The Future of Online Communities: Leveraging Social Interaction to Drive Business Value

Did you know?
The following performance gains were realized over 12 months by organizations leveraging social media to engage with customers:

• 96% improved customer advocacy
• 82% improved their capacity to apply customer insights for products/service improvements
• 53% reduced market research cost

Although in early stages of customer adoption, online communities and social media present new opportunities to connect with customers and prospects, build trust and increase brand loyalty.

If You Build a Branded Online Community, Will Customers Come?
Jeff Zabin, Aberdeen Research Analyst asked this question in a recent article of his on CRMbuyer.com. What follows in an extract from the article:

User groups take on a new meaning with the advent of social networking technologies, which provide the means for sharply heightened communication and collaboration. However, even with the best toolkit, the onus remains on the company to offer a value proposition that will make customers eager to participate. Despite the enormous popularity of peer-to-peer social networking, the adoption cycle for branded online communities has been relatively slow. That a growing number of consumer brands are transforming their existing static Web sites into interactive online communities is a trend that is not only recent, but also rapidly accelerating.

Today, companies can select from a number of private label, Software as a Service platforms as the basis for enabling online community features and functionality, as well as for managing customer activity and performance reporting."

Treating Customers as Codevelopers – Motorola
One of the key benefits of branded online communities relates to the idea of treating customers as cocreators or codevelopers. With the advent of social networking, companies can further automate and expand their efforts to involve customers in the innovation process. For most companies, innovation is the only sustainable competitive advantage; hence, the importance of opening a window onto the unmet wants and needs of customers -- and even soliciting their direct input into the ideation of future products and services.

Beyond fueling continuous innovation, customer input into the ideation process provides some assurance of sufficient market demand once the new product or service becomes available. Many companies have enjoyed considerable success in this area, engaging their online communities in such a way that they become an additional voice into the product development lifecycle.

Consider Motorola (NYSE: MOT), which has longed viewed its customers as codevelopers. In December 2008, Motorola launched an online community platform, developed by IGLOO Software, to facilitate conversation and support the specific needs of its Enterprise Mobility Systems customers. The customer user groups include the Trunked User Group, for public safety employees who use two-way radio systems, the Mutual User Group, which serves the needs of utility workers, and the Mobile Data User Group.

Members of these user groups previously came together once or twice a year in face-to-face meetings to discuss issues related to their mobile communications systems, according to Connie Allen, consultant events manager on the global marketing team. Once the meetings concluded, the issues tended to go into a black hole, simply because it was difficult to sustain the conversation and facilitate the necessary follow-up.

"They sometimes got angry because there were so many issues and they thought Motorola wasn't listening to them," recalled Allen. "It became imperative to show that we were listening to them."

Motorola devised a report card to track issues and demonstrate progress. The problem was communicating the results. "We were using an internal tool that was atrocious," said Allen. "It was built for purchasing, not for social networking. What we needed was a simple, barebones platform where both customers and Motorola could communicate outside of our face-to-face meetings. That was really the main intent."

The platform, which currently has about 1,100 active customers, has evolved into a long-term solution that serves as a virtual home outside of user group meetings. Although still in its infancy, the online community has already exceeded expectations in terms of benefits.

"It enables customer-to-customer thought sharing, as well as Motorola-to-customer and customer-to-Motorola thought sharing," said Allen, noting that it also drives employee productivity. "Time and cost savings are huge benefits."

Of course, the main goal of the user groups is to keep customers loyal to Motorola so that they won't entertain competitive bids for the multimillion dollar systems. At the same time, the platform facilitates cross-sell activity, simply by virtue of having the different user groups colocated on the same platform. Users of two-way voice radio communications are being exposed to products related to broadband wireless networks, for example. A customer may stumble across a promotion for mobile data terminals and start thinking about using data systems for, say, license plate recognition.

Users are increasingly using the platform to post the minutes from their own technical meetings and to explore ideas they want Motorola to pursue. Motorola views the consumer-generated content as an indispensable guide for new product development road maps. "The online community gives us input into what customers are going to want in the pipeline five years from now," said Allen.

Although in early stages of customer adoption, online communities and social media presents new opportunities to connect with customers and prospects, build trust and increase brand loyalty.

Other significant benefits include:

• Increased customer advocacy
• Customer insights generation
• Customer support cost reduction

Discover how your organization can drive and leverage the social interaction within online communities to realize significant business benefits. We invite you to download the IGLOO sponsored Executive Webinar, featuring Jeff Zabin, Aberdeen Research Fellow. Along with Dan Latendre, CEO of IGLOO Software, and Connie Allen from Motorola, Jeff will explore the technologies, business processes, organizational resources and performance metrics that Best-in-Class companies are implementing today in order to fully harness the power of branded online communities.

Access a recording of the webinar.