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Corporate online communities: Opportunities and challenges

Shuji Honjo
Corporate online communities: Opportunities and challenges Shuji Honjo

This article is derived from one of the ad:tech Tokyo 2009 sessions, "Does Your Brand Need an Online Community?", which I moderated.


As the social web enhances its presence, customer communities are becoming significant in the marketing ecosystem, and offer opportunities and challenges. Many companies are afraid of online communities. Do your brands really need online communities? How are online communities positioned in marketing? Are there any critical points for online communities? 


Case 1: Ricoh
In August 2005, Ricoh Japan launched GR-BLOG, its own blog featuring its new digital camera of the "GR" series, which had a number of avid fans. Since a few departments at Ricoh became interested in blogging at the same time and a new product launch was planned, Ricoh piloted this blog, aiming at developing a community with customers. 


Ricoh took a milestone planning approach, targeting 50 trackbacks in three months.  The blog would have been closed if it didn't achieve this goal. The result was remarkable, with 700 trackbacks in two weeks. The cumulative number of trackbacks by August 2009 was 60,780, i.e. an average of 42 a day.
 
Ricoh decided to continue its community effort, and extend it to other areas such as Java programmers.


Case 2: Kao
In May 2007, Kao Corporation started 'GO GO pikapika MAMA', its own online social networking community, as the place for solving childcare problems faced by novice moms and providing educational information about housework. As of August 2009, there were 16,269 members at this community. Kao's purpose was threefold:



  • Enhance consumer engagement with Kao

  • Acquire better understandings of customers

  • Improve search for more access to Kao's website

For two years, Kao did not provide product information to the community in order to let members perceive this community not as a sales channel but customer service. However, members eventually started asking Kao about products. Then, 66 percent of members contributed to the discussion, and brand websites access by them increased by 260 percent.


Kao observed that community members became fans, found and discussed good points about its products, and often acted like Kao salespeople. Kao is confident with the results of two years and is considering extending online community efforts to other areas.


Opportunities and challenges
Both Kao and Ricoh recognize the significant results and further potential of online communities, with the benefits of better consumer engagement and understanding. According to Avec Laboratory, corporate online communities have six merits: 1) customer engagement, 2) website access, 3) use of customer voice, 4) sharing emotions, 5) one-to-one communication to consumers, 6) detailed market research.


On the other hand, there are challenges for companies to launch and run their online communities.


First, since these kinds of initiatives are unpredictable and uncertain, project management is critical. Milestone management with contingency plans are required, and leadership and commitment are important.


Second, brands have no control over consumers in online communities, and there are legal and other risks. Marketing managers often worry about such risks too much. Although you should pay attention to such issues, these risks are manageable in most cases.


Online communities show differences by product characteristics. Since a specialty product attracts avid fans, Ricoh took advantage of such fans' blogs to build a trackback-connected blog network.


For commodity products like detergents, a new theme from customers' perspectives would be appropriate, rather than the product itself. However, after developing an appropriate community culture like Kao's, members would welcome product discussions.


Potential of online communities
OgilvyOne pointed out that you have a community if you have a brand. Through retail outlets, TV ads, and other contacts with consumers, a community emerges around a product or brand. You can activate it online, and such an online community would enable marketers to directly communicate with consumers, and consumers to connect with each other.


An online community is a powerful marketing tool especially for enhancing customer engagement and understanding consumers. Communities do not have to reside in a corporate web site. However, if you establish online communities as your own media connecting directly to consumers, they would become a significant asset.

Dr Shuji Honjo is managing director of Honjo International.

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