Online Business Communities have rapidly become a competitive marketplace. Companies are investing millions into their own communities, and with mixed results.
According to a recent article on SocialMediaToday.com, author Jerry Bowles writes several giant corporations have launched online business communities aimed at engaging small business owners and managers through a conversational social media approach and lists more than half a dozen companies having invested $1M to $5M each into their Online Business Communities. Membership counts in these online communities range from single digits to tens of thousands. Time obviously a major factor for low member counts, but not the only reason.
Sites such as LinkedIn and Plaxo which are universally geared towards Online Professionals and fall in to the Social Networking category generate a lot of buzz traffic and offer a useful way to keep connected with close and distant contacts have an advantage in that they are not tied to a tight niche market or industry. Online Business Communities for big corporate well-known and established companies such as those listed in Bowles article, e.g. American Express, Visa, Dell, Intuit/QuickBooks, have the luxury of pre-exisitng large member groups with common and also recurring needs and interests specific to those organizations and their products also have an edge with their Online Business Communities because of those factors.
But one category of Online Business Communities to question are those in the niche market segments or industries that are starting up. We touched on the subject a couple weeks ago with DrivingSales.com, but there are others. The challenge with such Online Business Communities is their unique value proposition. Without an actual product or service, what are these online communities accomplishing? What can they do to develop and keep an audience aside from developing an audience for the sake of it?
Bowles makes some excellent observations that are good take-aways from his article which such all communities must consider.
3. The quality of the content of a web community trumps the most well-financed demand generation program. No amount of promotion can keep people coming to a community that is not engaging and useful.
6. Participants in smaller business communties are more engaged and likely to participate than those in bigger communities so make your community only as big as it needs to be. Two thousand engaged and qualified potential customers is better than a million page views.
8. That leads to what I modestly call Jerrys corollary: the online communities that are most likely to succeed are those that are focused narrowly on engaging buyers of specialized, high-end products.
A concern with Online Business Communities that sprout from venture capital and which are designed for niche market segments and industries rather than evolving naturally from its customer audience is that through mere idealism they are putting the cart before the horse so to say in that they expect a software communications system to perpetuate the need for a business model.
MySpace evolved out of the need for bands to promote themselves which led to widespread popularity in promotion of individual persons. Facebook evolved that commodity into a more marketer-friendly environment. Both of these catered to a specific generation (or two). LinkedIn honed that down to a universal class of people, i.e. Online Business Professionals. But these sites are ultimately appeal to millions which is what gives them a chance to be successful.
Banking your model on something that will only appeal to a few thousand people makes for tremendous challenge. It limits advertising capabilities and puts you at the disadvantage with conversions and numbers.
This entry was posted on Monday, August 4th, 2008 at 10:55 pm and is filed under Social Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
According to a recent article on SocialMediaToday.com, author Jerry Bowles writes several giant corporations have launched online business communities aimed at engaging small business owners and managers through a conversational social media approach and lists more than half a dozen companies having invested $1M to $5M each into their Online Business Communities. Membership counts in these online communities range from single digits to tens of thousands. Time obviously a major factor for low member counts, but not the only reason.
Sites such as LinkedIn and Plaxo which are universally geared towards Online Professionals and fall in to the Social Networking category generate a lot of buzz traffic and offer a useful way to keep connected with close and distant contacts have an advantage in that they are not tied to a tight niche market or industry. Online Business Communities for big corporate well-known and established companies such as those listed in Bowles article, e.g. American Express, Visa, Dell, Intuit/QuickBooks, have the luxury of pre-exisitng large member groups with common and also recurring needs and interests specific to those organizations and their products also have an edge with their Online Business Communities because of those factors.
But one category of Online Business Communities to question are those in the niche market segments or industries that are starting up. We touched on the subject a couple weeks ago with DrivingSales.com, but there are others. The challenge with such Online Business Communities is their unique value proposition. Without an actual product or service, what are these online communities accomplishing? What can they do to develop and keep an audience aside from developing an audience for the sake of it?
Bowles makes some excellent observations that are good take-aways from his article which such all communities must consider.
3. The quality of the content of a web community trumps the most well-financed demand generation program. No amount of promotion can keep people coming to a community that is not engaging and useful.
6. Participants in smaller business communties are more engaged and likely to participate than those in bigger communities so make your community only as big as it needs to be. Two thousand engaged and qualified potential customers is better than a million page views.
8. That leads to what I modestly call Jerrys corollary: the online communities that are most likely to succeed are those that are focused narrowly on engaging buyers of specialized, high-end products.
A concern with Online Business Communities that sprout from venture capital and which are designed for niche market segments and industries rather than evolving naturally from its customer audience is that through mere idealism they are putting the cart before the horse so to say in that they expect a software communications system to perpetuate the need for a business model.
MySpace evolved out of the need for bands to promote themselves which led to widespread popularity in promotion of individual persons. Facebook evolved that commodity into a more marketer-friendly environment. Both of these catered to a specific generation (or two). LinkedIn honed that down to a universal class of people, i.e. Online Business Professionals. But these sites are ultimately appeal to millions which is what gives them a chance to be successful.
Banking your model on something that will only appeal to a few thousand people makes for tremendous challenge. It limits advertising capabilities and puts you at the disadvantage with conversions and numbers.
This entry was posted on Monday, August 4th, 2008 at 10:55 pm and is filed under Social Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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