Online communities are already delivering business benefits in the US. If your board isn't asking for one, it soon will.
Perhaps the biggest selling point of communities is that they reduce costs while increasing customer and employee loyalty and satisfaction. Emily Meehan, senior analyst at Yankee Group which specialises in virtual communities, says, "Communities are used for internal company communication and knowledge management,and in meeting external customer service needs. We are also seeing lots of communities use new or traditional content providers to strengthen brand awareness. Finally, the example shown by Cisco Systems has given lower support costs and more satisfied customers."
Perhaps the least understood application is when communities are created internally. Internal communities allow staff to help one another. By deploying a virtual helpdesk, you reduce IT support by putting basic requests into hands of everyday users.
"Virtual communities are places where people come together online. They are brought by a variety of organisations to fulfil any function. While the role we see is in a business to consumer e-commerce at www.productopia. com, this is one area where a community can be successful," Meehan adds.
Joe Cothrel, vice president of research at leading US community consultancy and managementcompany Participate.com, defines virtualcommunitiesas: "Groups of people with a common interest, who interact online. Their distinctive feature is they allow people to interact on a 'many-to-many' basis. A large group of people dispersedgloballycan exchange ideas as if they were a small one in the same room. It's different tojust having a lot of e-mailsgoing between individuals."
In a bricks-and-mortar organisation, communities are deployed in similar situations. This is either to enhance brand loyalty or supplement e-commerce. At www.acehardware.com/ hints, a community has been created for customers to exchange tips and ideas on hardware uses. In turn, this enhances customer retention and share of wallet, whilst improving sales in each physical store.
Cothrel says, "Companies create communities for many reasons. A community of customers can drive sales, simply by helping choose products. It can drive loyalty because participants tend to remain customers for longer. Among business partners, it improves co-ordination and knowledge sharing. It can do so more effectively thanothermethods. Our experience suggests companies often get a return of 300%-400% in the first year of community efforts."
So how do you implement an online community? Martin Jenkins is vice president of strategy at CitiKey, a mobile city guide based on community, and has a long experience with communities. He believes, "They have to be relevant. You have to build support with a base infrastructure of information and technology to ensure the community can grow organically."
A key factor to success is ensuring that you have feedback loops. This enables members or customers to create content they want and may involve incentives. Butthe return will be cost-effective in thelong run. Data collected can be fed back into product development, marketing, business analysis and market research.
Cothrel believes you can't actually implement a community but says, "You can create programmes to help a community come together. It's not just semantics - it's understanding what is within your control and what isn't. Community members ultimately join in when you've created compelling programmes and gives a clear return on participation. That return can be information, convenience, recognition or something else."
How can you best manage content of an online community? There are two types of content - editorial created by professional writers and user content.
Cothrel believes, "It's most effective when these two kinds of content work together. For example, a provocative essay or dramatic new story can prompt much debate among users if the programme is properly designed. Both types of content should be similarly managed so users can understand the context of what they are reading and to be able to find what they are looking for."
If allowed to grow and develop organically, communities can create self-sustaining sites with customer generated content. So you can sit back, manage, and reap rewards.
Tips for online communities
The five building blocks for an effective online community are