The new value proposition to connect customers
The economy is officially in recession, and all signs point to at least another year of tough times. Consumer spending is down. The housing market remains depressed. And financial institutions continue to face serious challenges. For a lot of us, the ongoing economic crisis is going to require some belt-tightening.
The situation may be difficult, but if there is a bright side, it’s that economic downturns tend to shake things up. And in my mind, that spells opportunity—at least for the businesses that are willing and able to adapt.
Over the past few years, social media have begun to transform the way businesses connect with their customers. Consider the proliferation of company profiles on LinkedIn, Facebook and Twitter, for example. But these tools were not designed for business, making the leap from buzz to business results difficult at best. And now, more than ever, the business world is clamoring for results.
In this climate, I predict that the role of social media in the business world will accelerate. The focus will turn from consumer-facing networks to company-sponsored online communities, where every facet and feature is fine-tuned to a business objective. I believe this for two reasons.
The first is related to budgets.
In every downturn, there are fewer resources to go around for marketing, customer care, product development and other departments. Yet these areas hold the keys to sustainable revenue. When forced to trim the fat, these functions must find more efficient ways to achieve the same—or better—results. At just the right time, it seems, company-sponsored communities are emerging as a cost-effective solution. More and more companies are launching online communities as multi-faceted channels that breed loyalty, yield market insights, deliver sales leads, and enable peer-to-peer support. Gartner estimates that 60 percent of Fortune 1000 companies will use an online community for customer relationship purposes by 2010.
The other reason for my belief in the importance of community is customers.
With the Internet as their soapbox, customers have changed. According to Netpop Research, 40 million people in the U.S. now contribute to social networking sites. Customers today research before they buy. They trust peer recommendations. They voice their complaints. And they expect more from companies – a more authentic brand experience, higher levels of engagement and more personal support than many companies are prepared to offer. Forming a community—where members can connect, contribute ideas, and more directly influence the brand—is an increasingly important part of engaging and energizing this new kind of customer.
Consider one of our customers. TrackVia is an exciting online database software provider and another Colorado startup. TrackVia’s powerful database offers all the data organization, access, query, and analysis capabilities you can find in a traditional relational database—and it’s offered as a service online.
It’s a perfect business model for a customer community. TrackVia’s product provides sophisticated functionality that can address a variety of unique business use cases—from real estate listings to call center management and beyond. So it made sense to give customers a place to seek support from product experts and share all the knowledge they accumulate.
Today, the company is using its community (called TrackVia Web Community) to allow customers to share ideas, find quick answers and discuss best practices for exercising the full potential of their online database product. Because customers contribute, they form a peer-to-peer support network that continues to grow.
It’s a strong value proposition to customers, and it allows TrackVia to extend its relationships with them. Plus, there are benefits they didn’t foresee, including collaboration on new product features and product development in general.
TrackVia is a good example of a business that recognizes the long-term importance of community, especially in such a volatile economic environment. Community keeps our attention focused on the customer, where we can foster greater loyalty, gain deeper insights, and drive continuous innovation. It goes beyond the social technology du jour and drives specific goals, which is why the companies that do it right will emerge stronger than ever. n