Why Customer Communities Work

When we made the case for customer communities, we didn't delve too deeply into the aspects that make these communities so powerful for businesses and for customers. Ever since my colleagues Jen van der Meer pointed me to his blog, I have been learning a lot about figuring out relationships and influence factors from Dr. Michael Wu at Lithium.

In a recent post, where he talks about the work of Prof. Mark Granovetter in The Strength of Weak Ties, and lists the components of tie strength:

1. Time: amount of time spent together
2. Intensity: emotional intensity and the sense of closeness
3. Trust: intimacy or mutual confiding
4. Reciprocity: amount of reciprocal services

Where should companies focus their effort in building stronger customer relationships?

Build relationships on trust

Which is not the same as authority and reach and the main reason why media companies are not building communities. Trust is built on authenticity and transparency, which is the place where "us vs. them" becomes us and the transaction feels valuable.

Companies support customers in becoming better buyers when they are more accountable for their practices. Which hopefully makes for better buyers. And better buyers create more enthusiast evangelists; people willing to help companies make better products, or enroll other customers.

The other reason why this creates more value for the business is a greater number of loyal customers.

Engage reciprocity

Is another way to develop stronger relationships with customers. Dr. Robert Cialdini explained the psychology aspects of reciprocity, how people tend to want to return a favor. That's why companies that learn to give customers things to do, that let customers serve them, have a competitive advantage.

The social aspects are more important for you to understand than the technologies, especially if you're looking to see why customer communities work. They work because they engage individual participants at a personal level. When people do something, they are bound to talk about it.

And it is at that level that we connect with each other while the brand provides the context for that engagement.

Community as context

As defined by the business dictionary, a community is a:

1. Self-organized network of people with common agenda, cause, or interest, who collaborate by sharing ideas, information, and other resources. Virtual communities consist of participants in online discussions on topics of mutual concern, or of those who frequent certain websites. 
2. Cluster of common interests that arise from association. 

So you may find current fans and organize a space for them to meet each other, invite current customers and prospects to join in a space you have developed to help address common issues, questions, interests, or concerns. Doing that, helps you create context for a community to form.

Customer communities work because they engage reciprocity and help build trust, thus making social ties stronger. This however, doesn't happen overnight, and needs strong execution to pull off with sincerity -- "get me a community" means putting skin in the game at a personal level.

What will you do differently today?

[image from Forrester report on ROI of customer service for B2B]

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Comments

[Alexandra Reid]

Thanks for the post Valeria,
Building trust through authentic and honest engagement requires a lot of effort in both time and consideration. Being deeply engaged in social media myself, I hear a lot of arguments supporting social automation. However, it strikes me as such a deep contradiction. How on Earth can socializing be automated? Does this defeat the purpose?

[Lisa Stockwell]

Great post and you've provided some other great links I'll have to read as well. One point you didn't bring up specifically is relevancy. I think it's inherent in "context" but often administrators bring the community together based on shared interest and then drift off into other subjects that render them irrelevant. It's like the women's book club that starts as a way to stretch the intellect but digresses into a gossip session. The group may all be close friends who've known each other for a long time, but eventually those who came for the literature will stop coming. I don't think we can talk about relevancy too much.

[Patrick Prothe]

Robert Cialdini's work has made a big impact on me; particularly around the concept of reciprocity. It's powerful.

Your post highlights how much effort is required to build a successful community and that's why it's tough for companies to grasp. It requires focused time - not just a quick campaign, and move on, but just as we want customers to engage with us, we have to do the hard work of engaging with them.

I also read this weekend about the downside of Groupon - how it could be fostering poor consumer behavior in terms of setting expectations that 50% should be the norm plus multiple uses of same coupon. I know has forced a couple of local restaurants out of business. While it may be great for building burst of traffic, it may be tough way to build longer term engagement. Perhaps there's an opportunity here that's not being tapped.

[Valeria Maltoni]

@Alexandra - use the tools to automate the planning and process parts so you can have more time to participate with customers. For example, plan an editorial calendar to keep you on track and not scramble to find topics to write about, know when you post, who joins in from the organization, etc. That also creates accountability in the organization while it sets expectations. Also, has a process to find people who are more "social" inside the business. Hope the distinction helps.

@Lisa - relevance is a major point indeed. Thank you for providing such a great example of what that means vis-a-vis the community.

@Patrick - and that effort will be rewarded with ongoing insights you don't get in focus groups. A blog can be a community, or develop one with potential to grow as part of a customer extranet. It doesn't need to be very complicated. Re Groupon and offers - you would be hard pressed to buy a 2-liter soda at full retail price again. However, when you go to a bar or restaurant, you probably pay twice the retail price on your soda order. The key with any channel deal is to figure out how the company makes money and think through implications of running offers. Marketers and business owners need to be well versed in business strategy and not be seduced by the fast numbers.

[Chuck Van Court]

Customer communities can certainly provide a lot of value and save companies tons of money in support costs.

However, most of these communities do not include the infrastructure required to ensure that questions get timely answers and many questions remain unanswered entirely. When this happens, the consumer not getting their question answered does not blame the community, they rightfully blame the brand for offloading their support responsibilities.

For communities to be effective in providing answers: the technology used to support them must allow active management of unanswered questions and they must clearly and consistently recognize the people providing the right answers. They also need to include search engines that quickly get people to desired content and help stop repetitive questions from being asked. When questions do not get answered within acceptable and established service levels, the questioner should be able to proactively call upon relevant subject matter experts for help with the eventual escalation to support staff as necessary.

A 2010 study by 80Legs found that 72 percent of topic threads asking a question had no resolution. Pretty bad!

I totally agree that the ultimate success of support communities will come down to the community members, but without the proper technology in place to adequately manage things, its unlikely that the community will realistically provide sustainable value as a support alternative.

[Valeria Maltoni]

@Community - The last comment was brought to you by a representative of a company that has a technology that allegedly does the very things the comment is about.

@Chuck - you are welcome here. And yes, your comment is on point in terms of having a strong back end system that manages work flows so that inquiries get timely responses. There are many companies that offer good technologies -- Lithium, Jive Software, Telligent for the enterprise, and more. The role of Community Manager and of the company is paramount in this sense. It's important to note that the post answered the "why" vs. the "how" question.

[Chuck Van Court]

Thanks for your reply Valeria.

I do indeed happen to be the founder of a company that sells software in this space. In addition to living and breathing this stuff for many years now, I am also one of those "high maintenance" consumers with not enough time in the day and no tolerance for poor customer care.

I understand that your article was about the "why" and my comment was just intending to get people to think about the "how" and why it matters so much.

Bests, Chuck