The 5 commandments for a cooperative business that maximizes surpluses

A cooperative that wants to maximize the surpluses it returns to its members needs a digital strategy built on five foundations. It must own its member and customer data, offer services through a business portal, use inbound marketing to revive neglected products, sell through its own eCommerce, and unify every channel into one view of each person.

Picture the general manager of a regional savings and credit cooperative on the evening before the annual assembly. Over the past few years her team did what every sensible organization did. They opened a WhatsApp line for members, put a shopping cart on a WordPress page, recorded training sessions for YouTube and answered questions on Messenger. Each decision was reasonable and each one worked. Yet when the board asks how many members interacted with the cooperative last quarter, which products they asked about and what they eventually bought, nobody can answer. The information lives in five places, and two of them belong to someone else.

That scene is the real subject of this article. The years of restrictions that began in 2020 forced almost every cooperative to improvise a digital presence in a matter of months, projects that had been planned for several years were delivered in weeks, and members who once queued at a branch learned to resolve their paperwork from a phone. Delivery services, remote work, digital banking, online government procedures and virtual education all became ordinary. The emergency has passed, but the habits it created have not. The question for a board today is no longer whether to be digital, but how to turn a collection of improvised tools into a coherent strategy that protects and increases the surplus returned to members.

Why does a cooperative need a digital strategy and not just digital tools?

A cooperative is not a conventional company, and that difference shapes the digital agenda. The International Co-operative Alliance describes a cooperative as an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs through a jointly owned and democratically controlled enterprise. Its principles include democratic member control, member economic participation and concern for community. Technology that serves such an organization has to strengthen the relationship with members, not merely reduce cost.

Improvised tools are a fair first response, and the original version of this article, written during the sanitary emergency, said as much. WhatsApp, Messenger, a WordPress cart and a YouTube channel keep the lights on. What they do not do is grow in an orderly way. Each channel has its own audience, its own rules and its own data, and none of them speaks to the others. The cooperative cannot see the whole member, cannot measure which effort produces which surplus, and cannot plan investments with confidence. A digital strategy is the act of deciding, once, how data, service, marketing, sales and customer care fit together so that every new tool adds to the same picture instead of starting another one.

The five commandments that follow are the order in which most cooperatives we advise should think about that picture. They are not five products to buy. They are five questions a board should be able to answer before it approves the next technology budget.

Commandment one: who owns the data your members generate?

Every digitalization effort begins with data, and this is where cooperatives are most exposed. Many invest steadily in social networks, through paid campaigns and organic posts, and the results can be real. Sooner or later, however, the organization runs into a structural problem, which is that it does not own the information those efforts produce. The author of the original article put it bluntly, noting that Facebook data belongs to Mark Zuckerberg and that a cooperative cannot simply download the database of everyone who reacted to its posts. That is an author's simplification, since social platforms do allow limited exports of page analytics and lead forms, but the underlying point holds. The relationship, the history and the permission live inside someone else's system, under someone else's terms.

The remedy is to have a tool of your own that connects to the social networks and captures the people who interact, so that the cooperative feeds a database it controls. Properly segmented, that database becomes the raw material for every future campaign, and it no longer depends on the policies or the algorithms of a platform. For this commandment the recommendation is a customer relationship management system such as HubSpot, which stores contacts, interactions and consents in one place and connects to forms, email, chat and social accounts.

For a cooperative the value goes further than marketing. Members are also owners, so the record of who they are, which products they hold, how they participate in assemblies and what they have asked for is the foundation of fair service. We have described how this works in practice in our article on how cooperatives generate value for their members with a CRM. Data protection obligations also differ by country, so the cooperative should treat consent and retention rules as part of the design from the first day, not as a correction at the end.

Commandment two: can a member complete a procedure without visiting a branch?

The consumption habits that formed during the restrictions strongly favored self-service platforms, where a person can complete a procedure from the comfort and safety of home or office. Today that is a requirement, not a differentiator. Internet banking offers the clearest comparison. Not long ago it was an extra; now no member would accept a financial institution that lacks it, and nobody thinks of it as a special service. The same expectation is arriving for cooperatives of every kind, whether they are in savings, agriculture, consumption, insurance or services.

The answer is the business portal, an enterprise website built on a specialized platform such as Liferay. A portal of this kind gathers what the cooperative needs in order to serve members digitally. It manages business processes, handles content, connects with banking and payment services, applies robust authentication schemes and adapts to any device, from a desktop to a phone. It is different from a brochure website because it is transactional. A member can log in, see a statement, request a service, upload a document, follow a request and receive an answer without anyone retyping the data. Our article on what differentiates a business portal from a traditional website explains the distinction in more detail.

The portal also changes the economics of service. Every procedure completed by the member is a procedure the staff do not handle by hand, which frees people to attend to cases that need judgment and advice. For a cooperative, whose margins are returned to members as surplus, reducing the cost of routine work is a direct contribution to that surplus. Our team works on this kind of project through its enterprise business portals practice.

Commandment three: which of your products deserve a second chance?

Every cooperative has a portfolio in which a few products carry most of the weight. They are the best known and the most promoted, and in many cases they have reached the limit of what promotion can add to sales or placement. Meanwhile, other products and services sit in the background, not because they lack merit but because nobody has accompanied them with the effort needed to make them take off. Those lesser-known offerings are an opportunity to bring in fresh income without having to find new members.

The recommended route is inbound marketing, a methodology that attracts, engages and delights people through useful content rather than interruption. The idea is to generate so much value that customers approach the cooperative because of their interest in what it teaches, and not because of the money invested in promotion. A member who reads a clear guide on how a credit line works, or how a harvest insurance product is priced, arrives at the conversation informed and ready to decide. Educating the member shortens the path to the purchase, and it fits the cooperative tradition, since education and information are themselves cooperative principles.

In practice the work begins with an honest review of the portfolio. The team lists the products that are lagging, identifies who would benefit from each one, and writes content that answers the questions those people actually ask. The content is published where the cooperative owns the audience, nurtured through email, and measured through the same CRM described in the first commandment. Our introduction to what inbound marketing is gives the full cycle, and ICX can support the cooperative in designing the strategy and the editorial calendar. Done well, a neglected product receives a second life, with valuable content around it, genuine interest from members and sales with room to grow.

Commandment four: can your products be bought from anywhere?

If the business portal brings procedures to the member's door, eCommerce does the same for products. It is the digital shop window of the cooperative, and for those with goods to sell it is an unavoidable pillar of the ecosystem. A cooperative of coffee growers, dairy producers, artisans or consumers can only reach customers beyond its physical location if there is a place where they can choose, pay and receive.

The platform the original article recommended was Magento, and that recommendation needs a note on how the market has moved. Adobe announced in May 2018 that it would acquire Magento Commerce, and the product is now sold as Adobe Commerce, as the company itself explained in its announcement that Magento is now part of Adobe. The open-source edition continues to exist under the Magento name, so the cooperative can choose between a community edition and the commercial Adobe Commerce offering according to its size and its needs. The original link to magento.com is kept here for reference. If you want a practical overview, our article on what Adobe Commerce is explains what the platform offers, and our B2C eCommerce and B2B eCommerce services show how we approach the work.

What makes a platform of this class valuable is the experience it gives the customer, which is interactive, self-managed and secure. It also offers merchandising tools that physical shelves cannot match. Related products, grouped proposals and special packages help the cooperative position more items in each purchase, which raises the average ticket compared with what the same customer would normally buy through the physical channel. A second benefit is reach. A virtual presence extends the geographical range of the cooperative, and in many cases it multiplies the size of the target market that the organization can access. More buyers and larger baskets mean more surplus to share. We discuss the commercial side in how to sell more through my eCommerce.

A word of caution is in order. An online store does not run itself, and the cooperative must connect it to inventory, payments, logistics and customer care, otherwise the digital shop window will create work instead of reducing it. That is one more reason to decide the architecture before choosing the tool.

Commandment five: do you see one member or five different conversations?

The final commandment, which the author described as the cherry on the cake, is omnichannel. A cooperative speaks to its members by telephone, Facebook, Messenger, chatbot, WhatsApp, email and in person. Seeing everything that one member has said through those different doors can become an impossible task when each channel keeps its own record. The member, meanwhile, assumes that the cooperative knows what was said yesterday, whichever door was used.

The good news is that tools such as the CRM mentioned in the first commandment allow all of this to be seen at one point. HubSpot, for example, shows what is happening with a person from the point of view of service, sales and marketing in a single record. That gives the cooperative something it cannot get from separate channels, which is a consolidated view of the member. It also brings independence from individual employees. When every action and communication is recorded, several people can collaborate in following and resolving a case, and the departure or absence of one employee no longer breaks the relationship. For a deeper look, see our pieces on how to improve customer experience with omnichannel CRM and the benefits of an omnichannel CRM, and our omnichannel platform service.

What does this mean for the C-level of a cooperative?

The five commandments are really one argument seen from five sides. Data ownership gives the cooperative a memory. The portal gives it a digital front door for service. Inbound marketing gives it a way to create demand for products that were sleeping. eCommerce gives it a way to sell beyond its walls. Omnichannel gives it the discipline to see the member as one person. Remove any of them and the others weaken, because a portal without a CRM cannot learn from its users, and an online store without content cannot attract anyone.

For general managers and boards the decision is therefore one of sequence and ownership. The sequence matters because the CRM and data model should come first, since every later initiative will draw on them. Ownership matters because someone must be accountable for the member experience across channels, and in many cooperatives that responsibility is shared by so many areas that it belongs to none. A cooperative that names one executive owner for the digital member relationship, funds the data foundation first and treats each later project as an extension of it will avoid the cost of duplicated tools and incompatible records. It will also be able to show its members, with numbers, how digitalization has contributed to the surplus they receive, which is the most persuasive argument at an assembly.

How can a director start next Monday?

The first step is an inventory. Ask each area to list every channel and system through which members and customers interact with the cooperative, who administers it and whether the cooperative can export its data. Most organizations discover duplicates and gaps in a single afternoon, and the exercise alone clarifies which of the five commandments is the weakest.

The second step is to choose one member journey and follow it end to end, for example the experience of a member who wants to apply for a service or buy a product. Count the contacts, the repeated questions, the documents that had to be retyped and the moments when the member waited. The result is a short list of pains that can be fixed in a quarter, and it gives the board evidence instead of intuition. Third, pick the lagging product with the most potential and commission an inbound pilot for it, with a clear target such as qualified requests per month, so that the cooperative learns the method on a small scale before committing more budget. Fourth, establish the CRM as the single place where member data lives, and require that any new channel feed it. The order of these steps can vary, but a written plan with owners and dates is what separates a strategy from a wish.

How does ICX help?

ICX Consulting works with cooperatives and other organizations to define the digital strategy first and then select and implement the platforms that serve it, whether that means a CRM, an enterprise portal, an eCommerce platform or an inbound program. Our consulting always comes before the technology, because the technology is only as good as the decisions behind it. If you would like to structure that thinking, our Digital Transformation Toolkit offers a practical framework for assessing where the organization stands and which initiatives should come first. We recommend it for this topic because the five commandments are a digitalization agenda, and the toolkit helps leadership teams order that agenda by value and readiness.

Frequently asked questions

Do small cooperatives need all five commandments?

They need to consider all five, but not necessarily to build all five at once. A small cooperative can begin with a CRM that captures its data and a simple inbound program, then add a portal or an online store as volume justifies it. What it should avoid is adding tools without a plan for how the data will be shared among them.

Is it a problem to use WhatsApp or social networks to serve members?

No, these channels are where many members already are, and using them is sensible. The risk lies in letting them become the only record of the relationship. Connect them to a system the cooperative owns, so that conversations and contacts are captured in its own database.

Should a cooperative still choose Magento?

The platform is now part of Adobe and is offered both as an open-source edition and as Adobe Commerce. The right choice depends on the volume of sales, the need for features such as B2B and the available technical team. A short technical and business assessment before selecting is worth the effort.

How long does it take to see results?

Foundations such as a CRM and a first set of content can show progress within a few months, while portals and eCommerce platforms are projects of several months that depend on integrations. The right measure is whether each stage improves service or income for members in a way the board can verify.

A cooperative exists to return value to its members, and a well-built digital strategy is now one of the most dependable ways to do it. If you would like to know where your own cooperative stands against these five commandments, request a diagnostic with an ICX consultant and we will review it with you.