Bathing Your Organization in Real-Time Customer Context

Using Online Communities to Understand Customers’ Passions, Issues, and Needs

June 22, 2006

How a number of consumer companies—Hallmark, Unilever, Kraft, RC2 and Charles Schwab—are using vibrant online customer communities to help them design and market their products. Many of these “closed customer communities” have been in existence for more than 4 years. The companies that are using them are getting faster time-to-market and better success rates with new products.

“I’m worried about how many of our 200 store managers will really use this tool to share ideas and insights,” said Tom Brailsford, Hallmark’s manager of knowledge leadership on the eve of launching a collaborative workspace for Hallmark’s elite store managers. Diane Hessan, CEO of Communispace, the start-up whose future depended on this project going live, gulped, looked her client in the eye and said, “Frankly, I’m worried too.” Diane knew that out of a group of 200 employees, typically only about 18 or 20 were likely to become active members of an online community designed to support how they did their jobs.

Her firm’s software had been originally designed to support internal communities of practice--people who work in the same discipline, use the same vocabulary, and care about the same kinds of issues, like the Gold Crown store managers who ran Hallmark’s retail stores. Communispace software was already in use in a dozen or so companies, and employee participation in those accounts was growing. But Diane knew she couldn’t guarantee her client that 100 percent of his store managers would use the collaborative workspace to share tips and solve each others’ problems.

Tom was silent for a few minutes. “I have an idea,” he countered, “what if we used it to get customers to talk to us and to each other and to help guide our growth in the future?” Diane remembers getting really excited at that point in the conversation. She realized that her client had just hit upon a much more valuable application for her company’s online community-facilitation service.

“From that point, we shifted our focus to building customer communities, and we have never looked back,” she recalled. “It was the smartest move we ever made. And, the impetus came from our customer. We owe Tom and Hallmark a lot,” she said. “They still get favored client treatment. They co-designed this service with us every step of the way.” As a result of Tom’s passion to connect more closely with Hallmark customers, at a time when it was getting harder and harder to reach people by phone and in person, Communispace redesigned its focus, its business model, its support services, and the kinds of facilitators it recruits and trains.

“In the past, companies like Hallmark have run focus groups as one way to understand customers. These sessions are time consuming to set up, very few executives get to attend them, and by the time you’ve analyzed what the customers said, you have more questions, not fewer. Having an online community is like keeping those customers in a conference room forever. Any time you have a question, you just pop in and ask them. In the meantime, they continue to chat among themselves, sharing information about their busy lives, posting pictures of where they work and play, brainstorming new ideas about how to improve their lives. It’s a form of online ethnography,” Diane Hessan explained, “and the customers love the experience of being insiders.”


Communispace builds and runs online customer communities. A Communispace community is a password-protected site where up to 400 prospects and/or customers are prescreened and invited according to a company's criteria. Community members spend an average of 30 minutes per week as active participants in the marketing process: brainstorming ideas, offering advice to one another and to the company, commenting on market trends, responding to surveys, helping the company address business issues, and more. Most community members stay connected for at least a year and engage in an average of four activities each week. Unlike most public customer forums and message boards, private communities are designed to be candid and intimate, resulting in high levels of trust and insights. They are actively facilitated to keep the discussions fresh and strategically relevant.

A well-run community can provide multiple benefits, including deep insights "overnight," a continuous connection to the voice of the customer, and faster innovation. More importantly, when community members become involved and realize that a company is not just listening to their ideas but acting on them, their loyalty and willingness to recommend the sponsoring company soar.


Hallmark called this customer community the “Hallmark Idea Exchange (IdEx).” For their first pilot community, which launched in November 2000, the Hallmark/Communispace team recruited a group of 200 customers--mothers with young children--and invited them to participate in ongoing activities in exchange for modest incentives. The Hallmark and Communispace team set participation guidelines that members need to meet in order to qualify for the incentives.

“Customers are usually asked to devote 30 minutes a week to participating in the community, and to average at least one contribution a week,” Julie Schlack, Communispace’s VP of Innovation & Design, explained. Since 2001, this group of Hallmark customers has been “brainstorming ideas, reacting to pricing recommendations, commenting on merchandising strategy, and talking about their wants, needs and product preferences. Hallmark, in turn, introduces strategically relevant topics, keeps the discussions flowing and ensures the voice of the customer is quickly accessible to senior executives for action.” 1

“Nancy Jaroh isn’t the type you expect to find in an Internet chat room. The 49-year-old mother from Traverse City, Michigan, has little time to spare after caring for three children and working part time at a data-entry job.

“Still, she managed to meet and befriend Linda Hutchins, 47, a stay-at-home mom in Durham, NC, via the Web. They became so close that Jaroh’s 12-year-old daughter paid tribute to Hutchins’ mother, a cancer victim, during a recent cancer walkathon.

“How did these two unlikely Netizens connect online? Through a corporate sponsor, one also acting as an authorized eavesdropper. Every recipe the two exchanged, every word of solace they shared since they went online in November, was monitored by researchers at Hallmark Cards, Inc.

“The greeting card company hopes to glean new product ideas by watching the lives of 200 consumers unfold through online conversations held on its ‘Idea Exchange’ Web site. In return, the participants receive Hallmark gifts every month and have a little fun. Many say they love tuning into their own soap opera every day. They sign on when they have a moment, chat among themselves, post pictures of home decorations at Hallmark’s prompting, and answer the company’s questions about products and ideas. ‘They’re letting you in, showing you around,’ says Lori Givan, a senior business research project leader at Hallmark.” 2

New Product Ideas. Every month, Hallmark asks its community: “what ideas do you have for us this month?” And every month in this dialogue customers have come up with between 10 to 15 very concrete ideas. Julie reports, “the ideas have ranged from gift boxes, specific gift items, or new offers like ‘let me buy my birthday cards in bulk. I need cards for all 27 kids in my child’s 3rd grade class.’” Many of these suggestions have been implemented. For example, you can now buy a set of 20 or more birthday cards and envelopes, and select from four different options: “ship the cards to me with no personalization, personalize my cards and ship them to me (you pick the font and color and provide up to four lines of text), personalize, address, and ship my cards to me, or personalize, address, and mail my cards directly to my recipients.” 3

Baby books were common gift items. But baby journals didn’t exist. Yet when Hallmark asked community members how they felt about keeping journals, they got a flood of responses. Many people “included stories about times they kept journals, how they felt when they went back and read their journals, the value of journals that had been passed down from other family members, and what features they would like to see in journals. While journal writing isn’t a regular activity for most of the community members, most have kept a diary or journal at some point in their lives. Many began when their children were born. For some members, journaling began when they were teenagers and resumed during such life events as pregnancy, divorce or other events that prompted the urge to write.” 4 So, Hallmark began offering baby journals as well as journals for other special events (honeymoons, new grandparents, etc.)

Maintaining a Customer Community. Since launching its first Communispace community in October 2000, Hallmark has continued to add user communities to help the company listen deeply to the needs of different types of customers. Some consumers have dropped out and others have been recruited to replace them, thus keeping the community vibrant. The “original” community is still going strong, six years later. “Twenty or thirty of the original women we recruited for Hallmark’s original community are still active members,” Diane said in early 2006. “They are ‘wired into’ Hallmark and feel very connected to the company.”

By 2002, Hallmark had “three groups--parents with young children, grandparents and ...

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