, managing activities using even a portion of these mechanisms requires the involvement of an entire team of people and enormous amounts of time dedicated to planning, execution, and measuring results.

Moreover, even with significant effort, outcomes may still fall far short of expectations.

I am not a supporter of excessive theorizing — or at least I would like to think that this is how I approach things — so let us move quickly into practice.

Riders Club App

Looking at the everyday reality of the automotive industry, building and supporting a community most often comes down to organizing group rides — usually with a significantly limited number of participants — rallies, training sessions, and traditional activities based around social media.

In practice, these activities are often limited to encouraging users to comment on publications, share materials prepared by the brand, or — in the least common scenario — create their own content.

The latter model is, of course, the most valuable one, but at the same time it is also the most difficult and expensive to implement. ;)

With such an approach, however, there is very little room for implementing gamification, building reputation systems, or introducing other elements of a community-driven business model — especially if they are expected to operate continuously.

Managing this type of activity using traditional methods is not so much impossible as it is extremely demanding.

It requires appropriate tools, clearly defined objectives, consistency, and motivation. In the reality described earlier, these are often expectations that are difficult to meet.

The combination of challenges related to organically implementing a community-driven model and the extremely rapid development of ICT technology is precisely where the Riders Club application comes into play.

Shifting the responsibility to the community

Organizing a simple event, a short or extended trip, or even an ordinary coffee or beer meeting — obviously non-alcoholic if we are talking about the automotive industry — is not, contrary to appearances, as trivial an activity as it might seem.

In a standard approach, it requires a series of actions that need to be completed for the initiative to be considered commercially justified.

This includes preparing communication, creating tools for collecting data from interested participants, developing graphic and audiovisual materials, maintaining ongoing communication with attendees, answering questions, registering the event, and finally preparing and publishing a report.

Importantly — and although it may sound somewhat harsh — the event report itself is often more valuable from a commercial perspective than the positive experience of the participants.

A lack of awareness regarding the complexity of organizing even a simple trip often leads to results opposite to those intended.

Instead of gaining benefits from supporting community development, the organization only accumulates increasing costs — financial, time-related, and operational.

Due to the nature of event organization and the natural human tendency to avoid additional responsibilities, it is difficult to expect a community to independently take full responsibility for such activities.

People are, of course, social beings. However, in order to take even spontaneous — and even more so coordinated — action, they usually need an impulse, a leader, or appropriate tools.

And this leads to a fundamental question:

Does the driving force behind every action always have to be a person?

What if a community received the right tools, support, and incentives — not necessarily in the traditional, “organic” form?

Instead of a ready-made event — a tool for organizing one.

Instead of the constant presence of an organizer — automation taking over a significant part of the workload.

Instead of a simple encouragement — gamification elements, a social reputation system, and competition mechanisms.

All of this, of course, within a digital environment.

Since people naturally strive to build relationships and create communities, perhaps the role of technology is simply to make this process easier.

Proof of Concept

In the physical world, just as important as the relationships themselves — often temporary and difficult to define — are the concrete tools that allow them to be built and developed.

To verify whether the principle described above actually works in practice, it is necessary to create a solution that meets the key assumptions: allowing the community to take initiative, encouraging activity, rewarding engagement, and automatically distributing the effects of these actions.

In simple terms, we are talking about an application that significantly reduces employees’ responsibility for the everyday operation and development of a community.

Such a tool should enable:

• creating events,
• collecting interested participants,
• rewarding users who perform specific actions — even purely digital ones,
• allowing users to form groups and communities,
• communication between community members,
• automatically distributing the results of community activity beyond the platform itself.

After expanding this concept, many software architects or business architects would probably start feeling uncomfortable.

Just a few years ago, creating such a solution would have required a large team, many months of work, and significant financial investment.

Today, the situation is completely different.

Of course, without experience, appropriate skills, and knowledge of technology, it would be unrealistic to expect rapid success. However, we are not talking about extreme cases, but rather about real possibilities currently available on the market.

Today, a solution fulfilling the assumptions described above — and even going far beyond the standard expectations of an MVP — can be prepared in a matter of dozens of working hours rather than months of work by an entire team.

And the previously mentioned Riders Club application is practical proof of this concept.

I will not, however, go into detailed functional and technological aspects here. It should be emphasized that the current version is not yet a product ready for broad public release, but rather a validation of the concept itself.

Naturally, real-world operation will be a crucial stage of verification. However, in my opinion, an application that simply takes over part of the work currently performed by people still does not fully explore the potential of a community-driven business model.

Community Building System

Since we already know that creating a simple social system enabling event organization, communication, and user communities — including features such as chat, push notifications, and basic engagement mechanisms — is no longer a project requiring enormous resources, one question remains:

Is creating a complete ecosystem that addresses business needs while simultaneously supporting the development of a valuable community through automation already within reach?

This is, of course, not about building a massive software platform designed to replace every system used by a company.

It is rather about creating an integration layer that connects existing solutions and enables efficient communication between individual elements of a larger ecosystem.

Automating test ride registrations.

Transferring data into a simple but business-oriented CRM system.

Encouraging customers to share experiences resulting from their interaction with the brand or product.

Building engagement after purchase.

Rewarding activity.

Motivating users to participate continuously in the life of the community.

On one hand, it sounds like a project for an entire professional lifetime. On the other hand, the current level of technological development means that it is no longer a task as distant and complex as it might initially appear.

However, in order not to drift too far away and attempt to solve every possible problem at once, it is worth returning to the current situation and focusing on tangible examples.

The previously mentioned Riders Club application already enables, among other things:

• organizing events,
• publishing routes,
• internal communication,
• connecting users into regional groups of Royal Enfield owners.

The current website of the Polish distribution network does not provide this type of community functionality — which, incidentally, is nothing unusual. Most official brand websites still operate as closed platforms where information flows almost exclusively in one direction.

This raises an important question:

What prevents official brand websites from being enhanced with selected community features?

Official events could coexist alongside initiatives created organically by users — with the ability to filter and distinguish between the two.

Alongside official brand ambassadors, the most active community members could be highlighted and recognized.

The website could present routes created by users, as well as information about local groups formed by motorcycle enthusiasts themselves.

Implementing such features — even within currently very sterile and closed brand websites — is not a significant technological challenge today.

Especially when solutions already have appropriate APIs and ready-made communication mechanisms.

The bigger barrier appears not to be technology, but mindset.

Breaking existing organizational patterns and convincing companies that a community does not have to be merely a recipient of communication, but can become an active participant in the brand ecosystem.

This is an area interesting and promising enough that it is definitely worth taking on this challenge.

And who should take it on, if not a developer-marketer-excéntric? ;)

Following this way of thinking, the results should not require waiting an eternity.

Stay tuned.