Of the many ideas that have entered the business world by way of the Internet, few have proved more potent than “online community.” America Online owes its success to the creation of community. Amazon.com has become a retail powerhouse thanks largely to the relationships it established with and among its customers. Despite the obvious power of community and the fact that virtual communities are not new, executives in most industries have barely begun to grapple with this new form of interaction, much less understand how it can be used to enhance their business. But before long, the ability to create and manage virtual communities will become a distinguishing feature of nearly every successful business.
Community interactions occur wherever people are connected over computer networks — whether these people are buying, selling, collaborating or merely seeking diversion. Online communities —which we define as groups of people who engage in many-to-many interactions online — form wherever people with common interests are able to interact. These interactions can have a big impact on business strategy and operations. And they pose unforeseen threats as well as opportunities. For example, customer communities eliminate the information gaps that companies traditionally relied upon to maintain profit margins. The Web makes it easy for customers to find alternative suppliers or to create purchasing consortiums to drive prices lower. Independent distributors create communities to gain clout over the companies whose goods they offer to the public. For example, they can compare notes to see whether scarce items are being fairly allocated by manufacturers. Employees form communities to discuss grievances about their managers. But along with such threats come remarkable opportunities. Employee communities can propagate needed change far more effectively than top-down mandates. Community efforts can vastly improve the coordination of channel partners and provide an unparalleled source of customer feedback. By developing new value-adding communities, or better managing those that already exist, companies can greatly enhance their prospects for success in the age of e-business.
This article explores how four organizations — Kaiser Permanente, About.com, Inc., Sun Microsystems, Inc. and Ford Motor Co. — have created online communities to support their business strategies. Together, these “four ways” suggest the many forms of online community used in businesses today and how to make them work.