Redefining B2B Marketing: The Rise of Brand Communities with Mark Schaefer

TRANSCRIPT

Michelle J Raymond: [00:00:00] Welcome everybody to the LinkedIn for B2B Growth Show I'm your host, Michelle J Raymond and I this week am joined by the wonderful Mark Schaefer. Thank you for coming on the show, Mark. Welcome.

Mark Schaefer: Thank you, Michelle. I'm so glad to be here 'cause we had a couple reschedulings and we finally connected our time zones and here we are.

Michelle J Raymond: I know it's just amazing, the opposite sides of the world. Now, your new book, Belonging to the Brand, Why Community is the Last Great Marketing Strategy. I recently finished that one and I just thought it was brilliant and had to have you on the show.

Mark Schaefer: Thank you.

Michelle J Raymond: But before we dive into all of my questions about that, I have a question for you.

How did you get started on LinkedIn? What was your journey like in the beginning?

Mark Schaefer: I'll tell you Michelle. When I started my business, I started, blogging and I started, putting some of my content, some of my ideas on LinkedIn, and after a few months I was realising that every essential contact for my business was coming through LinkedIn.[00:01:00] Collaborators, customers, partners, people who were creating new opportunities for me.

And it took me about six months to figure out I really needed to double down on LinkedIn. And then about five years ago, I decided I better triple down on LinkedIn. Yeah, LinkedIn is definitely my social media channel drug of choice.

Michelle J Raymond: Mine too. And we're gonna talk about my next favourite thing about socials and that is building communities.

And I think I was drawn to your book because I love the whole idea that it's not every man for themselves. If it can outperform the rise of the influencer, I'm all for it. But you're, you're a bit of a futurist as it says in your title, but tell me, why are we talking about brand communities now? Why do you think this is the time for them to shine?

Mark Schaefer: The idea of being a futurist is something I adopted reluctantly, you know, because it seems like that's something someone else should call you. [00:02:00] But so many people were calling me that and saying, you know, you idiot, why don't you call yourself that?

And to me, Michelle, it's not that hard. You look at what is going on in the world and you think through the implications. If we know this is happening and this is going to be sustained, what happens? How do these trends all come together? And that really was the genesis for this book. I see three big trends coming together.

The first one I wrote about extensively in my book Marketing Rebellion. It's about marketing just doesn't work like it used to. There's changes in technology, there's changes in demographics, there's changes in consumer behaviour.

And when our customers have the accumulated knowledge of the human race in the palm of their hand, they expect something different, something better from our companies and from marketers instead of being intercepted and being spammed and being annoyed.[00:03:00]

So that's point number one, is we need new marketing ideas. We need a new way to connect in a meaningful way with our customers.

Number two. I don't know how it's looking for you in Australia, but here in America, there are elements of the mental health crisis in the news every day, every day. And several years ago, I saw this headline in the New York Times that said the loneliest generation. It's talking about our children and our teenagers. How isolated, how lonely, how depressed. Record levels of depression and mental illness and even self-harm.

And it's just in the news every day. It wasn't caused by the pandemic, it wasn't caused by social media or video games. This has been creeping up in our society for decades. Pandemic, social media really amplifies a lot of the problems, [00:04:00] but it's complicated.

But there's this mental health issue where our customers are longing to belong. We need to belong, psychologically, sociologically, even physically, we need to belong. So this idea of community, it's really relevant now.

The third trend, the third and final trend is all the money that's being poured into new ways to connect. New ways to belong, and we hear these very confusing terms like NFTs and Web three and Metaverse, and I don't think anybody really has a good explanation of what Web three is, but we don't need to know because these are all technologies that help people connect and belong in new ways.

There's a case study in the book of a guy that created one of the fastest growing communities I've ever seen, all based on NFTs. Young people today are [00:05:00] swarming into the metaverse.

If you've heard of the game Fortnite, that's the metaverse. There's people, they're in there, they're collaborating, they're buying things, they're watching concerts in Fortnite. So the Metaverse is here.

So these three things, we've gotta have a new way to connect. People want to connect, through community, and there's lots of technology at our disposal now to help us do that.

And that all pointed to me that this is the time, and I'm not a bragging person, but I will have one little mic drop moment, in that I think I mentioned this in the book, that the day I wrote the last words of the book, the manuscript was done. McKinsey came out with a major research report that said community is the next big thing in marketing.

So boom. Nailed it. Mic drop. I'm confident that I'm right that this is the right time for community.

Michelle J Raymond: That's really amazing. I wrote a book [00:06:00] called the LinkedIn Branding Book with a friend of mine, Michelle Griffin, who's in Florida, and we wrote that and it launched last year. And one of the things that we talk about is the power of two.

Like how do you bring things together, rather than how it's felt for us for so long, is it all about how do you keep everyone separated? And for us it was like if you bring things together and that whole idea of community is part of that. And we looked at it on LinkedIn specifically, say for groups.

It's something that's been shunned on LinkedIn for so long and now we're going no, come back, come back, you're part of something.

Mark Schaefer: It's been ignored everywhere. It really has, and people are, are self-identifying and creating their own Facebook groups and LinkedIn groups. But in terms of a brand strategy, it has almost been completely ignored.

And it, I think it's the greatest overlooked marketing opportunity. It's right there and we just haven't thought about it in terms of a brand strategy.[00:07:00]

Michelle J Raymond: I think that people have their blinkers on that people wanna do business with other people, and I think that's one part of it. But I love that you've brought.

No, we also wanna be a part of a community as well, and be with other people who have bought those products. I love the example that you used with Harley Davidson. That was a classic example. I think back to when my dad bought one, I don't know, 20 odd years ago. And it was to be a part of something. It wasn't just a motorbike.

You could buy any motorbike, but there was something about belonging to the Harley Owners group or the HOG group, whatever they like to call it. And it was a thing, right? And so that was 20 odd years ago, but I haven't seen brands do it in B2B space, so well. It seems to be B2C. Have you noticed any other B2B brands that do it really well as yet? Or are we really at the beginning?

Mark Schaefer: A lot of the tech companies are doing that. A lot of the tech companies are pioneering this way, Michelle. And another thing that's very [00:08:00] encouraging to me is that 85% of the tech startups, which I guess by definition are probably B2B companies, generally. 85% of tech startups are leading with community as their marketing strategy because they know they need beta testers, they need fans.

They need people to help, be advocates and understand what they're doing. They need you know, resources. They need connections. To me, young people today are teaching us how to really market. They look at all of this advertising that we bombard people with and spam and, you know, getting our mailboxes filled with direct mail and they're saying, why would you do that?

We don't wanna be treated that way. There's gotta be a better way. So a lot of the best case studies and examples are really coming from young people today. They're, They're gonna lead us into this new revolution of belonging.[00:09:00]

Michelle J Raymond: I am excited for that future. It is definitely one that I'm drawn to. But one of the things that you raised in the book was about the difference between audiences and communities.

What do you think the key difference is? Because there are, you know, let's call it groups. I don't care which platform they're on and or where they're created. The tech isn't really the point, but there are some groups that have huge numbers, but I still believe their audiences are not communities. But how would you distinguish the two?

Mark Schaefer: Yeah, this is something that's often confused. In fact, it's funny. There was a guy I was talking to the other day who said, um, like he's, he fashions himself. He says like, I'm an expert in community, right? So he is telling me about his community.

He said, well, the problem in my community is that, you know, I come into my community and I give them content that I did, and then I'll do a presentation and they just wait for me to do something.

I said, well, that's not really community. That's an audience. And an [00:10:00] audience is perfectly fine. You have an audience. I have an audience. On LinkedIn we may have, um, connections that become interested in us.

LinkedIn is awesome because we can connect with people we would've never known before. It's probably how you and I got connected. And now it's led to this collaboration. So it's magical. Now, but it's, it's not really, a deep relational link. If we were connected on LinkedIn, and I said, oh, hey Michelle, fly to America and come to my event. You might be thinking, who's this guy?

But if you start reading my blog. Start seeing my content on LinkedIn. If you start listening to my podcast, now you're part of an audience. You've opted in, to me. That's a much stronger emotional connection. And if I say, Hey, Michelle, come fly to and come to my conference. You'd say, you know, actually, I'd love to do that. I'll get there.

Now,[00:11:00] that's where most companies stop. They're working on social media, they're creating an audience, but they're not moving to the ultimate emotional connection, and that's what branding is.

Branding is this emotion that you feel for a person, if it's a personal brand or a company, if it's a brand. It's what they expect from you when they hear about you or they interact with you. Community is the ultimate. What makes it different?

Number one is that there's communion. Like people know each other. That's the sure sign of an audience. If people don't know each other, they're not connecting, then that's an audience.

 The communion, the friendships, the collaboration, that is the true power because this is one of the most important things I learned when I was researching this book. I mean, this was like getting a master's degree in community writing this, this book that the [00:12:00] power of friendships that develop in a community, spill over to the brand.

It creates a layer of emotional switching costs because if people are in your community and their friends are there, if they leave you, they're leaving their friends. They literally belong to your brand, so it's very powerful.

Number two, people need a reason to gather. They need a purpose. So most marketers, they'll have a tagline or they'll have a point of differentiation, like we have the biggest selection of deli meats in Queensland. Well that's great. Fantastic. And I'm all about the deli meats. If I visited Queensland, I'd probably come to that store, but that's not a reason to gather.

I'm not going to come to a LinkedIn group because you got a lot of meat. Now. I will come to a group if you [00:13:00] help me learn something. If you help me grow in a new way. If you help me solve a problem. If you help me change the world. If you help me accomplish my goals.

And the power. This majestic thing happens, when the purpose of a company intersects with the purpose of their customers.

Is Patagonia a well-known brand in Australia?

Michelle J Raymond: Yeah, absolutely.

Mark Schaefer: So I have friends, they'll only buy Patagonia cause they say this is about responsible environmental recreation and sustainability. And literally people say, I will only buy these clothes. I belong to that brand because there's an intersection of purpose. That's number two.

Now, the third thing, which is weird for companies because companies wanna have a mission statement and they wanna have a plan and they wanna have a strategy. But the third point is you have to let it flow. You have to let it evolve.[00:14:00]

And this is really a big advantage of community because it keeps you relevant. You can't tell people, you can't dictate. This is what we're gonna do, and this is what we're gonna say.

In my community, Michelle, I have a community on Discord dedicated to learning about the future of marketing. I've got people all over the world, literally all over the world.

They're seeing things, experiencing things, learning things I'll never have access to. They're keeping me relevant. They're, they're informing me. Every blog post I write, every speech I give is based on ideas coming out of this community. They're making me better. Now. Scale that to a brand. What is a brand?

A brand is a journey of relentless relevance. You've got to be re relevant every month, every year to every generation you wanna sell to. And what better way to [00:15:00] do that when people are saying, this is what you need to be, this is what you need to do to be relevant. The world is changing. We're seeing new things.

So it's incredibly powerful.

Michelle J Raymond: I think the key difference for me is that if you take the owner of the group out and it's self-sustaining, that's a community. Yeah. But if the owner of the group needs to be there for it to keep going, it's still at that audience stage. And it's one of the hardest things I think, to get started.

But I think once you get that momentum, off we go and it's great. But that starting point is, for me, I think one of the challenges.

But when we're talking about brands, cause I think they're just an amazing opportunity. Where do you think that they go wrong when they're building these communities?

And I'm sure that there's a really long list, but, what are the key things that you think that they do wrong in the beginning?

Mark Schaefer: Well, it's an easy question to answer because, as a matter of fact, most brand communities do fail, and the reason that they fail [00:16:00] predominantly is because the, the communities are created to sell stuff. Saying, okay, you know, we're having trouble meeting our quarterly sales objective. Let's start a community and maybe that'll work.

Well, that's not gonna work because, having money plucked out of your wallet is not a reason to gather. It's not a reason to belong to something. So you've gotta assess the culture of the company. Is this a culture?

You talked about Harley Davidson. I used to work with Harley Davidson, and I can tell you everybody in that company from the top to the bottom, every employee is focused on that Harley owner's group.

 How it looks, how it sounds, everything about their merchandise, everything is focused on the customers and, their missions, their purpose of their group is we want to help people fulfill their dreams through the motorcycle lifestyle. They'd never even mentioned the word money, [00:17:00] right?

So that's where companies really fall down. You know, short of that, probably impatience, under resourcing the community. Marketing today, as you know, it's hard. I've been around a long time and I can say with some authority that this is the hardest time I've ever seen to connect to customers and nurture customers and, create those meaningful connections.

So, marketing is hard. Creating successful community is hard, but it also works. A lot of the, our other options don't work like they used to. So if you're gonna do hard work, let's do something that works and I think for a marketer, there's another exciting piece of this in, that community is not only marketing that works, it's marketing that heals.

It's the only kind of marketing our customers really want. They actually need it. And if you create that kind of [00:18:00] environment, you know, they'll feel like they belong there and they'll feel like they belong to you.

Michelle J Raymond: The funny part is I have a post-it note here, which you won't be able to read, but what it says on there is they fail, sell, not help.

That was the one of my favourite takeaways, um, of the whole book is the focus. As much as I have spent 20 odd years in B2B sales, that's my go-to. I love selling, but there's this whole marketing part of the world that, you know, cookies and funnels and I feel like if I give you my email address, you're out to get me.

Mark Schaefer: Right.

Michelle J Raymond: It's just a one-sided relationship.

Mark Schaefer: It's sick. I mean, marketing is sick. It is.

Michelle J Raymond: And it just feels like it's driven by the wrong things, which I think is maybe what leads us. Into the next question is how do you measure the ROI? Because I like to think that every marketer out there is out to do a good job and they're there to grow the business.

But I think there's probably some KPIs out there that are driving the wrong behaviours. But how do you measure the ROI on a [00:19:00] modern community that we've got?

Mark Schaefer: Well, I'm a marketing geek and, a data geek and ultimately it does have to be tied back to money. But if that's where you start, you will almost certainly fail.

So, I think this is the chapter of the book that, you know, maybe I'm most proud of. It doesn't come till Chapter 10. I almost thought, gosh, what if people don't make it all the way to Chapter 10? This is a really important chapter. Maybe I need to move it up.

Michelle J Raymond: I made it.

Mark Schaefer: You made it. I know. That's why, that's why I love you, Michelle. Thank you.

So, this is the number one problem for community managers. They know they're having an impact on the business, but they can't measure it, and it's a constant debate. It's constant angst in that profession, and I give a completely off the wall uh, uh, solution. And the reason it's off the wall is because people are missing [00:20:00] the whole point.

They're missing the brand value, they're missing the emotion. And the example I use in the book are these sports drink brands. So you've got Gatorade. Do you have that down there?

Michelle J Raymond: We do. And yes, I know all about Florida Uni.

Mark Schaefer: You know, you've got Gatorade. It's amazing. They have 80% market share of a 30 billion sports drink market.

And they sponsor FIFA, they sponsor the Super Bowl. They're trying to be relevant in cultural moments in sports culture. When you think about sports, you know, you automatically think about Gatorade. They're there, in the middle of it. They're advancing, you know, sports and athletics.

Now their distant number two is Powerade. And so Powerade, what are they doing? Advertising, coupons, sales [00:21:00] funnels, all these things that you and I just talked about, right? And here's another interesting thing. Gatorade is able to charge twice as much as the same amount in a bottle that that Powerade does.

Now in America, we have this sports tradition. It's kind of silly, but we love it. At the end of a big match, the players will sneak up behind the coach and dump the whole bucket of Gatorade on his head or her head. The cameras are reporting this. This is always, you know, it's on the news after a big win.

I wanna tell you something that happened a few months ago. We had the American football playoffs here and this was very unusual, one of the games was sponsored by Powerade. They snuck up and it had the big blue vat of Powerade. And here's what the announcer said. Here comes the Gatorade bath. [00:22:00] That's how powerful Gatorade is.

Now, here's brand marketing Powerade. They're doing direct marketing. They're doing ads, they're doing coupons, they're doing deals, they're doing end of aisle displays, and you can measure that. If you take out an ad, you can see how many people respond or redeem to it. Redeem a coupon. You can measure it. Does Gatorade sell more Gatorade because players are giving their coach a bath?

Yes. They have 80% market share. Can they measure that? No, you can't. It's about relevance. It's about a brand emotional connection. So this is what I'm saying. Almost every company is overlooking what this is about. You have to look at it through a brand marketing lens, and once you do that, the measurement thing kind of takes care of itself.[00:23:00]

Let's talk about Sephora. Sephora is a example in the book. Sephora, they have brick and mortar stores in every city in the world, probably right? However, 80% of their revenue comes from an online community with 6 million people in it. Here is their number one measurement engagement. Now, you and I have been around social media marketing a long time.

We kind of look at engagement like, eh, you know, well, it doesn't really sell more stuff. I've written blog posts kind of against engagement saying you can engage yourself broke. I wrote a blog post one time. I had so much engagement that was basically my full-time job for three weeks. That didn't make me any more money.

So I'm sort of a skeptic when it comes to engagement. However, in a community that shows you're vital, It shows it's working, it shows you [00:24:00] are relevant. People are talking and they're exchanging. And on Sephora, they're talking about, I tried this and I tried this. They're selling products to each other. The customer becomes the marketer. It's a beautiful thing.

So, that is really the short answer on measurement. We need to look at this through a brand marketing lens, and that solves the equation And engagement would be the leading indicator to community success because people are engaged in relevant conversations that are eventually gonna move outside the community and sell stuff outside the community aswell.

Michelle J Raymond: It's really interesting when you were talking about how customers sell to customers, in my mind I went back to, it's just like Avon. You would have Avon parties, bring your friends, let's all get together. And it was such a great thing.

We were also talking about one of my clients that I'm working with now who created an amazing[00:25:00] community for PetSmart. So obviously they had pet nutritional products. And then they went, well, where is our audience? Well, their audience they discovered was at the dog park. And so how do you reach that audience?

Well, what they did is they recreated the dog park online, and you could go there to get answers on, oh, what happens if my dog swallows this? Or I've got an older dog, what nutrition do they need? They would ask friends at the dog park and so they just made an online version of it. The focus on that, it wasn't about selling actual products, but they tripled their revenue. It was absolutely mind blowing how big it was.

Mark Schaefer: I mentioned, before you pushed record, I wish I had had that case study. I would've put it in the book. It's absolutely brilliant and it's the same sort of philosophy that if you build the community and build the connection, I mean, there's an example in the book, uh, chapter four.

This is my 10th book, belonging to the Brand. For the first time in any of my books, I devoted an entire chapter to one person. And this is a woman, Dana Malstaff she created [00:26:00] this community for entrepreneurial mums, who wanted to have a business and babies, and she didn't feel supported.

She created this very supportive community, and I mean, Dana is literally a genius. She is literally a visionary and she is now approaching a million dollars in revenue from her community. She has 80,000 people in her community. She has no sales, she has no marketing, she has no advertising, she has no marketing or advertising budget.

She doesn't need it because every course, every video, every meetup, every coach, you know, she has a paid membership level. They're willing to buy it because they appreciate her and this community, so much. Isn't this amazing? It's like the ultimate marketing, with no marketing.

Dana will never have to spend a dime on SEO or advertising or branded content or all these things we're obsessed with [00:27:00] because once you have a community, you've got it all. The marketing's over.

Michelle J Raymond: A question for you is building a B2C community and building a B2B brand community, is the process the same? Is there any difference that you've seen your research? For me, I think maybe it's the same, but am I missing something?

Mark Schaefer: I think you're right. I think it's exactly the same. I think because deep down the community has to fulfill some human need. Dana talked about in her community, and I see this in my community as well, she said, my job is to make this place safe, so the conversations can happen, the validation can happen, the support can happen. We can teach each other and lift each other up.

And I do that in my community too. It has to be completely safe, supportive, even, you know, even a loving place. We have zero tolerance for any kind of toxicity. [00:28:00] And the other important role I have as the leader of the community is to dispense status.

Because people want to know they're heard, they wanna know they're recognised, they wanna know they're acknowledged. If they just know I can go into this community and I know they'll pay attention to me, they'll keep coming back. So it's sort of a status machine, a status engine.

Michelle J Raymond: And going up those tiers, which is really brilliant.

Now, I would love to keep you here for hours and hours and keep talking, but I know you have done the circuit and been on many, many podcasts to talk about this book, but is there a question that you wish someone had asked you that they haven't asked?

Now's your opportunity to get something out there. So when it comes to brand communities, it's the future, but what do you wish someone had asked you?

Mark Schaefer: I think you did a very good job in a very short period of time, so congratulations and thank you. I enjoyed it very much.

You know, the way I [00:29:00] end a lot of my discussions is there's been sort of a trajectory of my writing over the last decade or so, and it's all about how do we get above the noise. And the noise is just getting worse and ChatGPT just made it a thousand times worse or a million times worse probably.

And how can we be seen? How can we be heard? How can we be discovered? I think personal branding. I wrote about that. That's part of the answer. I think, you know, creating compelling content, that's part of the answer. And I think community is part of the answer.

And the idea that wraps all of this up is that I believe the most human company wins. The company that, you know, instead of in the pandemic, the companies that said we are with you in these unprecedented times. Those are the companies that could not get off the advertising script.

The companies we're gonna remember, the [00:30:00] companies that mean something to us are the ones that rolled up their sleeves and said, our customers are in crisis and we are gonna come alongside them at their point of need and we are gonna help them. That is a human company. It's coming alongside your customers and showing them your heart and your passion, and your compassion, and your smile in everything that you do, every meeting, every complaint, every tweet, every exchange in a community, the most human company will win.

Michelle J Raymond: I think that's a brilliant place to end, Mark. I appreciate you.

I am excited about a future that is driven by empathy and community. I know that you'll have influence over many marketers out there, so I appreciate you nudging them in this direction. It's certainly something that myself and my community, I think will jump on board.

So I appreciate your time today and thanks for coming on the show.

Mark Schaefer: Thank you, Michelle. Thank you so much.

Michelle J Raymond: Cheers.[00:31:00]