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Should you switch to a community model of business to spur growth?

Posted by Shivali Anand

March 9, 2022    |     4-minute read (644 words)

A feeling of community brings individuals together in a special way. When people meet others who share their interests and ambitions, they become devoted to that group. Similarly, firms that have tapped into or formed their own communities have witnessed explosive development.

Types of community business models

Community business models split the market into groups based on similar interests, whereas market segmentation divides the market into a few small, homogenous groups based on shared characteristics. Once you have determined which model best suits your business, you can leverage that model to build a community around your product or service. 

The physical community model

The physical community business model examines how your company's location in your city influences how you promote. Focusing on utilizing your unique physical community may lead to tremendous development for brick-and-mortar businesses that appeal to a broad spectrum of individuals, such as restaurants, convenience shops or banks. Billboards, discounts and parking lot displays are examples of hyper-local advertising that may assist companies that rely on the physical community model to expand.

For example, an ice cream store can be located near a school and in a neighborhood with young families, knowing that their target consumer will be nearby. They're sure to experience an increase in revenue if they put up signs in the region, send a buy-one-get-one ice cream coupon to everyone in the local neighborhood and set up an eye-catching parking lot display after school.

The professional affiliation community model

The professional affiliation community model examines how a company can cater to the needs of a particular job, career goal or other professional need. Medical supply firms and real estate marketing companies are two examples of companies developed on the professional affiliation network concept.

Since a professional community may be considerably larger than the service area of a brick-and-mortar firm, it may be more effective than a physical community model. Plus, members are more inclined to make purchases within a professional community, because the return on investment is more evident in a professional group.

The internet community model

The online community concept is based on how well the internet links individuals virtually worldwide. The internet can bring individuals together from many walks of life, from dog lovers to stay-at-home parents, from anime enthusiasts to movie buffs. It's simple to understand how online networks could swiftly outnumber physical and professional communities. But harnessing the power of internet communities is complex — with so much competition and distraction, they may fizzle out just as quickly as they emerge.

Using the power of community

Businesses that create a feeling of community or tap into an existing community have long-term viability for a variety of reasons, like:

Marketing via word of mouth –

 Members of a community are likely to ask others to join them. Because your members are likely to have friends and relatives who share the same need, aim or passion, these community groups will likely develop over time. People are 84% more inclined to believe a recommendation from a friend. And best of all, this method of promotion is completely free!


People yearn to be a member of a group, whether it's personal or professional. Many people join professional associations, hobby clubs and charitable organizations because they are afraid of missing out.

Access to the most reliable data source: member conversations –

 As members of your community interact with one another on social media, you'll be able to see what they honestly think and how they're using your product, as well as hear what they're asking for and see new needs. Furthermore, this community is an excellent area to beta-test or soft-launch new services.

While it takes work to build a strong community around your business, the benefits are undeniable. Businesses that rely exclusively on market segmentation may grow more slowly and less powerfully than those that establish or connect to a community.

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