How online communities have come of age … for catalogers

By Joe Dysart

Eyeing the ongoing, phenomenal success of trailblazing social networking sites MySpace and Facebook, catalogers are creating their own online communities where they glean valuable feedback from customer posts.

“It’s a good time to become a niche online community and do it right,” says Don Philabaum, CEO of Internet Strategies Group, an online consulting firm. “You have millions of people who’ve learned the value of being a part of an online community, and they’ll bring experience, enthusiasm, content — and their network — to your online community.”

Blogs, discussion boards and other forms of interactive media are the most cost-effective customer feedback mechanisms around, according to Paul Gillin, author of “The New Influencers: A Marketer’s Guide to the New Social Media.” “You won’t get a representative sampling of your customers,” he says, “but you’ll get your most passionate customers.”

Overstock.com, for example, hosts an online community of customer reviewers who guide fellow consumers to the best buys and bargains. And it costs the marketer nothing. “Customer reviews on the Overstock site play an invaluable role in helping consumers learn more about the broad range of products we offer,” says Jacob Hawkins, Overstock’s senior vice president of change management. That naturally leads to greater sales.

Meanwhile, Improvement Direct, a marketer of home improvement products, also has a thriving online review community. The community is managed by online community services provider Bazaarvoice. “We started out early on with a freeware solution for ratings and reviews,” says Dieter Davis, Improvement Direct’s director of business intelligence. “After a year, it was clear that we weren’t generating many reviews from customers and had trouble integrating the content into our overall marketing strategies. So we started working with Bazaarvoice and were able to get live quickly, with little technical difficulty — even with Bazaarvoice adjusting its systems to accommodate a cross-Web site ratings and reviews solution.”

Diverse Community
Generally, online communities break into three categories. Most popular are open communities — simple social hangouts that attempt to attract as many members as possible by replicating MySpace and Facebook with as many community features as possible.

In the case of Hewlett-Packard, the computer products marketer has focused its social networking efforts on the digital photography community. The computer marketer’s “HP Community Wiki” (www.expressioncenter.wetpaint.com) features ongoing customer discussions on crafts, creative projects and ideas for printing at home. “It gives us a look into consumers’ lives and experiences through a series of snapshots over time,” says Tanya Maurer, HP’s customer experience program manager.

Other communities are solely dedicated to market research and often opt for an invitation-only model. Such private communities have smaller memberships that are, by design, more intimate. Users are typically the more valued customers who offer dependable insights. They tend to post more often and more regularly than those in purely social networks. Discussion threads often last for years.

The third type of community site is specifically designed to gather customer reviews on company products and/or services, and to publicize that feedback to future customers.

Going forward, expect at least a quarter of all Fortune 100 companies to announce online communities like these, “in which they learn about and create higher levels of engagement with their customers and markets,” predicts Brad Bortner, co-author of “Top Market Researcher Predictions for 2008,” from market research firm Forrester Research.

Open to All Means More Features
Online communities that allow anyone to join often have more community-building features than the smaller, more targeted sites. Sometimes they even have the overall look and feel of MySpace or Facebook. Hosting such sites usually requires slickly designed tools like discussion boards, chat rooms, instant messaging, blogging and photo posting.

Jump-start the community’s nerve center — namely, the discussion board — by posting commentary on a dozen or so industry topics. Then encourage visitors to offer their own reactions and opinions to the discussions you’ve started.

With a little luck and perseverance, these discussion boards will take on a life of their own. Your community visitors will come up with their own follow-up topics. Others may volunteer to moderate special interest groups they’re passionate about. Some will even volunteer to guard your forums from the occasional visitor who just shows up to cause mischief.

Some of the most mature online communities bring in professional moderators, experts in fields such as law, accounting and technology. These sponsors assume responsibility for moderating and managing their own forums.

These “expert” forums are a win-win. Sponsoring companies harvest the prestige of having industry-recognized authorities contributing to their Web sites. The experts get valuable exposure to an audience of potential customers.

Within these discussion threads, you’ll begin to glean valuable insights on how customers truly view your business — what’s working and what’s not.

In addition, you’ll have the chance to hire members who post messages on your discussion board, since these people are obviously passionate about your industry and demonstrate the critical personal skills you want in a worker. You’ll be able to learn a lot about potential employees by what they’ve posted on your discussion board and how they react to what’s posted.

Invitation Only
“When a few hundred members are participating on a regular basis, the quantity and quality of the content is deeper and richer than from large public sites,” says Katrina Lerman, co-author of the Communispace whitepaper, The Fifth ‘P’ of Marketing: Participation. Thus, some companies prefer small, private, invitation-only communities. Communispace is a service provider that specializes in designing and helping companies run these meeting places. According to Lerman, “For companies that truly want to connect with their customers, smaller may in fact be better.”

Under the Communispace model, most private customer communities are branded, password-protected sites where an intimate group of members spend months, sometimes years, brainstorming ideas for a company, sharing conversations with other customers and essentially playing a pivotal role in shaping the company’s future.

“Several facilitators guide the conversation and help bridge the gap between customer and company,” Lerman says. That intimacy and the invitation-only factor can result in more members participating in ongoing discussions. “When members [of invitation-only communities] contribute, they participate at a high rate — an average of 3.9 contributions per week,” says Lerman, citing an in-house study of 66 online communities researched by Communispace.

Review Sites
Meanwhile, review sites dedicated to netting customer reviews on goods and services are rapidly gaining popularity with many companies, including some of the biggest names in business — Dell, Macy’s, PETCO, Sears and PepsiCo, among others. A recent survey by the e-tailing group, Social Shopping Study 2007, found that 65 percent of active online shoppers visit online discussions where other consumers rate and review products and services they’ve purchased.

The study also found that 82 percent of respondents would rather get advice on a purchase from an online review or rating system than from knowledgeable, in-store salespeople. Moreover, another 81 percent of these online review readers say they regularly use those reviews to narrow their choices between two or three products.

Foreign consumers also are embracing user-generated review content as a critical part of the research and purchase process, points out Sam Decker, Bazaarvoice’s chief marketing officer. According to him, “78 percent of international consumers said they trusted direct recommendations from other consumers most when making product purchase decisions.”

Don’t Go It Alone
Finally, if you’re looking to jump-start a community for your site, there are a number of service providers that can help. In addition to Internet Strategies Group (www.internetstrategiesgroup.com) and Communispace (www.communispace.com), consider Zuberance (www.zuberance.com), Genuosity (www.kudosworks.com), Affinitive (www.beaffinitive.com), Capable Networks (www.capablenetworks.com), Passenger (www.thinkpassenger.com) and Web Crossing (www.webcrossing.com).

Joe Dysart is an Internet speaker and business consultant based in New York. You can reach him at (646) 233-4089 or joe@joedysart.com.