Earning customers for a lifetime: Why small businesses need user communities in the AI age

Every business—small, medium, or big—wants its customers to stay with them for the long haul. Which is why companies build user communities to bring together their customers under one roof.

In addition to improving engagement and creating a sense of belonging among customers, investing in community building translates to tangible business value. Researchers have shown that there's a direct link between how much a customer engages in firm-operated communities and their social dollars, the additional amount they spend on the business after joining the community.

Yet, for small and medium businesses (SMBs), community ranks low on the priority list. With tight budgets and lean teams, they prefer short-term tactics to keep customers happy—like reward points or seasonal discounts—over the slower work of building a community. Why should small businesses looking at long-term sustainable growth invest in community building? What does it take to nurture a thriving community with minimal resources? And how has the AI boom changed the way communities operate? 

In an interview with The Long Game, Vidya Vasudevan, head of Zoho Community, answers these questions to show how a thriving user community can be an engine that powers both business growth and customer loyalty for SMBs. Below are the edited excerpts from the interview:

Why, in your opinion, should small businesses invest in building a community over things that could give them quick returns? Is it possible to have a community built with limited resources?

A community can become a very organic avenue where all the stakeholders are brought together on a platform. It comprises the business itself, its users, its prospects, its partners and anybody who's enthusiastic about the product or service the business offers. It becomes an ecosystem where businesses don't have to keep introducing themselves, or keep reminding their customers what value they bring to their end customers' business.

Say, I run a business that serves the IT professional services vertical. It would be very useful for my customer who's also in a professional services business, to learn how their peers in the same segment are solving certain business problems without spending too much. Most often, that kind of knowledge is trapped inside the heads of support people. But when this knowledge is made available outside an ecosystem, it becomes many-to-many, not one-to-many. That means, as an expert, it need not be just me sharing my thoughts. You could be another expert, or you could be a rookie who's looking to learn from others. All of us start having very meaningful conversations.

That entire experience can be enriching, and it's organic because it also makes the medium very transparent and credible because you're not hearing just from the vendor. In marketing, what you tell customers is the value you offer them—how something looked very bleak for a business until you happened to them. That kind of talk isn't possible in a community. It keeps the focus on the core problems the user is trying to overcome.

This is why small businesses will benefit if they have community as part of their strategy right from the beginning, and it doesn't cost much to set up. Typically, most communities are forum-driven. It doesn't take much to set one up—there are plenty of open-source options, as well as vendors who offer forum tools at a very nominal charge. And today, with AI, I think anybody can set up and build something.

Perhaps an SMB owner hearing this might turn around and say, "My customers don't care for community. All that's required of me is to build a good product and sell that to customers. And if something goes wrong, I need to set up a good support team to address those problems." If a small business keeps focusing on sales and support without investing in a community, how would that be detrimental in the long run?

Today, unlike a decade ago, customers are very informed. It would be undermining the customer's intelligence if you think it's enough to set up a good sales and support team because people don't just look at what your website says anymore. That could only be the start. After that, everyone needs validation.

Be it a book, a tech stack, or a gadget, customers probably look at 20 options and narrow those down to probably three. Among those three, they'll weigh the pros and cons and that's when they need validation. Somebody has already done the research for them and that somebody is the community. We don't have to do everything alone. And as humans, we don't want to do it alone.

For a business relying on just support and sales, your reach would be limited and you might lose out on potential business. One early-adopter advantage when it comes to community is that you get to build a core group of users. If you treat them well, those core users will walk with you the entire journey and carry your message everywhere. Even if you make a mistake or fail somewhere, they'll work like your extension and pull you up. They'll be extremely critical, but they'll have your back.

Businesses tend to spend so much on marketing to win champions, engineering referrals through testimonials or case studies. With community, that's not how it works. Community by itself is a referral; community by itself is your spokesperson; community by itself becomes your core group of champions. If there are 1,000 members, two or three members who will root for you. You earned it, so you get to keep it. This is why it would be a miss for any business to overlook this.

In a podcast on building user communities, you had mentioned some benefits of having a community—retention, adoption, and deflecting support tickets. From a small business's perspective, which one of these would move the needle first for them if they were to have a thriving community in place?

Today, I think it's ten times more difficult to bring in a new customer than to retain an existing one. You worked hard to earn your customers—you don't want to see them go and churn in a year or two because it's so much more difficult to bring in new customers. What's relatively easier is to retain them.

Community provides the ecosystem where customers are constantly engaged with the brand. That's exactly how retention goes up, because they start adopting your product more deeply for their business. The deeper somebody adopts what you offer, the more returns they get from their investments with you. They know they've unlocked the full potential of your products, which means it's value for money. And they know that if they hit a roadblock, this ecosystem exists to help sort it out so they don't have to write to support immediately.

Once this experience is sorted, customers won't have the bandwidth to start from scratch with another brand. It's draining in terms of resources. People want economy of effort, time, and money. So this works in favor of any business on all these fronts—retention, adoption, and support costs deflection.

Coming to AI, which seems to have changed how entire industries operate, and community building is no exception. Research shows that B2B software buyers now begin their research inside an AI chatbot rather than a search engine, which has led to click-through rates for B2B software queries falling by as much as 30%. When customers form opinions inside an AI conversation which the business never sees, what do you think it does to a community—does it strengthen it, threaten it, or a mix of both?

I wouldn't call it a mix of both. Community is a need on its own, and it's not getting threatened or sidelined. If people instantly need to know something, LLMs are there. But like I mentioned earlier, communities are always there to validate.

Your customers need to feel that they are valued. And they don't feel valued by you giving them t-shirts or mugs or branded caps—people have too many goodies already! Customers like to be told that their knowledge helped you. People like to be acknowledged for their skills, not for other things. They like to be told they're intelligent. They like to be told that their knowledge is helping you shape your product better.

AI will give options and suggestions, but people always want to be validated by a human. That human validation goes a long way in helping you retain customers because, at the end of the day, people don't want to talk to bots, they don't want AI-generated answers. Yes, AI has made lives easier for a lot of businesses, they are less dependent on resources to get something up to speed, to build something and deliver quickly, and all that is happening. But the human touch can never be automated.

So, today, for businesses, both AI and community have to coexist—both are needed. Where speed is of essence, the first level of distilling can happen through AI. But whatever AI gives, you don't know how much of it is hallucinated or whether it's contextual enough.

I think in the tech space, there will be newer ways that'll change the way we work and how we gather information. But there should always be a human quotient to tell customers, "Yes, you're doing it right." Otherwise, it can get very confusing because there are so many options out there. This is especially important for small businesses because with limited time and resources, they can't spend too much time analyzing which is the best way to do something.

Another thing you mentioned in the podcast is the 60/40 equation: that a community is 60% about having people with the right mindset, and only 40% about the tools. But right now, AI can handle a lot of what a small community would need, like drafting responses or monitoring churn risks. In that sense, how has AI made community building easier for small businesses? And which parts of the work do you think simply can't be moved away from a human, no matter how capable the tools get?

For a community to work, tools are just a small part of the challenge. Here at Zoho, we use several of our own tools to run our community. Similarly, businesses can rely on one or more tools based on their need to build and manage a customer community.

Having the right tools certainly matters, but that's actually the easier part of building or nurturing a community. What truly makes a community is human connection, empathy, lived experience, and good judgment.

Human validation is always required, no matter what. Regardless of the business sector, people learn more on the ground, in the trenches. The knowledge and experience gained this way is invaluable, and a community helps amplify the reach of such knowledge and experience. For this reason, communities will always remain relevant.

A community will never put customers down. It will assure them that no matter how basic their question is, it's still important and deserves an answer. That's the value humans bring through a community. So that 60% weightage for people now becomes 80%, and the tool side of things becomes only 20%.

To wrap it up, an SMB owner reading this interview is living in an era where AI is rapidly absorbing more of their business's operational load. What would be the first thing that they should do to start building a community that would still matter a year from now?

Small businesses should first look at setting up an online avenue to get all the customers in one place. Next, they should be clear about the business objectives their community should align to. You can't build a community just because every business wants to build a community. It can't be a marketing channel or a support channel. It also can't be an afterthought. If a business wants to bridge a gap between what they are offering and what their customers are expecting, then community is a great avenue to close that gap.

Also, businesses should think about what is in it for the community? Why should they be a part of it? What value will they offer to the customers and members once they get on board?

When done right, a community talks about the company's culture—the way you treat the community itself will talk about what kind of a company you are. You don't have to tell the world that you're a credible and trustworthy company, that you're open about all your dents and bends. When you have customers reporting flaws, issues, or bugs in your product and it's out there in the open on your community forum, how well you deal with those in a transparent medium will reflect your culture.

And customers will be onboarded to your culture. That is very critical for the long haul. You don't make customers for the short-term. If you have a thriving community, you earn customers for a lifetime.