This post was originally posted in Inc.
One of my favorite TV shows ever is the 2000s comedy Community. The show features six-ish community college students who become unlikely friends. I love the program for many reasons. First of all, it’s one of the most meta TV series ever, in that it’s mainly self-referential about TV tropes. And if you know me, I love me some metaphysical / Mehtaphysical stuff.
But I also adore the characters and the “community” they built. As a kid who was pretty lonely growing up, I have always been drawn to the kinship and connection that comes from feeling like you’ve found your tribe.
As a tech CEO who has met people from at least 5000 SaaS companies over the last decade, I find myself reflecting a lot on what is fundamental to a software company. The default answer might be “a product.” But I’d argue that in the last decade, the barrier to entry for SaaS has gotten so low that technology and features are largely commoditized. Check out the G2 grid on any software category (including ours) and you will see many vendors with seemingly-similar features.
In my nearly three decades of SaaS experience, I have come to believe that the biggest differentiator and value proposition of a software company is the community of people who use, improve, and advocate for your product. This is why community-led growth is one of the hottest durable growth strategies in SaaS today.
When you buy a SaaS technology, you are effectively buying into its community of users. You are joining “the club,” so to speak. Salesforce.com is the ultimate example of this. Since nearly everyone in technology has used Salesforce, everyone has an opinion on it! But no matter what you believe, it’s undeniable that the community is massive. When you hire new heads of Sales, they know how to use Salesforce. Sales reps are familiar with it, whether they like it or not. There is a community of hundreds of thousands of certified Salesforce administrators that you can contract or hire at any time. And that community is constantly giving Salesforce feedback to make its products better. What’s more, the community is talking to each other about buying and using Salesforce! A huge part of Salesforce’s value proposition is its community.
So here are six reasons I think community should be a fundamental part of every SaaS product:
A community gives buyers confidence to pull the trigger
Everyone knows that software isn’t about technology—it’s about achieving the outcome the technology promises. And nearly every claimed outcome requires the software AND one or more people to use it.
When buyers (especially senior folks like CEOs and CFOs) consider purchasing new software, the first couple of skeptical questions that come to mind are: “Who has used this? Are other customers ready to vouch for this software?”
In addition to consulting analyst reports, decision-makers often seek to speak candidly with other customers. When they find a vibrant user base (and potentially a fan base!) in your community, it will instill confidence in them to go ahead with the purchase.
A community lowers the total cost of ownership for software
In the same vein, if the “whole product” (to quote Geoffrey Moore) isn’t just the technology but the entire ecosystem required to use the technology, the cost and effort to hire people to use the software is part of its “Total Cost of Ownership (TCO).” So, if it’s hard to find an admin for the product, that increases the TCO. If there’s a ready-made community, costs drop. As simple as that.
If there’s a ready-made population of potential admins or users that are easy to hire, it makes your sale that much easier to close. As an example, we invest time and money in growing the number of professionals in the world that are certified to manage Gainsight. For instance, we tasked our CS Operations and Education leaders with the charter of running our community for CS Operations, to help build more Gainsight Admins in the world. Among other things such as creating a job board and a Gainsight Admin slack group with a careers section, we also launched a program called Gainsight All under our Pulse Impact initiative. The goal of the program is to train new parents returning to work in India on managing Gainsight and thus increasing the talent pool there. As a result of all these efforts, we have radically increased the “supply” of talent and therefore reduced the total cost for our clients.
In that same spirit, if a company doesn’t have a vibrant community, it takes a long time for its clients to source talent. This makes the process of onboarding the software that much more time-consuming.
A community reduces time to value
The road to value can be long for some B2B customers depending on how long it takes to implement the software, how easy or difficult it is for users to onboard, etc.
Having a community significantly reduces time-to-value (TTV) by acting as the central hub of knowledge for documentation, training, and FAQs—essentially everything required for customers to effectively use your product.
A community also acts as a digital extension to your Customer Success and Product teams providing valuable tips and information to new customers. Most importantly, it serves as an easy way to connect with other users while learning to use the product, and share best practices elevating the overall knowledge of all customers.
A community makes your team happier
On the flip side, the existence of a vendor community helps the customer a great deal from an employer’s perspective. Depending on the kind of software, some companies may have only a few people using it. Having a community will help those employees feel camaraderie in connecting with their peers at other clients. In parallel, new hires feel better that the customer bought a software product that has a big community (and therefore big future career projects).
At Gainsight, we see this phenomenon every day. Our Gamechangers Community and our in-person events allow Gainsight Admins to connect as human beings, sharing laughter, frustration, emojis, and GIFs. And very frequently, I’ll hear from a Customer Success leader or Customer Success Manager about joining a new software company and saying “thank goodness they already have Gainsight, so I’m still in the community.”
A community makes your product better
How does a software company get better? I’d posit the only long-term answer is that you have a committed set of clients that make it so. They give you feedback (sometimes nicely, sometimes harshly) on how to improve. And good vendors listen. But without a community, who do you listen to?
We have received and shipped hundreds of product enhancements requested in Gainsight’s Customer Success product based upon the passionate feedback from our Gamechangers Community.
A community helps you build durable growth
Community-led Growth is one of the hottest strategies in SaaS. For many businesses, a key growth strategy is having your customers help you get new ones. This concept has always been around in the form of “customer advocacy.” But recently, it has transformed into something new and more powerful.
Rather than the dated concept of a customer just “doing a case study,” high-growth businesses now create organic communities where clients help each other and, in that authentic process, passionate customers help new prospects understand the value of working with the vendor. Community-based self-service options where customers share information and best practices enable the company to scale more efficiently.
Communities also benefit existing customers by serving as a great source of peer-to-peer knowledge sharing. By reinforcing each other’s decision to buy, communities boost retention and promote upsells.
Today, for Gainsight, a significant portion of our sales come from either repeat purchasers or customer referrals.
Community = Product
Back when Community debuted in 2009, you could say that for many businesses, buying a product was just about buying software. But over the last 15 years, buyers have figured out that the community around a vendor is a huge part of its value proposition. Without a community, a product is simply just another piece of software. It’s always the people who build it and use it that make the software valuable.