Marshall Kirkpatrick alerted us to a Wall Street Journal article highlighting research done by Ed Moran, a Deloitte consultant that finds exactly what we’ve documented. Companies that launch online communities as a means to market their brand or products almost invariably fail. For online communities to work the number one purpose must be to nurture, build and enthrall passionate userbases. The majority of online users can smell insincerity from ten clicks away, and the rest recognize it soon enough by the complete absence of a meaningful and engaging experience.

The WSJ sums their mistake up succinctly

One of the hot investments for businesses these days is online communities that help customers feel connected to a brand. But most of these efforts produce fancy Web sites that few people ever visit. The problem: Businesses are focusing on the value an online community can provide to themselves, not the community.

Moran studied 100 businesses that deployed online communities, and found:

• » 606% spent $1 million or more.
• » Only 25% attracted more than 1,000 registrants.
• » 35% failed to even get 100 registrants.

This means there’s a good chance some companies are paying $10,000 to acquire a single prospective customer email. (The WSJ article was wrong. Only 6% are spending more than $1 million.)

We’ve seen the cycle of launch, promote, ignore and fail happen with dozens of communities attempting to market a product or brand simply because we follow it all so closely. There have easily been 20 we’ve witnessed in the pet sector. Petsmart just brought pets.com back to market their brand.

If you are in the pet industry and would like to make sure you get it right, give us a call, we’ll help you get it exactly right.