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The Business Benefits of Online Communities
by Amy Oringel and Konstantin Guericke

Until recently, multi-user communities were mainly considered a vehicle for gaming and entertainment. Though these markets will continue to grow, it is the business applications of community which will bring real profitability. Shared environments provide a company with personalized communication in reaching its consumer base and advanced collaboration in developing a successful internal framework of operation. Natural interaction of shared environments offers a heightened experience to users and a substantial and a cost-effective model to the hosts.

Companies of any size can use shared environments over the Internet to open lines of communication with their customers in a mutually beneficial way. The customer can hold a company more directly accountable for its services and can receive more personalized attention on issues than if a letter was written to a nameless, faceless executive or if an complainant e-mail was sent and never answered. The company itself can easily get in touch with its consumer base in a way not possible with a plain HTML site, to receive feedback and to offer services.

When satisfied customers share their positive experiences in dealing with a company and its products, the customers themselves become a company's evangelists. Also, a live company representative can form a more personal bond with a potential customer than a flat order form, increasing the likelihood of closing a sale. The primary arenas which would most benefit from this kind of natural, real-time interaction in virtual spaces are customer service, shopping malls, trade shows and sales showrooms.

For example, visitors to an L.L. Bean environment can see visualizations of different tent sizes and assembly procedures, and then ask for help with choosing the best tent for certain personal conditions, such as a family with two children which wants a tent big enough to sleep all four of them comfortably.

Companies can also use shared environments to foster collaboration and efficiently conduct internal business over corporate Intranets and Extranets. Online collaboration in a company environment provides employees with advanced problem-solving tools and saves company resources in the process.

When appropriate, internal meetings can be held in online board rooms and problems can be solved in real-time regardless of the employees' physical location and without spending company time and money on travel. The searchable chat logs from conferences can automatically be used as meeting notes. Collaboration can also be implemented in corporate training, where a company can augment employees' skill sets by demonstrating a new software program or teaching a seminar online.

The visual element of a shared environment also provides a vehicle for enhancing the tools available in a workplace, such as data visualization and process simulation. For example, a team of engineers who design an aerospace engine by testing different parts online from different locations can benefit from a display of results that show cause and effect relationships in a multi-user space .

Extranets, where several Intranets are linked together to form a fast, reliable means of communication, multiuser environs can help move a project toward completion. Salespeople from Honda showrooms scattered across the country can use each other as a quick and easy resource when hunting down a customer request. Reporters from different satellite bureaus of the Wall Street Journal can work together on stories from a virtual newsroom.

An online community makes a company's Web site a viable investment, because it is a cheap and effective way for that company to achieve its business objectives. Minimal upkeep costs are required to support a community which can house countless potential customers. Fresh content is the main factor in keeping an online community a low-cost endeavor. Instead of the expense of constantly checking and updating text and links, in online communities, the visitors themselves are the content. A new experience is guaranteed with each visit, because there will always be new people with new ideas and changing moods, as well as diverse programming.

Hosts provide a specific forum where an event is the draw, but the visitors themselves are at the core of the experience. The American Medical Association can sponsor an online medical lecture at minimal expense, where numerous users can share ideas and philosophies. Also, site hosts can actually generate revenue from their content through advertising, since advertisers pay for their ads to be viewed by the site visitors.

Other ways in which online communities enhance company Web sites is by attracting and sustaining visitors with exciting, cutting-edge technology, promoting the company image through innovative branding campaigns and generating revenue through electronic commerce and online sales. Electronic commerce in a shared environment is conducted in a familiar setting similar to that of the real world, and provides an entirely new money-making arena where consumers are afforded interactivity and convenience. Unlike in 2-D spaces, 3-D environments offer natural immersion where products can be viewed from all angles and, unlike the real world, buyers are not restricted by store hours, wrestling with parking or dealing with driving long distances to track down certain items.

In the areas of marketing and advertising, online communities provide an advanced way for companies to communicate their message and reach potential customers. These environments encourage an open dialogue between a company and its customer base, increasing loyalty to the company and its product line. Online communities can also serve as built-in 24-hour focus groups where company representatives can enter at any time to hear comments on the company or product's performance. Customization is key to the marketing of products online and online communities offer new, unique ways of allowing customers to receive personalized products and attention, including a one-to-one relationship marketing model rather than the "hit-and-run" banner model.

Advertising in these spaces can take advantage of the "real world" familiarity to provide an exhaustive list of dynamic advertising opportunities. These encompass interactive billboards, online endorsements and sponsorships, blimps and robots and multi-user games.

For example, three users can simultaneously click on an airplane flying overhead to enter a vacation raffle sponsored by American Airlines, Kodak can sponsor a discussion and exhibit of Ansel Adams' work, or Coke can build a Coke bottle-shaped building. Additional business models supporting online communities other than selling virtual advertising space include developing enabling technology such as multi-user servers and authoring tools, creating the virtual spaces which develop into communities, profiting from transactions occurring in a space and syndicating content for repurposing and distribution across various media and through different channels.

Publishing companies will be among the early adopters of shared environments, just as they were among the first to embrace the World Wide Web as a means of communication and information delivery. These organizations already have an established community in its readership based on a shared interest or viewpoint which can easily translate online without the same hard-copy production expenses. Magazines in particular develop a strong identity and brand loyalty and are also already familiar with operating an ad-based revenue model. The Net Magazine is in the process of developing an online community to support its existing circulation.

In addition to publishing companies, trade shows, entertainment companies, such as radio stations which already have a dedicated listener base, and search engines are poised to be among the first to support online communities to help achieve their business goals.

Lycos developed a 3-D community called Point World with Black Sun Interactive based on its Point catalog of site ratings. Users can enter a Politics world, then enter the White House level and then enter a world dedicated to discussing President Clinton's new cabinet posts. According to Point World, the time spent in an online community is an average of 25 minutes, while the average time spent on an HTML page is 15 seconds. This length of stay is valuable to those companies looking to "embrace and extend" their existing Web sites.

These companies can look to online communities to take advantage of a proven user base. Instead of creating a community from scratch, successful 2-D HTML sites can be leveraged by adding 3-D environments to harness user traffic and site branding. The Atlanta Braves recently launched 3D ChopChat, a 3-D community for their dedicated fans which grew out of the team's highly-visited 2-D site, and SportsLine announced support for a 3-D community party to coincide with the Super Bowl. Eventually, having an online community will be as commonplace and automatic as having a Web site.


Amy Oringel (amy@earthweb.com) is currently at EarthWeb, Inc. based in New York City where she is the editor of ChatPlanet, the largest network of Java-based chat sites on the Internet (http://www.chatplanet.com).

Konstantin Guericke (konstantin@blacksun.com) is VP of Strategic Partnerships at Black Sun. Konstantin started Black Sun Interactive's US office in March of 1996 and subsequently launched the company's presence. Guericke is a frequent speaker at trade shows and holds a BS & MS from Stanford University.

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