Value of Online Communities Yet to be Realized

Aug. 7, 2008
Communities are not well populated and haven't yet engaged the audience

While companies sponsoring online communities indicate that enterprises have begun to effectively use social media tools and online communities, they have not yet harnessed the true potential of these communities. Deloitte's '2008 Tribalization of Business Survey,' conducted in conjunction with Beeline Labs and the Society for New Communications Research, found that companies are using these communities to engage with customers and employees for brand discussions, idea generation and product discovery. But a majority of the communities have fewer than 500 active members, and 50% of the respondents replied that the biggest obstacle to making communities work is getting people engaged.

Notwithstanding this challenge, companies reported a significant impact from their communities. Of the companies surveyed, 35% have seen an increase in word-of-mouth for their brands, and 28% have seen their overall brand awareness increase. Online communities are also helping companies increase customer loyalty and bring outside ideas into the organization faster, according to 24% of survey respondents.

"Communities can extend the edge of the corporation in truly transformative ways - tapping into new talent, helping design products and services, providing customer support and, most importantly, building the brand with the customer," said Ed Moran, director of product innovation, Deloitte Services LP. "The survey data points to some growing pains, but companies are starting to see that online communities should be nurtured and leveraged for real business gain."

These communities can be used as a seedbed for innovation. Indeed, 39% of the companies that participated cited "idea generation" as the purpose of their online communities, and 19% cited "new product development" as the key goal.

A leading technology company is also using communities as a means of customer support by monitoring communities as an early warning system for product issues that can be expected to hit the help desk and prepares to respond accordingly.

"Communities provide insight into new features and opportunities, identify customer needs, and enable open innovation," added Moran. "By participating in these communities and facilitating a bi-directional conversation, companies can help engage top prospects and influence purchase decisions."

The tribalization of business is all about "people helping people," where those who share a similar passion turn to each other for information, recommendations and community feedback. Sixty percent of the survey respondents indicated that their communities are open for public interaction and feedback.

According to survey respondents, the community features that most contribute to community effectiveness are:

  • Ability for community members to connect with like minded people -- 53%
  • Ability for members to help others -- 43%
  • Community focus around a hot topic or issue -- 41%

Conversely, poorly managed online communities are a critical barrier to their effectiveness. Forty-five percent of respondents recognize that finding enough time to manage the community is one of the biggest obstacles to making communities work. Survey respondents also see facilitation (25%) and quality of the community manager (34%) as two features that greatly impact the community's effectiveness, making it critical for companies to devote the necessary resources to this important role.

For additional insight on enterprise community best practices, visit Deloitte Center for Edge Innovation Co-Chairman John Hagel's blog:

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