For Australian SMEs, the question of whether to focus on community building for customer retention is increasingly important. The short answer is, generally, yes – but it needs to be strategic. We’re seeing a shift away from purely transactional relationships with customers, and towards a desire for connection and belonging. Simply put, customers who feel part of something are far more likely to stick around.

Traditionally, retention marketing centred on loyalty programs and email offers. These still have a place, but they’re becoming less effective on their own. Customers are bombarded with offers, and loyalty is easily bought and sold. Community building taps into something deeper – a genuine connection with your brand and other like-minded people. It’s about fostering advocacy, not just repeat purchases.

Here are a few key insights to consider:

• Reduced Acquisition Costs: A strong community acts as a powerful word-of-mouth engine. Happy community members naturally recommend your business, lowering your reliance on paid advertising.
• Increased Customer Lifetime Value: Engaged community members tend to purchase more frequently and try new products or services. They’re invested in your success, and that translates to long-term revenue.
• Valuable Feedback Loop: Communities provide a direct line to your customers. You can gather invaluable feedback on products, services, and marketing campaigns, allowing you to refine your offerings and improve the customer experience.
• Brand Resilience: In times of crisis or negative publicity, a strong community can act as a buffer, defending your brand and providing support.

However, community building isn’t just about creating a Facebook group. It requires consistent effort, genuine engagement, and a clear understanding of your target audience. Think about what truly matters to your customers – what are their passions, their challenges, their aspirations? Your community should centre around these things, with your brand playing a facilitating role. Don’t just broadcast; listen, respond, and create opportunities for members to connect with each other.

If you’re serious about long-term customer retention, we recommend starting small. Identify a core group of passionate customers and provide them with exclusive access, early previews, or opportunities to contribute to your brand. From there, you can gradually expand your community and refine your approach. A well-nurtured community will pay dividends well into 2026 and beyond.

Your next step? Analyse your existing customer base to identify potential community champions. Who are the customers already actively engaging with your brand on social media or providing valuable feedback? These are the people to start with.