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  Building a Business Case for Community?
How can one profit from Message Boards? That is, I am trying to complete a business case for Message Boards and have hit a stumbling block - how does a company profit from Message boards, moreover from Communities? Thanks.

That is an excellent question! Online communities are a great way to provide like-minded individuals a place to share their thoughts, opinions and feelings regarding a company's service or product in a safe environment. In terms of money-making possibilities and a business case, communities are no different from the web sites they reside in. That is, implemented well with a solid and viable focus strong business model, and geared towards consumers they serve as excellent potential revenue generators. However, a badly formulated and weakly implemented community, like a web site, may not hold a strong business footing.

By encouraging exchange from consumer to consumer or consumer to company, communities assist with several business fundamentals:

Building Consumer Loyalty

A consumer who feels closely connected to a company is more likely to initiate and then continue to purchase services/products from that company. They are also more inclined to share their experiences with other consumers via word of mouth, which is a prolific form of viral marketing. For example, a potential consumer visits a software company's community with a view to gaining insight into a particular product before purchasing. Both company representatives and fellow consumers become valuable informational resources, the latter often performing a significant surrogate sales representative role via their own feedback and experience.

Both prior to and post-purchase the interaction between consumers and between a consumer and the company will assist in generating sales and building long-term consumer loyalty.

Reducing Customer Service Costs

A company can reduce their expenditure on customer service, since message boards become informational resources and can act as a line of customer support and service. In addition, community members can and will often act as customer service representatives, assisting fellow members with issues and providing guidance. This is not only a cost-saving way to provide consumer support, but also it is time effective, cutting down on the need for representatives to spend an inordinate amount of time guiding and assisting consumers.

Traffic Optimization:

It is important to realize that while content in the form of articles and possibly product descriptions are important to a site/company they are only one part of a site's traffic equation. A solid and well thought out community offering, such as a message board that is directly linked to site content, not only attracts visitor traffic but retains traffic - creating site "stickiness". Participants become actively involved in the dissemenation of information, sharing their thoughts and participating in stimulating debates and conversations, and importantly spending more time upon your site as a result.

Marketing/Consumer Research:

Companies also benefit by using their community as a means for market/consumer research to gain informative insight into what a consumer wants and expects from a product/service. This form of research not only demonstrates a company's care towards participants' opinions, but it provides an excellent way for a company to improve services based on the feedback gained.

With these in mind, let's examine some ways in which a company can increase their ROI through community offerings.

Advertising Revenue:

Advertisers are always looking for creative ways to increase their exposure. Targeted advertising, that is, advertising directed at particular consumer groups on the basis of demographics, consumption or other factors, is particularly complementary with community. Advertisers, moreover, are more likely to place banner ads and sponsorship on a well moderated and executed community and site, and on a site where consumers tend to be more immersed rather than fleeting. Therefore a community provides strong leverage for increasing the revenue that is generated through advertising.

Membership Fees:

Another way to generate profit from community is by charging a membership fee to join the community in exchange for consumer incentives or other value added services, e.g. discounts on services or products and a safe environment for exchange. It is important to keep in mind that if a company chooses to charge a membership fee that the membership package is comprehensive and worthwhile - that consumers receive the best value for their expenditure. Such models are particularly powerful if there is an "inside track" involved in membership, such as for a fan club, where participation brings exclusive information, extra discounts, special merchandise, and other rewards.

Product/Service Exposure:

Community components are an excellent way to promote services/products available on the site. Consumers may be unaware of the offerings of the site and site owners can utilize current conversations within chat or message boards to point members in the direction of a service/product that would be of assistance.

Bear in mind that it is relatively inexpensive to set up a message board on a web site. There are a number of comprehensive message board tools that are free and easily implemented on a variety of different platforms. There are many others for which the investment is relatively small. However, the longer term commitment of time, energy and financial investment directed to a message board needs to be taken into consideration. This is especially pertinent if the message board is thoroughly staffed, that is, your site representatives or other individuals perform moderation tasks, meeting and greeting, and are a solid and consistent presence.

We hope this has helped to provide some insight into the benefits of community and how a company can profit. Please also feel free to visit a previous response to the question Can Community Generate Revenue? which may assist you further.

Best of luck with developing your business case and your community.

- Jon Nix and Pam Thomas
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