Posts

Connect With Your Customers

Check out this great video made by IBM about connecting with your customers. Social media continues to dominate the way people interact, share, and digest information. Bands need to play their part by engaging, interacting, and most importantly, listening to their customers. [youtube http://www.youtube.com/watch?v=uTOcdjf7X74]

Increase Revenue By 19% via Online Customer Communities

The University of Michigan conducted a study this year around increasing customer engagement via an online customer community vs. a Facebook Page. Their study was based around a company that sold many different brands’ products, meaning the products discussed were not associated with the brand sponsoring the online community. Brand communities created by the brand can expect an even larger increase in Revenue. Read on… Let’s start with the conclusion (that’s the most important part). The study concluded that companies with an online customer community increased customers’ expenditures by 19%. The research concludes that this significant increase is directly related to joining and participating in an online community, with active customers spending over and above what they spent before joining the community. Here is a chart to help visualize what this means. How Online Customer Communities Increase Sales This report falls in a line of research that notes members of online communities have an increase in purchase intention and higher revenue and margin growth. They will also take greater financial risks with the sponsoring firm and are also willing to pay a premium. 5 Things That Executives Need to Know to Increase Revenue Using Online Customer Communities 1) Customer Will Order More Often, Not Make larger Purchases Increased engagement increases number of visites to your website, which leads to a higher sales conversion rate. “The University of Michigan study saw order frequency increase by 18.4% after a customer joined the online customer community.” 2) Engage New Customers Research shows that newer customers that join an online customer community have the highest increase in expenditures. 3) Capitalize on Customer Retention and Repeat Purchases Participating customers continue to maintain higher levels of spending, even after the novelty of the online community wears off. 4) Offer Ways to Engage and Purchase Both Online and Offline One would think online communities leads only to an increase in online sales. However, with the emergence of an online community, offline purchases also increase. 5) A Rising Tide LIfts All Ships (and Product Categories) The University of Michigan research showed a proportional increase in sales in all categories across the board. Online Customer Community Takeaway The University of Michigan report demonstrates how an increase in revenue is directly related to the emergence on an online community. Though the 19% revenue jump is more of a guideline then a guaranteed result, executives can’t overlook the sales-generating power of online communities. This article is a summary of an original article by Joshua Paul, posted with permission.