New Research on Hard Benefits of Online Customer Communities

According to a 2011 survey, almost 50% of the top 100 global brands host some kind of network or community but are there any indications that these investments are paying off? Strategy and Business Magazine have just published an article which suggests the answer is "YES".

Dollars

S + B reviewed a research paper published by The Ross School of Business in January 2012 which tracked the impact of company community membership on the amount of money members spent on the firm's products and conclude:

"Although based only on a single case study, the results appear to be a significant affirmation of the economic value of these networks: The authors found that revenue from members increased by an average of 19 percent after they joined, a result of closer ties with other customers and more engagement with the company".

The research authors go on to say "We find that social dollars represent about 19% of revenue once customers join the online community. These social dollars arise primarily via more frequent orders with the firm, rather than increased shopping basket sizes."

This is just one type of online community and a one-dimensional perspective on its benefits but nevertheless it is very encouraging to see that there are real hard benefits to be found beyond all the hype.

Read A Big Payoff from Online Company Communities

Read the full Research Paper: Social Dollars: The Economic Impact of Customer Participation in a Firm-Sponsored Online Community


About Ken Thompson

Ken Thompson delivers keynote conference speeches, workshop facilitation and in-house consultancy in four key business areas:

  1. Creating High Performing Teams in enterprises including Virtual and Mobile Teams (based on the Bioteams Book)
  2. Establishing effective Collaborative Business Networks enabling companies to co-operate effectively in areas such as sales and product development (based on the book - The Networked Enterprise)
  3. How to use the latest social media technologies including blogging and online communities to promote enterprises, brand, organisation or event
  4. Development of graphical on-line interactive Business Dashboards and What-if Simulators for organisations to support Performance Improvement, Strategy Development and Executive Team Development.


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Crucially the value of customer communities is a measure of good will. Something no one's been able to calculate, but now it's something that actually drives up share price.

 


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