Friday, October 13, 2006

Putting Value on Building Community

I spent a little more time at yesterday, finishing up my tour of the exhibit hall. One set of vendors that caught my eye were those helping companies to engage with customers outside of the normal purchasing process. These include services that let customers write and post product reviews, from Bazaarvoice ( PowerReviews (, and on-line customer training from Powered (

Such applications are not new, but they highlight the importance of experiences that treat customers as part of a community. This is critical to moving from satisfaction--which a customer can have with many competing vendors--to customer loyalty, which a customer can only feel for only one firm in each category. In this regard, it’s worth noting that the many shopping comparison services at the show, which also include vendor and/or product ratings, tend to reduce loyalty by leading buyers to purchase from the multiple sources.

Community appears throughout the Customer Experience Matrix. It can be a channel (users group or fan club meeting), an activity (writing a review or receiving training), or an experience objective (build community involvement). This may seem confusing but the meanings are distinct enough that they should be clear in context. We reuse the term on purpose, to highlight something that is often overlooked because it doesn’t generate direct revenue and isn’t demanded by customers. Even the official “Community Affairs” department in most organizations is more likely to focus on relationships with external stakeholders (politicians, neighbors, etc.) than the company’s own customers.

This is where the ability to measure the long-term value of each interaction becomes important. Most managers would assume that customers who write product reviews or benefit from online training are more likely than others to purchase again. But unless manager know how much these activities change in future value, they can't determine what it’s worth to invest in them. Since all opportunities within an organization compete for resources, being able to quantify the value of community is essential to supporting it.

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