The Virtual Voice

By Michael Hardy | Winter 2012

Online Communities Can Be Valuable... If Companies Listen

In 2008, Starbucks’ website launched a new initiative called “My Starbucks Idea.” As part of the feature, actual employees of the coffee company—called “Idea Partners”—posted personal profiles to introduce themselves to customers, and website visitors were asked to suggest products they would like to see introduced at Starbucks stores.

In the project’s first year, customers submitted more than 70,000 ideas. By the end of that year, 94 were in development, and 25 eventually launched, including Starbucks VIA Ready Brew instant coffee, the Venti Travel Cup and tea lattes. The suggestions led Starbucks to begin offering free Wi-Fi and a complimentary birthday drink for My Starbucks Rewards program members. By allowing direct communication between employees and customers on its website, Starbucks burnished its brand and harnessed its customers’ creativity to improve its product line.

Constance Porter, Notre Dame assistant professor of marketing, has been studying virtual communities such as the “My Starbucks Idea” project for nearly 10 years. A virtual community is a group of individuals who interact online—via a website or Facebook fan page, for example—to share a mutual interest. In recent years, companies have tried to leverage the “mutual interest” aspect of these communities to build a loyal customer base and gain insight into consumer thinking.

The study by Porter and her co-authors, “How to Foster and Sustain Engagement in Virtual Communities,” published in the summer 2011 issue of the California Management Review, examines why some companies, such as Starbucks, Reader’s Digest and financial-software maker Intuit, have successfully nurtured virtual communities while many other companies have failed. The article argues that companies must demonstrate that they are listening to customers.

“Most companies don’t have a strategy for what they’re trying to accomplish with their virtual communities,” Porter says. “They put up a website and a forum, but don’t plan for what they should do after that. They think consumers’ activity will emerge organically. Sometimes it does, but if the marketer isn’t playing a role, then they’re missing out on value.”

It’s not enough for companies to merely engage consumers in virtual communities, Porter suggests. Instead, they must empower consumers to feel like they have a stake in the company’s success. By interacting with like-minded users and with company employees, customers can become “brand ambassadors,” she says.

Scholars have written extensively about marketing on social-media venues such as Facebook and Twitter. What distinguishes Porter’s work is her focus on how companies leverage existing networks of brand enthusiasts. For instance, her article discusses how the Jones Soda Company put together a Youth Advisory Board to provide input on business strategy; the restaurant chain Chick-fil-A invited its most loyal customers to join its Champions Panel; and Dell created IdeaStorm, an online community that, like My Starbucks Idea, solicits user suggestions.

However, IdeaStorm illustrates one of the risks of firm-sponsored virtual communities. When Dell did not respond promptly to the most popular user-submitted idea, one member posted a complaint that “Dell hasn’t got the message.” More than 300 fellow members piled on with comments in agreement.

“It’s hard for these corporations to take criticism from their customers,” Porter says. “However, in marketing, we know that stronger relationships between firms and customers are sometimes formed after a failure.”

That’s good news, since independent research suggests that around half of all Fortune 1000 companies that host virtual communities might actually be damaging their brand with poorly executed sites. Porter currently is studying three types of social media marketing—virtual communities, Facebook and Twitter—to determine the relative merits of each and the optimal strategic mix.

Although the risk of reputational damage is high if virtual problem-solving communities are poorly executed, the rewards of good sites are greater, she says. Want proof? Just go to your local Starbucks and order a tea latte.