A lot of people might say that the secret sauce of communities is conversion, lower cost of advocacy, lowered support costs, faster information discovery, etc and they would not be wrong.  Communities – done well – can drive a lot of specific business outcomes in a sustainable way while reducing the long-term costs. And for the most part, that is how they are currently being planned and deployed but there is a much bigger, larger value communities can provide to enterprises. Real-time data. And I’m not just talking about traditional market research which also can benefit from a community approach – see Forrester’s take or this overveiw.

What I’m talking about is using communities to make the interface between the discussions going on within the organization much more permeable to the conversations going on outside of the organization. One of the biggest risks to medium and large organizations is they become relatively self-absorbed – there are so many people with functional roles that never even speak to external audiences and are so focused on the internal processes and politics that it is quite easy to miss the forest for the trees.

My background is in product management and I’ve done it for both enterprise and consumer oriented technologies and both have large cost barriers to customer input.  With enterprise customers, customer input often involved visits with our largest customers where I spoke with the business owners and a few of end users. In terms of time and cost I couldn’t visit all my customers or speak to even a good fraction of the end users of the product. That meant my job involved a lot of inferencing to define priorities based on a small sample size. Once the research/input phase was over we typically didn’t go back to customers until we had a working beta product. At that point we could adjust functionality but unless the product was a complete disaster (luckily that never happened), major features were not changed.  On the consumer end of things, there were so many customers that we got our input in two ways – testing mocked-up product designs with a random sampling of end users and aggregating issues that came through our customer support and online forums.  That too required a lot of infrencing to fill in the gaps and to notice issues that were not even being brought up.  In my own way, I tried to ask customers as often as possible when I had a decision to make but I did not have a standing group that I could reliably go to on a daily basis. The result is that there were often long-winded internal debates between marketing, product management, and engineering about what was the best solution and none of us were using anything more than our experience and opinion to argue our position. Some of that will never change – one thing you learn in product management is that people have a difficult time self-reporting and imaging solutions that don’t exist so that will always be part of the role of product management. However, the transactional mode of input is expensive and not just for organizations. Once we identified a customer willing to talk to us, they were often barraged by questions marketing, support, product management and executives. The process was costly on both ends. And this is just an example of how product management suffers because of the high cost of customer input.

Robust customer/prospect/partner communities which are available and can be accessed by all functional areas of a company can bring huge benefits:

• Employees who may not otherwise talk to customers directly or are restricted in which customers they speak with and when, can lurk and in so doing get a much better sense of the customers’ perspectives and context which ultimately allows each employee to make better informed decisions.
• Employees that need customer input for a decision can ask the community in a way that allows customers to opt-in rather than be asked directly again and again.  While this dynamic has some risks to be aware of it does broaden out access to more customers and respects customers’ time and interests.
• An organization’s content creators – in marketing, support, engineering – can get almost immediate feedback as to whether their approach resonates.  This can reduce an incalculable amount of wasted effort and expense.
• If a good percentage of customers and prospects are in the community, behavioral and conversational data will enable early warning of market changes whether that is change in demand or change in need. This benefit will go primarily to the first mover in every market if they are able to aggregate the market conversation.
• Inviting in partners and giving them tools to market and transact business within the community will provide organizations a much better understanding of affiliated demand in their ecosystem which is often another way to get early information about market direction.

We are hearing from companies that have dramatically improved their products, reduced excess inventories, and reduced waste at the end of the supply chain simply by using relatively small customer communities to provide real-time insights at every step in the process – it’s as simple and as complex as integrating customers into the process.

It will require a number of things:

• Broad employee training on listening, empathizing, how to ask questions, and on corporate policies and boundaries.
• The trust of executives in their employees judgment in speaking with prospects and customers (this in turn, over time, will shape hiring priorities and practices significantly).
• A rethinking of major operational processes. Really listening to customer feedback requires making changes that disrupt predictability which is the primary tenant of many corporate processes. How can you incorporate some flexibility while still managing complex and expensive corporate processes?
• A change to corporate incentive structures to something more collaborative is needed. All functional areas should primarily be oriented toward customer success and renewals vs. more myopic functional-specific targets.

The first step, however, is aggregating and reporting on the current information coming out of communities in a way that is useful to a variety of employees. We’ve got a long way to go but strategically, if you are not considering real-time data integration from the external market into your organization’s daily decisions as your ultimate goal, you will be limiting your vision of value communities can generate.

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