Research

Why online communities are growing—and how you can get more from them

Why online communities are growing—and how you can get more from them

Online communities have become a necessity in today’s business world. To appreciate just how dominant they have become, consider these stats:

  • According to Forrester Research’s 2015 Customer Lifecycle Journey report, 81 percent of companies now have community-type support channels—a steep increase from 2012’s 67 percent figure.
  • The 2015 edition of the GreenBook Research Industry Trends report shows that 50 percent of market researchers now use online communities. An additional 34 percent say they’re considering launching online communities for research purposes.
  • The social business market, which runs largely on community platforms, is expected to reach $23 billion by 2019.
  • Advisory firm IDC expects the worldwide online communities market to reach $1.2 billion by 2019, representing a compound annual growth rate of 24.3 percent.

Why online communities are growing

Several factors are driving companies to invest billions of dollars into online communities, both in public versions (like those hosted on social media sites) and private ones (those operated by brands on special community software).

1. Customers demand a seat at the table.

According to Forrester Research, we are now living in the age of the customer—a time when customers, not brands, control the business agenda. Technology and social media has given more power and influence to customers. More than ever, customers want to have a voice and influence business decisions.

That’s why, to remain viable, companies need to build stronger customer relationships. Online customer communities allow businesses to authentically engage and forge a more meaningful bond with customers.

2. Communities reduce business costs and drive sales.

Some types of online communities enable customers to seek help from customer service teams or from other consumers in open forums. This creates a win-win situation where customers get solutions to their problems quickly, while reducing customer service costs for companies.

Other types of communities help companies generate direct revenue. “By building a branded online community, companies are able to establish a virtual marketplace where they can promote directly to their customers,” says Sean Bryant, marketing director of user database company Inversoft. About 50 percent of companies with online communities use them to upsell and cross-promote products, according to Inversoft.

3. Companies need instantaneous feedback and insight.

Customer-centricity is not just a buzzword today; it’s an imperative to marketing, product innovation and customer experience success.

“Ever faster innovation cycles and a more dynamic competitive landscape require bringing your audiences in earlier,” writes Malin Liden, vice president of digital experience at SAP, in a recent article for Forbes. “Communities make them part of developing the future of your company.”

“Community members are easy to access and quick to respond—offering great opportunities in situations where immediate feedback is needed.”

The need to gain insight frequently and early in the innovation process means companies need on-demand access to their customers.

“Community members are easy to access and quick to respond—offering great opportunities in situations where immediate feedback is needed,” explains Kristopher Arcand, data analyst at Forrester Research, about the role of online communities in the research process. Companies that have active communities can lean on their customers for co-innovation projects and to validate business ideas.

Not all online communities are equal

The growth of this market shows that companies are seeing ROI from establishing online communities. That said, not all types of communities drive business results in the same way. When it comes to gathering customer intelligence, some types of communities are more effective in harnessing customer feedback systematically.

To get the most ROI from your online community, you need an understanding of the different types of communities available, as well as their strengths and limitations.

In The Enterprise Guide to Online Communities, Tyler Douglas, chief sales and marketing officer at Vision Critical, identifies four types of communities many businesses use today:

1. Social communities. Perhaps the most popular type of communities, this category includes household names like Facebook, Twitter and Instagram.

2. Support communities. These are curated communities where members can talk to each other and offer tips to other customers. Examples include Jive-X, Lithium and Salesforce Community Cloud.  

3. Advocate communities. Software as a Service (SaaS) companies like Influitive, Augure and Tapinfluence allow brands to mobilize their current customers to advocate for their brand.

4. Insight communities. Made up of carefully selected group of customers who maintain a long-term relationship with brands, insight communities allow companies to get high-quality feedback and insight from a group of highly engaged members. Vision Critical’s customer intelligence platform is an example.

Given their ubiquity, your company is likely already relying on intelligence from online communities. A more in-depth understanding of what online communities can and can’t do for your company will help you get more out of communities.

Download the guide to discover the true value of online communities and how you can choose the right online community to support your business objectives.

Enterprise Guide to Online Communities



Subscribe to the Vision Critical blog

Get free customer intelligence tips and resources delivered weekly to your inbox.

By completing this form you consent to receive emails from Vision Critical. You can unsubscribe at any time. Learn more in our privacy policy.