Is your online customer community damaging customer loyalty?

Editor’s note: Terry Vavra and Doug Pruden are partners at research firm Customer Experience Partners. Vavra is based in Allendale, N.J. Pruden is based in Darien, Conn.

A wonderful trend has developed over the past few years. Thanks to the rise of social media, many corporations are actually doing a better job of listening to and interacting with their customers. They are using customer feedback: to help develop new products and services; to identify areas in which they must improve their product/service experience; and to better understand consumer expectations and therefore the competitive marketplace.

Online customer communities: the promise
A number of corporations have taken social media a step further by forming ongoing, online communities among their customers. These private communities offer corporations ready access to customer feelings, reactions and ideas that would, prior to the Internet, have been exorbitantly expensive and resource consumptive. And they provide a receptive, qualified, known user panel with which to address issues previously requiring expensive marketing research events.

While unfortunately not the primary objective of most of these private online customer communities, potentially there is also a relationship-building aspect to these communities. If properly addressed, corporations can nurture these current customer community members – turning them into even more loyal advocates of the sponsoring brand. They can become more knowledgeable, more motivated communicators both within the communities and beyond (both online and offline).

Online customer communities: the potential damage
But if not properly cared for there can be a dark side as well. Perhaps it should be obvious, but the online customer community becomes a component of the total customer experience. If the members become disenchanted with the community, if they feel that they are being used by the corporation, if the community becomes a bore, then the sponsoring corporation risks losing some of its best, solid, loyal customers.

Compounding the potential threat, a poorly managed community could be worse than never having a community at all! The type of customers who typically become community members are outspoken, active participants in other online communities as well. They are the worst people to cross. Should they become disenchanted, they are generally well prepared to loudly and clearly vent their frustrations with plenty of negative word-of-mouth. A poor experience can turn these prior advocates into highly vocal detractors and complainers.

Monitoring behavior is part of understanding the health of the community, but when it comes to being certain you are delivering a positive experience that helps to retain loyal customers, it’s basically a look in the rearview mirror. Corporations need to combine both behavioral and attitudinal measures to be certain that their private online customer communities aren’t providing “free” research at the cost of damaging customer loyalty and generating negative word-of-mouth.

This entry was posted in Market Research Best Practices, Marketing Best Practices, Research Blogs and Communities, Social Media and Marketing Research, The Business of Research. Bookmark the permalink.

2 Responses to Is your online customer community damaging customer loyalty?

  1. I’m glad to see you exploring the question of what impact private communities have on the long-term customer relationship. In the over 400 private online communities that we’ve run at Communispace, we’ve certainly seen the dynamic that you describe, which is that community members feel increasingly loyal to the sponsoring brands because the community experience makes them feel heard and valued. (See for our research on this topic.) And I’d also agree that those companies who mismanage their communities — by not authentically engaging and interacting, by not being transparent, by trying to shut down criticism rather than encourage and learn from it — can quickly turn off the community members they’ve gone to such effort to recruit. However, I don’t agree that the people attracted to the online community experience are those who are already most active in social media, and thus the “riskiest” people to engage. On the contrary, those most active in our communities are often people who are not the hardcore, vocal fans or detractors, but rather, the vast majority of people who only invest the energy in expressing their views when they’re confident that someone is listening, and that doing so is likely to have an impact. And delivering a positive experience need not be a look in the rear-view mirror. On the contrary, the members’ willingness to take ownership of the community by initiating their own conversations and feedback, their sense that they are being heard, and the brand’s willingness to close the loop, i.e. to echo what they’re hearing from customers, and to be transparent about what they are and are not going to act on, are all measurable, actionable, real-time measures (and guarantors) of a community’s health.

  2. Sorry for the HTML gone awry. I really didn’t mean for the posting to be underlined (sigh). Rather, I just wanted to link to our white paper, What Companies Gain from Listening, which can be found at http://www.communispace.com/Research/ResearchAbstract.aspx?id=539

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