By Leon Leong

BY ENGAGING their customers and target audiences through online customer communities, organisations are able to gather a significant amount of information about their customer base.

They can use this information to develop both short and long-term customer relationships. For example, a company could use this information to better develop customer support and feedback, product innovations, loyalty management, marketing campaigns and overall customer experience management.

Over time, this serves to improve customer satisfaction, increase customer acquisition and, ultimately, maximise profits. We estimate that 25 per cent of established companies are currently connecting with or hosting some form of online community, and this figure can only grow.

One example of engaging online communities was demonstrated by PC manufacturer Dell. Customer service problems in 2005-2006 caused Dell's business to decline. Dell made aggressive moves to better engage its customers through online communities and social media.

It set up the Dell Customer Community (a platform for customer service and support), Dell IdeaStorm (a platform for customer ideas sharing), Direct2Dell (Dell's corporate blog), and social media tools like Facebook and Twitter.

Dell's efforts paid off. Negative commentaries on the Dell customer community dropped from 49 per cent to 22 per cent. 7,000 ideas were generated from the community, and Dell chose to act upon some of them to its significant advantage.

Dell presently reaches 3.5 million people across the Web, through its own community sites and social media tools. Last December, Dell announced sales of US$6.5 million via customer engagements and promotions on Twitter.

Here at home is Lazy Gourmet, a popular local restaurant chain that produces food in frozen packs. Lazy Gourmet engages its customers and prospects via its website, e-commerce portal, e-newsletters, as well as Facebook.

This allows it to easily disseminate information and promotions, solicit feedback and ideas and finally derive online sales. Within just half a year after its launch, it had sold 10,000 food packs, with about 10 per cent of the sales coming from its e-commerce portal. Lazy Gourmet is presently launching discount initiatives and a series of community features on its website, to further build up customer loyalty.

Local kayaking school PaddleCulture.com connects its students through an online customer community. Hosted on this community are photos and videos from kayaking lessons, blogs, online course enrolment and other member interactive community functions. This creates an immersive experience for students and useful feedback for PaddleCulture.com, to fine-tune the delivery of lessons. Since launching its online customer community last August, PaddleCulture.com has seen a 300 per cent increase in revenue.

In setting up customer communities, it is more about the strategy and execution, than the underlying technology. The actual strategy and execution varies, based on unique business requirements, internal processes and operations, target audiences and customers, and products/ services. It is essential for businesses to keep an open mind and at the same time, be mindful of unique constraints. Offerings of a customer community vary, but some of the more noteworthy ones include:

• A Customer Support Knowledge Forum. This empowers customers to raise support-related issues with a community of customers and support staff, and receive crowd- sourced insights. Resolved questions and issues are archived for customers to easily access frequently-faced problems and solutions, to save time for themselves and the business, as well as achieve greater satisfaction. This can help lower operational costs. Research has revealed that live support costs 87 per cent more than online support, and customers report good customer experience in forums twice as often as they do on live support. Ideas and Feedback Sharing. Products are designed to appeal to customers. Hearing what your customers desire enables more focused and strategic product development efforts. There is no better avenue than starting an idea generation process among your customers and harvesting feedback, through live testimonies to other customers or useful feedback for product development.
• Real-time Instant Messaging. Often, customers need information right away. Real-time instant messaging offers on-the-spot communications. This level of engagement builds trust and credibility, both pre-sales and post-sales.
• E-Commerce and Social Recommendations. Online product sales are not new. But with communities and social enhancements, an almost totally different purchase experience is possible. Through automated background social analysis, an e-commerce portal can potentially suggest products to customers, based on profile similarity with a group of purchasing customers in the community. Customers looking at a particular product could also be advised on products purchased by other customers, who also purchased that particular product. Other social permutations are possible and this again varies across businesses.
• Online Community Marketing Campaigns. The online populace unleashes a mass of potential audiences that can be reached in a short span of time. Pivotal in social media and online community marketing campaigns is the strategy and its match with target audiences. The goal is to create viral word-of-mouth communications to advertise and publicise your business, products and services.

Clearly, the advent of online communities and social media is drawing organisations to start exploring new ways to take their businesses to the next level. In time, competitive advantages will increasingly depend on how successfully organisations are able to execute online customer communities and social media strategies.

The writer is sales & marketing director of Techsailor, which helps companies attract and retain clients via building Web communities. Techsailor is being incubated by NUS Enterprise.

This article was first published in The Business Times.