The Benefits of Creating an Online Community

James Davidson

A new class of company is emerging—one that uses collaborative technologies intensively to connect the internal efforts of employees and to extend the organization’s reach to customers, partners and suppliers…”

This quote from a McKinsey study has always resonated with me as I consider the benefits and impact that online communities have on the way business is done. In today’s competitive marketplace, companies are working to maximize their opportunities and define the underlying strategy of embracing an online community to connect, engage and extend relationships with customers, employees and partners. From high-tech to higher education, online communities have a strong use case in most verticals, so long as the strategy is driven by business objectives and audience needs, and aligns with existing processes and systems.

And communities play an even greater role for today’s most innovative companies, who need to build Intelligent Experiences that match consumer expectations with the features and functionality that communities help enable. But before you work on leveraging the hyper-relevance and data-driven insights that Intelligent Experiences unlock, you must first understand the basic benefits and role that a community plays for your users.

What is an Online Community?

An online community is a gathering of people interacting and collaborating toward a common goal. These days, companies are investing in building communities on open social networks, while also building their own community properties. While similar, there are fundamental differences between a social network and an owned online community destination.

This table will help illustrate some of the major differences between open social networks and an owned online community:

Open Social Network (e.g., Facebook, LinkedIn) Owned Online Community (e.g., Apple Support)
Connections: Driven by relationships Connections: Driven by interests
User Experience: Standardized user experience: one size fits all. Noisy user-generated activity streams that can include ads from your competitors. User Experience: Engineered and personalized user experience with content constructs. Can include tailored dashboard, views and activity streams.
Content: User-disclosed information which can be unverified e.g. name, company, location Content: Combination of sourced and user-disclosed information that can be verified against your data (e.g. CRM)
Data: Limited to no access to member data Data: Ability to own and analyze member activity to generate insights
What Are the Benefits of an Online Community?

While social networks have value in your customer experience, owned properties provide elements that social networks cannot. They provide a user-tailored design, enhanced access to data, and more options for control and integration of self-service for business processes spanning marketing, sales, service and support. A well-rounded social media strategy likely will include social networks such as Facebook, LinkedIn and Twitter in addition to owned online properties like a community. When a company builds its network on a platform like Twitter, they are locked into that technology company’s business model and changes. The user experience and the available data are based on what the platform is willing to provide—and that will probably have little to do with a company’s own objectives and needs.

Consider Facebook, a platform that has routinely changed its business model. In 2010, it leveraged Wikipedia to generate automated company listings for its launch of community pages, which resulted in many duplicate search results for those businesses that had already created a Facebook page in their quest to drive ad revenue. The change confused users and frustrated businesses that already had an established presence.

Then again in 2012, Facebook’s launch of Timeline for business pages relegated companies that had invested heavily in custom “apps” to a more limited user experience, thanks to the introduction of tabs. Tab viewership drastically decreased, rendering investments in apps as sunk costs.

With many Facebook fans never returning to your page after they click Like, the majority of a business’ followers never even see those tabs. Furthermore, while Facebook is slowly improving analytics, they still acquire far more data about a page’s followers than they will ever share directly with a company. An owned online community allows companies to control their own user experience while gaining full access to all user analytics, content and data that align with your strategy.

Depending on a company’s needs, owned online communities present multiple opportunities for enhanced business value. Based on a company’s objectives, they can create an experience to help them achieve their goals, whether that is reaching new customers or increasing internal efficiencies.

For the sake of simplicity, let’s focus on external communities—those focused on serving customers and partners. This chart offers a look at an online community’s illustrative benefits (please note that these are high-level and by no means exhaustive):

Business Area Illustrative Online Community Benefits
Sales and Marketing
  • Sales enablement: higher win rates
  • Improved marketing campaign development, effectiveness and amplification
  • Customer advocacy and product/service affinity
  • Improved natural search engine and social media optimization (brand and products/services)
  • Real-time market research and consumer intelligence
  • Increased channel presence, web sales and referrals
Customer Service and Support
  • Decreased volume of inbound support calls
  • Improved customer self-service/first-time resolution
  • Higher customer retention
  • Increased customer satisfaction
  • Ongoing customer support and engagement
  • Customer service agent collaboration/knowledge sharing
Product Development and Customer Intelligence
  • Accelerated time to revenue
  • Customer-driven product innovation and insights
  • Increase in feedback and ideas from customers/Knowledge retention
Where Should I Start?

If you’ve decided that reaping the benefits made possible by a community is the right approach for your business, there are four key steps to take to ensure success:

  1. Create a social business strategy and roadmap that carefully aligns with your company’s business objectives. All digital investments should drive toward a company’s business needs, including social networks and community building. Return on Investment (ROI) cannot be proven unless you know why you are investing and where to start. And with modern digital experiences and communities, measuring ROI by itself is rarely enough; it is now essential to also track your Return on Experience (ROX). Doing that will ensure you continue driving value from your community. 
  2. Investigate what your customers need. Identify your key stakeholders, from customers to employees, and define their pain points. Online communities that fail often do so because they do not effectively meet the needs of their intended audiences and experience lackluster adoption. An effective community will meet your business needs while improving the user experience of its guests and members.
  3. Integration is key to driving success. Some of the most successful communities are those that align with existing business processes and systems. Don’t create an experiment or a silo. Instead, think through operational and technical implications and put the online community directly in your user’s path while integrating with existing processes and systems. This is also the key to accurately measuring ROI!
  4. Create an activation and engagement strategy. If you build it, they will not come (or keep coming) unless you have developed a solid plan for activation and ongoing adoption. Communities often are not self-sustaining. Create a plan for getting people there, for ongoing content development, for communications, for training and for enhancements to continually evolve the community experience to meet user and business needs.

An owned online community offers benefits that go far beyond that of a mainstream social network. By developing a strong strategy and implementation plan, your business can harness the power of your internal and external audiences to improve your processes and results.

James Davidson is the Vice President of Vertical Strategy at 7Summits. He helps clients articulate their art-of-the-possible vision and shape their roadmaps, unlocking opportunities to integrate audiences to drive the greatest business value. James brings more than 15 years of experience in management consulting, global community and Salesforce delivery execution.

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