FEATURE1 December 2009

How online brand communities work

?Ever since the explosion of social networking, businesses have been trying to work out how online communities can be harnessed to help them grow and perform better. As with anything new, experimental activity is essential, but the varied uses of online communities, the inconclusivity of results and practitioners’ focus on the mechanism rather than the purpose mean that we are faced more with doubt and confusion than with a clear and coherent view of what their business role can be and how they work.

Verve has been working to develop a model to provide a clear discipline for how businesses can use online communities successfully. The study encompassed a review of existing literature and case studies, as well as primary interviews with a multidisciplinary group of practitioners, including clientside market insight and marketing, digital media experts and advertising and market research agencies.

Definitions and purpose
Online brand communities are an important new development for businesses because they enhance the organisation’s relationship with people. Not just with customers, but with anyone interested and active in their market – including employees, competitive brand users and market experts.

It is incorrect to call them ‘research communities’: a brand community can work for all business disciplines, even if a company chooses to use it for only one. And over time, its value will increase with compound interest as it engages members across all the company’s activities.

“The difference between a brand community and a panel is that members are allowed to have conversations of their own, on topics of their own choosing, with whoever they like, when they like – just as in real-life communities”

A new way to think of communities is as a medium, which means that (like TV as a medium, say) it carries content across multiple channels. The current channels are two: custom-built managed communities set up by or on behalf of a company, which are the main channel for research agencies and consumer insight departments; and existing open communities such as Facebook, accessed by businesses. Like all media, brand communities should be regarded as a permanent resource, which means that they are a major commitment, so it’s important to understand how they work in order that there is a clear discipline for using them successfully.

The difference between a brand community and a panel is that members are allowed to have conversations of their own, on topics of their own choosing, with whoever they like, when they like – just as in real-life communities. This leads to a shift in the conventional business model of stimulus-response to a new model of stimulus-stimulus, where a more engaged community member gives the company fresh stimulus to move forwards.

Participation is the new control
A huge concern for many businesses – and business people – is a perceived loss of control. It’s more productive to think of a change than a loss. Our mantra is: participation is the new control. If companies – including, especially, senior experts – engage in conversation online on member topics as well as on their own initiatives, they will be rewarded with more, better decisions, made more quickly. Stimulating wide participation of the community members is also important. Companies must give freely to ensure members feel rewarded and the community thrives. Participation is the oxygen of the community.

Researchers tend to overstate the importance of process. People do not feel more engaged because of the process, but because of the content. Information is the glue that binds a community together and keeps it participating. Content is king. It is because of the content they receive that people feel they are getting something valuable out of their involvement in the community, and it is because of the content they give, and the fact that this content is listened to and responded to, that people feel valued, which ensures their continued participation and strengthens their relationship with the organisation or brand.

Communities as a medium for surveys
In the case of market research and insight departments, the stimulus from the company to the consumer is surveys. Communities are a cost-effective, fast and sensitive fieldwork medium with the added value of getting priorities and language more in sync with what people actually do and want. We describe it as like having a group of your customers or market users in a room next door, who are there to discuss any topic that comes up. There are areas where communities obviously work better – customer satisfaction research for example – and others where one must tread more carefully (brand tracking can be affected by community activity), but experimentation is better than arbitrary restriction when exploring the role of this medium for research, because in principle it can encompass all research surveys.

From a research perspective, communities not only mean that you can do more research for less money, but also – the true benefit – that you can make more and better decisions on your business.

“Research agencies are the natural managers of communities, even when they are being used for marketing or other purposes”

Research as the fusion element
The new ingredient in all of this is conversations, but managing and using them is less scary than business people think. In normal life, no one has a problem decoding, prioritising or acting on conversations, and there is no special trick or technique required in doing so within a community. But it does require dedicated focus and discipline, which is a skill that lies within the insight department and its agencies.

Conversations are a live current running through the use of a brand community by any business discipline, so even if a community is being used for sales, marketing, new product development in the production department, or corporate social responsibility activity by management, these conversations need to be managed, listened to and acted upon. Which puts the insight department potentially right at the centre of a business in the future. And research agencies are the natural managers of communities, even when they are being used for marketing and other purposes. This is why we call research the ‘fusion element’ of any community.

Communities for generating brand advocacy
Marketing to an online brand community also requires a big shift in the conventional business model. The stimulus of the marketing department can be broadly categorised as launches. There is a great variety of things launched: ad campaigns, new products, PR stories, beta websites and so on. Marketing managers are used to controlling not just content but timing – launch upweights, bursts followed by gaps and so on. Marketing to a community needs a different approach (more ‘drip’ than ‘burst’ for communications, for example) to replace this highly controlled old model. But the stimulus provided to the community members will also result in a more engaged brand relationship – beyond brand commitment to the golden chalice of brand advocacy – that will go some way to achieving the age-old conundrum of translating engagement into behaviour. As for research, brand communities for marketing are an alternative additional medium, not a replacement for all other media in all cases, and communities are a better medium for small-scale, strong-response communications disciplines than mass market broadcasting.

What community conversations do in the marketing sphere is to initiate word-of-mouth – another target for this business discipline – which requires participation of the marketing team and management and analysis from the research department. One of the great things about how an online brand community works is that you can not only stimulate word of mouth but see what it consists of and track how it develops, particularly in the creation of company advocates, not just company advisers.

There are many other applications for every other department, best addressed individually but it’s worth highlighting the huge potential for new product development and the production department. New product failure rates remain embarrassingly high and brand communities (or an elite group within them) represent a hugely exciting opportunity to improve on this, as the success of beta websites from the likes of Google have illustrated.

The trick with multidisciplinary use of a community is not to muddy the waters by using the whole community to do everything all the time and to
be clear about what community members are being asked to sign up to do. Segmenting the community into general and ‘elite’ or special interest groups makes them more manageable, confidential and productive. Clear communication is an important part of community management by the agency that runs it.

An evolutionary process
The opportunity presented by online brand communities to businesses is well nigh unmissable. New media do not turn up often, and media that work across all business disciplines are rarer still. And embracing it need not be a daunting experience – it is important to see this as an evolutionary development for businesses. Evolution works by a series of experimental changes and that’s the route for businesses to follow. Research, as the fusion element, is a good place to start, if not the only place. Taking the first step, in full knowledge of how to do it, is the important thing. In this anniversary year of the first moon landing, one might say online brand communities represent one small step for a business, but one giant leap for businesskind.

Mike Hall founded brand and communications researcher Hall & Partners in 1992, which was sold to Omnicom in 2005. As a partner at online
communities firm Verve, he works to develop new propositions.

1 Comment

13 years ago

Mike Hall exagerates the role or potential role of Market Research. I know that is probably not what most market researchers want to hear, but it is true. In my 23 years of market research in both the US and UK, I have never seen a situation where market research is controlling or dictating anything that the larger organisation is doing. Market research budgets are almost always determined by Marketing and although Market Research is often provided with a specific budget to manage, they are still needing to obtain buy-in certainly and formal approval in many cases each and every time money from that budget is spent. I am finding it very difficult to see how communities somehow offer an opportunity to change this structure. In fact, I am reminded of a time in the mid 1990's when MMA (a company specialising in marketing mix modeling) came into being and began to compete with Nielsen and IRI (where I was in Analytics at the time). MMA succeeded by going directly to Marketing with an approach and toolset that Marketing could understand and use, an approach that neither Nielsen or IRI at the time had thought to take. The result was that Marketing instructed their Market Research department to work with MMA to provide these tools, and more money than ever before was spent on this endeavour because Marketing was won over and had the money to spend. One last point regarding communities. In Mike's article, there is mention of "more and better decisions" but there is also mention of "experimentation". Which is it? I would argue that it is experimentation at this point, I have yet to see any specific case studies or documented examples where a brand has set-up an online brand community, observed their interaction, and then made more and better business decisions as a result of this observation. If anyone has an example that can be shared, then this could help the industry begin to document the potential benefit and ROI of investing in an online brand community.

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