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The Community-Commerce Divide: Why Online Communities Should Connect To Commerce

  • Written by  Steve Hamrick, SAP

0aSteve Hamrick SAPAs digitization continues to gain momentum, consumers have become more and more comfortable researching goods and buying them online. By 2020, an estimated 30% of all purchases will be influenced through an online community. Not only are consumers going online to make their purchase, but a recent Forrester study found that customers typically complete 70% to 90% of their buying journey prior to engaging with a vendor. Companies and brands that can seamlessly integrate commerce and communities will increase customer engagement, improve customer loyalty, and significantly improve the number of initial and repeat purchases a customer makes.  

Companies that leverage communities as a cornerstone of their customer engagement initiative will also gain tremendous amounts of customer data and insight that can be leveraged to shape future incentives and loyalty programs. Creating brand ambassadors will be a critical factor for success in the future as brands are losing control over the customer experience as consumers increasingly trust peer reviews and peer generated content.

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While online communities are increasingly important, they’re not well-connected to the customer buying process. They are often set aside as “yet another destination,” missing out on huge revenue opportunities and failing to provide material improvements leading to customer satisfaction and loyalty. They contain no call to action and therefore the ability to capitalize on that customer’s interest and intent to purchase is lost. The brand’s inability to show customers an offer for a product that might fit their needs results in a missed opportunity and a lower return on promotional content.

This leads to two major problems: missing opportunities to provide a consumer with a personalized solution recommendation and failing to integrate the purchase journey into the early stages of the customer experience. All of the effort and expense in crafting these communities, engaging with members, and creating valuable content is at risk of going to waste. Even more importantly, these brands are missing out on an opportunity to better engage with customers, build brand loyalty, and cultivate brand ambassadors as they will need them in the future.

In order to make communities more effective, it’s important to understand the types of behaviors customers display based on their purchases as customer journeys can vary significantly, both in transaction and emotion. If the goal of one customer’s journey is to buy a simple product, such as a phone charger, brands need to provide them with a quick form of validation, such as user ratings, and get them to the shopping cart as fast as possible. However, if a customer is looking to find support for a more complex product purchase such as a vehicle accessory, sporting equipment, or a household appliance, directing them into user ratings without context may add anxiety or purchase uncertainty.

Online communities need to respect these varied paths to purchase as a starting point behind solving customer journey issues. Customer journeys need to be positive throughout, or the outcome can spell trouble for a retailer. An expert-authored blog post or a question and answer facility included on the product page can prove to be beneficial, but nothing is more valuable than enabling customers to read peer reviews as this is one of the most important and reliable factors for millennial shoppers. If the goal of another customer’s journey is to learn and share their experiences with other relevant peers in a product community, they will not want to be rushed into a purchase, rather they would want to learn and contribute.

In today’s digital economy, even something as seemingly simple as buying a pair of running shoes can become complicated when considering the different customizations and personalizations that can be made.  Online communities that support consumers evaluating a product for purchase, such as questions and answers, and also provide moderator and extension capabilities such that a question that is unanswered for a period of time can be automatically escalated to a call center representative, can help drive sales of complex goods. By enhancing an online community to meet the criteria of millennials and future shoppers, brands can build trust and loyalty among these age groups.

Without online communities connected to commerce, there is a huge missed opportunity to provide customers with deeper insights from end-users as well as gathering more data to create a more comprehensive product profile based on customer’s questions.  Online community solutions built for commerce can provide a wealth of helpful insight on consumers’ buying journeys, such as: What questions and answers were asked or viewed before a decision was made?  How many conversations and interactions did it take to make a final purchase decision? Which social content — such as blogs, reviews, or discussions — helped to influence a purchase? Which pieces of paid content actually drove sales? By integrating the actual commerce catalog within the online community, and knowing which customer journeys relate to which products, these forums can provide deep, meaningful engagement metrics around what drives successful conversions. This, in turn, enables the repetition of successful transactions, and the creation of satisfied and loyal customers.

A community integration does not start and end with community content itself. Retailers must look at integrations that translate across other channels, such as incentives or loyalty programs. The content from online communities creates non-promotional dialogue that impacts buyer decisions. As brand awareness blends between the promotional and organic content, smart retailers are putting that quality content to their advantage, across a wide variety of channels.

By identifying and solving real-world, everyday business challenges, successful online communities can put organizations closer to their customers.  Communities can offer deeper insights about why customers choose the products they do, and why customers become loyal advocates of a particular brand. Brands need to stop thinking of communities as “nice to have,” one-off places for customer dialogue, and integrate them more closely into their online marketing strategies.


 

Stephen Hamrick is the VP Product Management, Collaboration Software, SAP. Based in Palo Alto, California, he leads the product management, user experience, and documentation teams for enterprise social software products at SAP. Hamrick has spent the last 20 years of his career in the enterprise software technology industry, focused primarily on collaboration and social software.

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