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Community Connections: The new consumer demographic

Social communities on the Internet can offer excellent support for online marketing distribution strategies with the objective of improving business results. But the benefits of sustaining, encouraging, and participating in conversations between members are not limited to just raising brand awareness; there is a direct impact on increased sales and profits as well.

Leveraging online communities can enhance the probability of success in a variety of distribution channels since online consumer communities influence every single phase of the buying decision process, both online and offline. For example, after talking to others, individuals might recognize they also want (or “need”) a specific product, considered “cool” by other community members. They could be compelled to search for additional information, within and outside the community. Having established “the need,” people will gather as much information as they can, and may tap the community to find different options or evaluate competitive alternatives. They may also compare different channel opportunities to decide if it’s better to buy online or offline or mix-mode.

Since purchase modalities are constantly increasing with online communities, each step of the buying process should be supported both offline and online. For example, the introduction of consistent product codes across online and offline channels, allowing people to immediately identify the same product between the two. Online communities’ participation stimulates consumer purchase behavior, informing, and communicating real-time “calls to action.” In the post-purchase phase, communities will also influence potential new members through word-of-mouth communication and brand expertise.

So, what are the implications for managers of online communities’ impact on consumer buying behavior?

When seeking alternatives and unconventional ways to improve business results, retailers should consider how to leverage connections that people have in online communities for building better relationships with them and influence their buying behavior, both online and offline. Brands need to start considering the social dimensions of the shopping experience. The variable “who is connected to whom” allows companies to find new potential customers that may not have been identified based on traditional segmentation and distribution strategies.

Whether an individual is linked to existing customers is an interesting aspect on which to base marketing decisions. While traditional marketing research can offer detailed profiles of potential customers, it does not reveal the connections that exist between people, information that is now readily available thanks to online communities. For segmentation, the variable of “who potential customers talk to” may be more important than, for example, “where they live.”

This business model is based upon combining shopping and social networking since, “shopping is more fun with friends.” Enlightening information on buying patterns, social shopping, and preferences can be found within communities where potential customers interact, share customized shopping lists, make recommendations, and aggregate relevant product information, such as comparative prices and deals. Virtual communities allow people to discover information from other similar social members, recommend and discuss not only favorite products but also stores, get personalized shopping suggestions, and create shopping lists. Social networks are very attractive, from the retailers’ point of view, because consumers are connecting with other people on a personal level. That base of like-minded connections can serve as an effective distribution channel. These connections may stimulate conversations that drive the kind of online traffic which results in ad click-through and increase the probability of overall online and/or offline sales conversions. And, the community value increases as more people contribute or interact.

As a consequence, consumer buying behavior has become multifaceted and very social. Companies should educate and influence customers on their buying behavior in the formats and media types they prefer and evolve their customer strategies accordingly.

I recently co-authored an article about four things companies can do to turn communities into a powerful market-research lab, early-warning system, and customer-loyalty builder.

Looking at communities as more than just promotion channels, but instead integral parts of the consumers’ entire buying process, will not only strengthen a brand’s relationship with its customers, it will directly feed its bottom line.

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