Twelve best practices for online customer communities

Twelve best practices for online customer communities

Summary: One of the more significant Web 2.0 trends in business this year has been the advent of the Web-based customer community, where groups of like-minded individuals focus around a brand or a set of product and services come together and interact online. Far from the cynical marketing ploy that it can sometimes seem, customer communities often sprout up on the initiative of passionate customers. Successful examples of this include XMFan around XM Radio, HDTalking for Harley Davidson, and IKEAFANS on IKEA products.

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One of the more significant Web 2.0 trends in business this year has been the advent of the Web-based customer community, where groups of like-minded individuals focus around a brand or a set of product and services come together and interact online. Far from the cynical marketing ploy that it can sometimes seem, customer communities often sprout up on the initiative of passionate customers. Successful examples of this include XMFan around XM Radio, HDTalking for Harley-Davidson, and IKEAFANS on IKEA products.

It's imporant to note that the communities above are vibrant, active, and absolutely not affiliated with the businesses that the communities are focused on. As a result, business are increasingly realizing they can reap benefits by attempting to foster these communities themselves, rather than hoping that a group of users will do it on their own. While this can be a risky proposition -- garnering an active community of users successfully is still more art than science at the moment -- the rewards are increasingly clear for those that are successful.

Numerous studies over the years have underscored the benefits of customer communities, ranging from the 2001 McKinsey-Jupiter Media Metrix showing that "customers of web community features generate two-thirds of sales despite accounting for only one-third of a site’s visitors" to the brand new Deloitte study recently highlighted by the Wall Street Journal that showed that over a quarter of community initiatives increased sales even while most business-sponsored customer communities struggled to achieve critical mass in terms of users.

Some Common Types of Online Community

Despite the growing body of research and studies, exact numbers for customer communities are still pretty hard to come by yet it's clear from a number of sources that business are beginning to get community religion en masse. A couple of recent examples that demonstrate the kind of customer community initiatives that are emerging include Hyatt's new Yatt'it community for frequent travelers and the decidedly back-from-near-death Member's Project by American Express. Both are highly produced and attractive-looking communities, especially compared with the three successful grassroots communities I listed at the beginning of this post, but are struggling for customer engagement and participation nonetheless.

Deloitte's Tribalization of Business customer community study is getting a lot of attention. View a Slideshare summary of the findings.

What then is the secret formula for building successful communities for your customers? Certainly there are well known success stories to examine for clues. One good example is Dell's online community which it famously used for a corporate image turnaround last year and remains one of the most highly regarded and highly trafficked customer community properties. Another is SAP's various customer communities, with over a million registered business and technical users and a high degree of participation.

What can we learn from these success stories and a rapidly emerging set of business practices? Quite a bit as it turns out. I've taken as as many lessons learned as possible from the available outcomes of customer community efforts, as well as my hands-on experiences, and the synthesis forms the list that you see below. Please note that like any of my lists, it's not exhaustive, and you are welcome to add your own in Talkback below.

Best Practices for Online Customer Communities

1. Put the needs of the community first. Communities exist to serve the needs of their members, and in customer communities businesses can elect to become close-knit participants in good standing or keep the community at arm's length. The most vibrant communities such as Dell's or XMFan have a good relationship with at least a few key leaders in the sponsoring organization. But making sure the community has truly free rein to serve itself -- even if it ends up recommending competitor's products in some cases or becoming a venting zone for customer's complaints -- is essential for the community to thrive through open conversation, honesty, trust, and candor. This back-seat position can be a very difficult thing for some organizations to accept, much less encourage but the best organizations manage to do this with humility and a sense of mutual respect.

2. Community is mostly not a technology problem. There are literally dozens of capable community platforms in existence today. Almost all of them can be used to create a compelling community with the features that users will need to discuss, share ideas, brainstorm, complain, support, and moderate each other. I'll do a round-up of these in an upcoming post, but whether you use Drupal, Joomla, or DotNetNuke (to name just three leading example), it's safe to say that the biggest challenges you will have will be around the business challenges and social architecture of your customer community and not the technology, with the possible exception of emerging community architecture standards such as OpenSocial and DataPortability.org.

3. Active community management is essential. When Josh Catone recently analyzed some of the findings of the new Deloitte community study, he noted that one of the big takeaways was that most customer communities lack proper management. Communities are indeed self-organizing, but like community of any kind they require active administration, management, and moderation or the community will devolve into a least common denominator environment where abuse, spam, neglect, inactivity, and poor behavior of a few go unaddressed and drive away productive participants.

The most successful community management also is very proactive and goes out the way to draw in the best new participants and contributions to ensure the community has a substantial foundation that will hold on to members long enough for it to form a cohesive identity and a strong network of relationships amongst its members. This is one of the most consistent observations in the online community world: well-resourced community management is apparent in every one of the successful online communities I've come across.

4. Measuring success with community requires new yardsticks. Unique visitors is one often cited community metric that I've come across numerous times. Experience share is another, probably more relevant measurement that cited more often these days. But communities offer much better benefits far beyond the sheer visitor count or community size. Often the most influential members of an organization's customer base will be active in online communities, both forming a draw for other members but also shaping community and public opinion in a forum that is mutually vouched for by the community and its sponsoring organization.

Beyond just behind home for influencers, communities form a qualitatively new type of relationship with a customer base and it's interesting to note that while Dell does cite page views as part of its community success, it also cites the large number of new ideas that customers have submitted, the value which can't possibly be measured in terms of traditional Web analytics. While many customer community budgets will continue to be approved on the basis of very Web 1.0 metrics, pushing hard for new ways of measure value will be essential, particularly has communities will interface with organizations across just about every major business function sooner or later, and not just marketing and PR, even though that's where many sponsored customer communities start life.

5. Consumer social networks, grassroots customer communities, and business-initiated customer communities are closely related yet very different creatures. A quick glance at a few of the customer communities listed above as well as some of the larger, more active customer groups in Facebook, shows how different they can be. Primark (a U.K. retailer) probably has the largest existing commercial Facebook group, with over 94,000 members and a level of participation that would make it the envy of most customer community efforts. The unforced and natural user experience of grassroots communities such as XMFan and HDTalking is also probably not coincidental in their success, most likely making it seem a less-corporate and more relaxed setting for participation. The lesson here is that customer communities come in many forms and understanding the motivations, expectations, participation styles, conversational modes, and desired user experience will be required learning as we undestand what our customers are really seeking from online communities based on interest in products and services.

6. Customer communities do work as a marketing channel, just not in the traditional way. It's probably safe to say that customer communities are a solid marketing channel for an organization. The recent Deloitte study mengtioned above confirmed that fact consistently in a number of ways. But the benefits often come in unexpected ways include the community becoming a place where the latest "unofficial" news is exchanged or leaked, where visitors can expect to have non-hierarchical contact with an organization's employee, with the attendant increased flow of oft-unapproved information, and other communication is conducted, both subversive and otherwise. Customer communities tend to project customer influence and demands deeper into an organization and create more sustained contact. And the reverse is also true, with the result being outcomes which don't appear so much as marketing but as cooperation, mutual brainstorming, and co-development of ideas and outcomes.

7. The more the business is integrated, the better the community will work. One of my favorite stories was of a community manager informing the organization that on day one, the community will be "90% us and 10% them. Give me your involvement, and a year from now it'll be 90% them and 10% us" and this result was borne out. Customer communities in reality are joint communities of the business and the customer both. Deep involvement by both as early as possible and from many parts of the organization will create the early critical mass that can avoid the low-levels of participation seen in many organization-initiated customer communities.

8. Growth will come, but not until a community finds its identity. To expect something based on social dynamics as much as community is to be predictable and grow linearly just doesn't reflect reality. Many communities struggle for a while until they catch their stride when they reach the right participants, or offer the right means of engagement such as using a different model such as a social network instead of discussion forums (or vice versa.) While pilots can help find some good models early on, only sustained contact with customers will find out what they really need in a community. The first community may be the on that provides the necessary input to create the "real" community. Such organic growth models can be hard to embrace from a process and expectations standpoint, but are more likely to return meaningful results in the medium to long term.

9. Mutual ownership and control of communities enables trust and involvement. Like so many things in the Web 2.0 era, giving up some control of the community to the community itself is the surest way to get buy-in and to make sure that the participants in the community can make it into what they want it to be. As with Enterprise 2.0, communities are excellent change catalysts, as long as you allow them to be.

10. Most communities are highly social entities, and the rules of social engagement apply. Certain general rules seem to apply to communities, such as allowing like-minded individuals to self-organize into sub-groups, protecting conversations from scale, rewarding members that do good works, and so on. Imposing artificial rules that are counter to natural social inclinations are likely to invoke dissonance and prevent natural communities from forming as they should. The basic rules of social media apply here.

11. Going to the community, instead of making it come to you, is a risky but increasingly viable strategy. I've heard and been involved in a lot of discussion about social networking and community fatigue and how users are more likely to be comfortable using their existing social sites for customer interaction. The jury is still out on this despite the fact that initaitives like OpenSocial are indeed likely to make it cost effective to go to the customer across hundreds of open social networks in a single act. However despite the risk, the relative ease of doing so makes the risk and investment likely worth it in many cases. That doesn't mean such community channels don't bring with them major restrictions in control, governance, and data ownership. Use with care, but at the very least such "go to the user" strategy can be an important plank in driving membership and participation.

12. Connect the community with the other CRM-related aspects of the organization. Customer communities have been used successfully for customer service, the generation of innovation, trend spotting, marketing, lead generation and many other activities. In the future, it's likely that many customer communities will blur extensively with the organizations they are associated with and become more and more closely involved with their customers in a wide variety of activities. Those organizations that can do this successfully will likely reap rewards of efficiency, innovation, producticity increases and others, while assuming some of the risks involved in any sort of crowdsourcing activity.

Recently, I've been seeing tremendous interest in community aspects to almost all customer-facing online activities. And by the very nature of community, this will have varying levels of success based on whether the community is already thriving to how well its integrated into the activity and if it provides sufficient motivation from the customer. I made point #1 the first because of the most common attitudes is an overriding "What's in in for us" view towards investing in community efforts. While this is clearly tied up in entirely valid ROI discussions, the bottom line is that if customers needs are put first, the value will quickly emerge. Just ask those with successful communities whether it was worth the investment. The answer I've always received has been enthusiastically in the affirmative.

Please add your customer community best practices (with numbers) in Talkback below.

Topic: Browser

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2 comments
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  • Excellent article

    A belated thank you Dion for your fine work. Your 2010 article is even better!
    Cyberoid
  • Converting Customers

    It's one thing to get your name out there, it's another to convert customers! Thanks for the tips and refreshers.
    MethodTech