Support communities are relatively easier to justify and track ROI metrics on, but marketing organizations are increasingly being the first to spearhead online communities – both social networks and also customers communities. Here is what we have heard from prospects and customers on why they are investing in online communities:

1. Diminishing returns from existing “get the message out” methods. Press Relations (PR) and communications have dramatically changed in the last few years. Used to be that if you hired the right PR firm (with connections) and had a good story to tell, you could issue a good press release, get it pitched to the right writers and get decent coverage. With the advent of blogs, RSS feeds, etc. there is an overwhelming array of choices for these audiences and “no one reads a press release any more”. Marketing teams still need to get the word out, and they are leveraging customer and prospect communities to do this in a more open and honest manner.

2. Fine tune their lead management process. Marketing teams spend good money on generating leads. Some of these start as suspects, then get qualified, become prospects, opportunities, then customers. But the key part of that sentence is the word “some”. Most of these leads are “not ready” or “unqualified”. Keeping an ongoing conversation with these “not read yet” suspects is an immense challenge. Since the cost of the lead generation was large, it is in the best interests of the marketing team to have an dialog with these potential targets until a point they are ready. Marketing teams are using communities to keep the “dialog ongoing” with suspects.

3. Getting your customers to sell for you. In a community setting “suspects” are going to be exposed to customers (good and bad) They are also more likely to listen and be influenced by existing customers of the vendor than others (such as analysts or press). There are downsides to this no doubt that I will address in another posting, but if you have a good product, suppor your customers well, they will say good things about it to other customers is what’s worked for us at most companies in software. This lowers cost of customer acquisition and is another reason why marketing teams are investing in online communities.

4. Non linear growth expections cannot be fueled by non linear investment requirements. Simple way of saying this is every CEO and hence the CMO wants to invest $1 and get $10 in return from marketing and they want it quantifiable. Marketing organizations are looking at communities to provide insight and also start to develop the “network effect”. More customers join the network because “everyone else is there” and the benefits to the customer are clear.

5. Long tail effect. Addressing niche markets never serves the large vendor. E.g. If you make software the monitors servers and systems, there will always be thousands of little devices you dont support because the cost of supporting them does not justify the investment. But customers still need these devices monitored. So, customers create the monitor for you and are willing to share it via their community to others (sometimes for a monetary benefit). With this the new prospect benefits, the company benefits (new market addressed) and the customer benefits (potential revenue stream).