The strategic employment of private online communities to engage customers directly and continuously in the planning and development of company products, services, or marketing has spread rapidly among consumer and business-to-business brand companies over the past 5-10 years. A company gest instantaneous feedback on its current products, uncovers new ideas, and customer connection is deepened through real-time participation with the company's products, services, and marketing campaigns.
With the proliferation of social media and associated horizontal dialogue on the web, the impulse to engage in direct connection has emerged as both an irrevocable impulse and a genuine opportunity for consumer brands.
We teamed with Sector Intelligence to identify the impact the use of private online communities is having on the consumer brand sector.
What was learned
From our research, 96 percent of respondents report that their marketing department is deriving value from their private online community, while 71 percent report the same for market research. Sixty-seven percent report a positive impact on product development.
In a global view, 54 percent of respondents indicate that the company's experience with private online communities has "changed the way we think about collaboration in general," and 46 percent felt that it changed how they think about customers. Eighty-six percent report they have experienced "deeper/richer insight into customer needs" while 82 percent say they have gained the "ability to listen/uncover new questions." On the more tangible front, 33 percent reported that their community changed a product design, and another 33 percent said that it changed the company's marketing strategy.
Another interesting finding suggests that employment of private communities is having a positive cost savings impact on the company's investment in and use of traditional research modalities. Forty-three percent of survey participants report they use fewer focus groups as a direct result of engaging in collaboration via the private online community, while 36 percent report conducting fewer surveys.
Conclusions: building loyalty through conversation
Ultimately, the study surfaced something that goes beyond the most visible benefits and challenges of private online communities: the "conversation" component that brands engage in to form a connection between brand and customer.
Specifically, the conversations generated in private online communities appear to constitute a "lifeline" -- or a perpetual empathetic link -- between the company and its marketplace, and, in some cases, across departments within the company. Speed of access, candid feedback, and the sense that the community can be employed for honest input leads to a sense of security and perpetual access. It suggests that as the world moves ever closer to ubiquitous connection, the lifeline between company and customer will become an essential tool for companies to stay connected with their consumer base. This relationship appears to be continually deepened because it tends to engender honesty and trust -- strengthening brand loyalty.
This "continual conversation" is present in no other form of research or interaction the company has with its marketplace. Further, this perpetual feeling of connection can gird the company's sense of relevance in the market.
Here are some real-life examples of community in action.
JCPenney's Ambrielle Team
JCPenney's Ambrielle Team, a private online community dedicated to consumers of the JCPenney lingerie line, launched to learn more about the Ambrielle customer and her fit concerns. JCPenney started with a series of online discussions within the community to gain an initial understanding of her fit and quality issues through a series.
After a "wear" test to gain more detailed feedback on specific products, participating members were invited to voice their opinions via a private discussion board, an online activity, and live online chats with the product team. Based on consumer feedback, JCPenney made several significant product changes to the lingerie bands, straps, and overall sizing so that its products better meet customers' needs. The changes were reported back to the community to show how they embraced their insights and feedback; the Ambrielle products hit stores in July of 2008, with much stronger sales. JCPenney has now incorporated wear tests into each product launch process and is continually incorporating community feedback into new product development to make changes prior to shipping new products to stores.
adidas' "New School of Thought" community
adidas recently launched a successful campaign titled "New School of Thought," a back-to-school marketing push that gives users access to free music from electro sensation Ultraviolet Sound and a 30 percent discount on adidas Originals items. This campaign was rolled out to retail stores nationwide, and was highly successful in recruiting new consumers and appealing to current adidas loyalists.
Based on its positive reception, the adidas retail marketing team launched a "New School of Thought" project within its already established private online community to continue the campaign and extend it beyond just the back-to-school time-frame. It recruited brand enthusiasts to provide insight and valuable feedback on the campaign itself to figure out how to best proceed.
The private community played a large part in helping adidas decide on three crucial elements of the campaign: font treatment, headline, and secondary tag lines. Based on some interactive discussions with their customers, adidas decided to keep the "New School of Thought" headline in all graphics since the community felt it added value of consistency. The brand also had the community vote on its top tag lines to identify which were the most impactful and true to the campaign message. The winners were:
- "Don't be afraid to show your true colors"
- "Color outside the lines once in a while"
- "Try something you're not good at, then try it again"
- "Sameness is a waste of space"
- "See something you like, take a picture, it'll last longer"
Due to the high levels of engagement and the invaluable feedback adidas has received from its members, what started as a project event plan is now an ongoing resource to elicit feedback around upcoming promotional activities. One concept tested in the community was "strike a pose while shopping," which involved people taking photos of themselves at the Originals Store. Based on community input, adidas designed an interactive "strike a pose" table display in each retail store with Polaroid cameras.
The implications of the conversation are not limited to developing new research or marketing channels; this perpetual connection to key customers can change how the company approaches customer connection and loyalty.
- Within the company, the "lifeline" that enables multiple parties to join the conversation directly with the customer to increase the relevance of company departments to one another. The departments collaborate, and they now have an actual customer voice "in the room."
- Word of mouth is likely to become a more central part of a company's future marketing strategy as it learns to integrate loyal customers into the brand strategy. The company will have the impulse to take a positive conversation and "write it large." The "intimacy" created in the context of ongoing conversation can be a powerful model for offline customer connection and learning how to engender customer loyalty.
- A sense of trust between customer and company is also likely to be engendered through the "promise-delivery" cycles experienced as part of the collaboration process. Customers participating in the community experience a consistency of delivery, and this sense will reverberate through word of mouth to the larger community of customers.
Aided by connection among peers and the plethora of options for obtaining access to products and services via the internet, consumers are now more educated and able to move from brand to brand with greater ease. The necessity for establishing a "lifeline" between company and customer has never been greater, but has coincided with the availability of technology poised to meet the challenge. This lifeline paradigm describes customer engagement, advocacy and insight in leading companies.
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