Why the ROI of building an in-app community is undeniably positive (full guide + stats)

Communities are the secret behind the growing success of many brands, and there are plenty of statistics and case studies to prove it. Look at Starbucks, for example. They don’t merely sell coffee, but a whole community experience, offering a comfortable space between home and work.

Through engaging and nurturing these communities, brands get the chance to unlock a generous return on investment. You’d be hard-pressed to find any industry where the influence isn’t positive.

Communities create advocates, boost loyalty, foster innovation, and engage directly with the consumers who love their products. And connection is shown to be key – a study by Sprout Social found that 76% of customers say they would buy from a brand they feel connected to over a competitor.

By building an in app community with the help of social features, companies boost retention by 40%, increase engagement by 35%, accelerate growth by 30%, and increase revenues by 2.8x!

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In this post, we’ll talk about the many potential benefits of in-app communities. We’ve got over 50 case studies and stats to share, all showcasing the immense impact of online communities for brands.

1. Boosting user stickiness

An app that feels like home is certainly appealing to users. Consider a scenario where your users don’t just scroll mindlessly through your app but genuinely, deeply engage with it. They feel as though your app speaks their language, knows their likes and dislikes, and – best of all – listens to them. 

With nearly half of apps uninstalled within the first month, the level of engagement can be a real difference-maker, turning passive users into active, engaged user bases.

So, how do in-app communities do this?

• Fires up user interaction: An in-app community offers a place for users to express, explore, and exchange ideas, much like a social hive that encourages users to spend more time on your app.
• Boosts user retention: When a community fosters a sense of belonging, users start to use your app not just for its utility but for the connection they feel towards it and its members.
• Reduces app churn: As your app slowly becomes a virtual home for your users, it reduces the chances of users going elsewhere or uninstalling the app.
• Enhances personalization: In-app communities allow companies to tailor the user experience to provide relevant content and recommendations based on preferences and behavior. In turn, users become more engaged and stick around for a lot longer.

Stats you need to know:

• Nearly 4 out of every 5 internet surfers are active in an online community. 
• One of our clients at Amity noticed something fascinating: users interacting with social features showed a retention rate that was 26% higher than those who didn't, and this trend sustained for over three months.
• That's not all - the same client saw the average app sessions per user skyrocket by 500% within half a year, jumping from just three times per month to twenty.
• Two-thirds of companies with branded communities have seen their customer retention positively influenced by them. Not just that, but nearly seven out of ten claims it helped reel in new leads while more than half witnessed a boost in sales.
• Personalization is key, too. Customers tend to splurge about 46% more when they feel personally engaged.
• Happy customers love sharing good experiences! Statistics reveal that around 72% will spread their positive experience with as many as eleven other people.
• Regular engagement is crucial for apps. A staggering nine out of ten users stay active if they engage with an app weekly.
• However, almost half the apps downloaded get ditched within one month due to lackluster usage. This underlines how vital it is to keep your users hooked through social features.

2. Creating magnetic user experiences

Within the sea of apps out there, an app is classified as a standout app when it goes past its basic features and functions and provides a one-of-a-kind user experience. 

Forrester reports that every $1 invested in UX results in an ROI of 9,900%. Weaving in an in-app community will help morph your app into a vibrant social hub that brings users back time and time again.

Here are some ways in-app communities can enhance user experiences:

• Relevant content discovery: In-app communities help curate content based on preferences, shared interests, and user behavior. Users can easily discover things that they enjoy and can relate to.
• Integrated community: Where convenience meets community; your app becomes the perfect solution. Users won’t have to juggle between multiple apps to connect and engage – your in-app community has everything they need in one place, boosting time spent on the platform.
• Intrinsic motivation: There are plenty of motivational factors to use the app, whether it's to share, learn, contribute, or just engage. This community charm is what keeps users engaged.

Stats you need to know:

• Investing in user experience (UX) packs a powerful punch. According to Forrester, every dollar invested in UX can yield a $100 return – that's a 9,900% ROI.
• Good mobile UX is like a magnet. It attracts around 74% of visitors back to your site.
• On the flip side, poor UX drives customers away. A staggering 88% of consumers are less likely to revisit a website if they've had an unpleasant experience there.
• When it comes to shopping on smartphones, great user experiences keep users coming back for more: about 90% say they're more inclined to continue shopping with this kind of positive interaction.
• But beware: over half the people claim that a lousy mobile encounter makes them lose faith in the company entirely.
• Listening and adapting pays off. ESPN.com saw its revenues leap by an impressive 35% when it incorporated suggestions from its community into the homepage redesign.

3. Organic word-of-mouth referrals

Have you ever tried out a new product, eaten at a new restaurant, or started going to a certain store because your friend started recommending it to everyone? That’s the power of word-of-mouth referrals – marketing that results in five times more sales than paid ads. 

Strong and engaged in-app communities are able to organically gather these referrals, which is a crucial asset for positive ROI. There are a few ways in which they do this:

• Foster trust and credibility: Personal recommendations are much different than recommendations from a celebrity or public figure. It carries a certain warmth of trust and credibility that encourages others to explore what you’re excited about.
• Fuel viral marketing: In-app communities that are consistent and active are catalysts for viral marketing. Word online tends to spread rapidly, which helps with organic reach.
• Create brand advocates: Users who are passionate about their in-app communities will naturally promote the app within their personal network, putting your brand in a positive light.
• Help with user growth: Each word-of-mouth referral will inspire new users to join the app, which gets you growth without having to depend on other methods of advertising.

Stats you need to know:

• Word-of-mouth is a powerful sales driver, accounting for 13% of all sales and fueling $6 trillion in global spending every year.
• It even outperforms paid ads by making five times more sales – talk about the power of a good chat.
• A significant 74% of consumers admit that word-of-mouth plays a crucial role when they're deciding what to buy.
• If your app sticks with users, they'll do the talking for you. An overwhelming 92% of consumers value word-of-mouth recommendations over any advertisement you could pitch their way.
• More than two-thirds (68%) trust online feedback from other customers (as per Nielsen).
• What's more? Around 72% confess that reading positive customer reviews boosts their trust in a business. On average, it only takes between 2 to 6 reviews to convince about 56% of them (courtesy: BrightLocal).

4. Saving big on marketing and customer acquisition

While in-app communities bring in numerous benefits, like better user experiences and organic referrals, they also  contribute to significant savings that amplify ROI. 

As smartphone users are ad-resistant and are spoiled with choice, these communities can cut down on marketing queues and customer acquisition costs through great customer support, targeted advertising, referral programs, and user-generated content, to name a few.

Here’s how this all unfolds.

Marketing

• Spurs organic content: In-app communities encourage user-generated content, which provides fresh content for promotions. Your brand becomes relevant and user-centric, all while reducing your reliance on paid content creation.
• Longer customer lifecycles: So long as your community stays active, users will stay loyal, reducing the need for re-engaging or acquiring users.
• Better targeting and personalization: Strategies are better aimed thanks to market research within the community. This results in deeper understanding of user behavior and preferences, which means higher conversion rates at lower spends.

Stats you need to know:

• Inversoft's research indicates a striking 77% of companies feel that online communities significantly boost their brand's exposure, credibility, and awareness.
• Marketers leveraging online communities in their multi-channel and multi-touch marketing strategies experience an impressive 31% higher return on marketing investments (ROMI) than those who don't – 47% versus just 36%. 

• Ever wondered how much sway online communities hold over purchasing decisions? About a quarter of customers admit to using them while considering buying a product or service online. 
• Brands are also recognizing the power of community: another 77% believe that fostering these digital spaces can enhance their marketing efforts toward current and prospective clientele.
• The benefits extend beyond just marketing. Nine out of ten professionals say they use suggestions from their community to upgrade products or services. Moreover, for around four-fifths of them, these communities have served as fertile grounds for developing new products or services.
• For yet another significant chunk (77%), harnessing the potential of online communities has proven instrumental in improving their marketing game.

Customer acquisition costs (CAC)

• Positive reviews and ratings: When community users are happy, they’re likely to leave favorable reviews and high ratings. These act as a type of word-of-mouth marketing, attracting new users without having to invest more into your marketing efforts.
• Lower cost per acquisition: Given the combination of organic growth and extended customer lifecycles, the overall cost to get customers to your app goes down. ROI is pushed in a positive direction, giving your app more financial stability.

Stats you need to know:

• The onset of COVID-19 saw customer acquisition costs (CAC) climb by a significant 20%. 
• Since the pandemic, digital interactions have become twice as valuable to customers as they were before. 
• Online communities are truly game-changers. In fact, two-thirds of professionals believe their online community has given a solid boost to customer retention.
• Communities also create new opportunities – 68% claim it helped them reel in fresh leads.
• More than half credit their community for an uptick in sales. 
• Interestingly, almost half the companies prioritize acquiring new customers over keeping existing ones satisfied and engaged.
• Nearly nine out of ten businesses rely on their website as the primary tool for drawing in customers.
• A whopping 80% of brands view technology as an essential ally to enhance customer acquisition. 

5. Trim support costs

Customer support doesn’t need to be confined to support tickets and long waiting hours. While there are emerging technologies, such as chatbots, that make things progressively more effective, FeverBee states that it's 72% cheaper to answer a question via the community than through support.

Here’s how an in-app community can help your support team minimize costs and maximize ROI:

• Leveraging peer-to-peer support: In-app communities are environments where members can help each other get quick answers to simple questions, reducing the workload on your support team.
• Creating a knowledge base: Over time, the community becomes self-sustaining – new members can easily find solutions to their issues from previous discussions, which prevents repetition.
• Product feedback loop: With direct access to user conversations and feedback, the support team can proactively address issues rather than reactively.
• Preventing public complaints: With the community as the first point of contact for user issues, they’ll be less likely to escalate to public complaints on external platforms.

Stats you need to know:

• Companies that embrace an online community platform are leaps and bounds ahead in customer service. They've seen a 9.6% annual decrease in their customer effort score, compared to just 0.8% by others who don't have such a platform.
• FeverBee research has revealed something intriguing – answering queries via the community is 72% cheaper than doing so through support channels.
• Harvard research found that when search engines excluded community content from their results, visitor numbers plummeted by an average of 83%. This led to many people resorting to other support channels, causing ticket volumes to surge by nearly 58%. 
• Online communities aren't just for socializing; they're crucial for customer service, too. A surprising statistic shows that almost six out of ten organizations use them for providing customer support.

6. Direct revenue generation

There’s a lot of discussion around passive revenue generation, but what about direct revenue generation? Research shows users spend 19% more with a company after joining its online community. In-app communities can use certain tactics to drive positive ROI – let’s examine these strategies:

• Promotes in-app purchases: A strong community can encourage users to explore premium features or additional in-app purchases.
• Monetizes user-created content: Courses, tutorials, or marketplace items can all be monetized as an additional revenue source.
• Attracts sponsors and advertisers: Thriving communities appeal to advertisers and sponsors, and they’ll likely see value in including their brand in your app’s ecosystem.
• Membership and subscription fees: Offering premium community features under a subscription model can form a steady revenue flow.

Stats you need to know:

• In a recent survey, participants revealed that their branded online community influences over 30% of their organization's total revenue. Quite the impact!
• Once a customer joins a company's online community, they tend to splurge 19% more with the company.
• The livestream shopping trend is sweeping China. According to a 2020 poll, two-thirds of Chinese consumers said they had purchased products via livestream within the past year.
• Social-commerce channels were hotspots in 2021, boasting $37 billion in purchases. By 2025, this figure is estimated to nearly double and reach an astonishing $80 billion, accounting for about 5 percent of total US e-commerce.
• Forrester's retail survey in 2021 found something rather interesting: 61% of American adults under age twenty-five completed purchases on social and creator platforms without ever leaving the website or app.
• While social commerce has been relatively new in Western countries compared to Asia, it is picking up fast. Between now and 2025, transaction volumes are set for rapid growth – by around one-third in the U.S., and one-quarter across Europe. Globally speaking, it could account for as much as sixteen percent of all e-commerce sales by then.
• Finally, there’s live streaming – approximately four out of ten global shoppers (and just over one-quarter of European ones) would like it paired with immersive shopping experiences.

7. Brand loyalty: Lessons from top global community-led companies

One of the more commonly known secrets to doing well in the marketplace lies in the power of brand loyalty. It’s one of the most effective ways of turning customers into supporters, believers, and advocates of your brand. 

Many community-led companies have mastered this art through exclusive rewards and personalized experiences, such as the ones below:

Harley-Davidson: This legendary motorcycle manufacturer has its roots deeply entwined with community-centric values. Harley-Davidson's community of motorcycle enthusiasts, HOG (Harley Owners Group), stands as a strong representation of customer loyalty, with members united by shared experiences, adventures, and the passion for unrivaled motorcycling experiences.

Apple: Having an Apple product seems to come with a sense of belonging. The high-tech giant has created more than just products – they've built an ecosystem where users share, learn, and thrive. They’re best known for their emotional marketing campaigns and emphasis on customer service.

Sephora: Sephora's 'Beauty Insider’ loyalty program lets customers earn points for their purchases, which can be redeemed for beauty products or experiences. As well, their online community space is a vibrant space for shoppers to connect, share advice, and review products.

Patagonia: Outdoor apparel brand Patagonia has mastered using a community to strengthen its commitment to environmental sustainability. The 'Action Works' platform is a community bound by a shared love for nature and conservation. Patagonia has propelled itself as a socially responsible brand but also created a loyal community that aligns with these values.

Social features: The key to thriving in-app communities

Building a lively in-app community can be compared to baking the perfect cake; a handful of essential ingredients, when combined can produce exceptional results. The essential ingredients here are an engaging set of social features – smaller cogs in the larger community machine. 

Are you ready to start building your own in-app community? Here are a few features that could serve as useful tools:

• User profiles: To feel a sense of belonging to a community, users need a face – or rather, a profile. Personalized user profiles give them a unique identity.
• News feed: This classic feature keeps your users updated with the latest happenings, recent posts, or trending topics in the community. It keeps engagement fresh and continuous.
• Video features: The modern web thrives on video-centric experiences. Adding video elements like live streams provides real-time interaction, sparking excitement; features like short-form videos make for easily digestible, share-worthy content, and live commerce can add another layer of interaction and have the potential to generate direct revenue. Edit videos to tailor your content and amplify its impact, ensuring your audience enjoys a personalized viewing experience that captivates them and encourages return visits.‍
• In-app messaging: Built-in app messaging is a user’s direct channel for communication – for users to chat privately or in groups to foster conversations and build relationships.‍
• Groups and forums: Creating dedicated spaces for specialized discussion goes a long way toward meaningful interaction. Using groups or forums within your app lets users get together based on shared interests or objectives. It’s where they can dive deeper into specific topics, share detailed insights, and enjoy shared experiences. Users feel a sense of belonging as they find their niche group within the larger community, leading to deeper loyalty and stronger retention.

By building an in app community with the help of social features, companies:

• Boost retention by 40%
• Increase engagement by 35%
• Accelerate growth by 30%
• Increase revenues by 2.8x
• Boost of avg. revenue per user (ARPU) by 2.2x
• Improve user experience by 4x

Conclusion

The real charm about communities is that these rewards aren’t confined to a specific industry – no industry is left untouched by the charm of in-app communities and the chemistry behind their ROI. By fostering communities, you aren’t  just building a user base but connections comparable to a 'family' that grows, collaborates, and perseveres as a collective. 

Integrating social and interactive features into your app will help to seamlessly combine engagement, loyalty, savings, and revenue. Every community conversation is an opportunity for your business to tap into and let your brand flourish with a thriving, engaged, and profitable in-app community.