Communispace offers a unique process for administering market research. It offers a view into the minds of the customers of a brand by building brand-focused online communities in order to enable members to communicate with each other and generate focus groups to discuss the product. A community is built as a long-term project; it continues to produce valuable information for companies over the course of its existence. The business model utilized by Communispace helps to provide facilitation and management powered by technology and innovation.
Communispace differentiates itself by focusing on the strategy of building online communities that act as an invaluable resource for testing ideas, generating feedback and exploring customers’ mindsets. Communispace can begin its analysis within 24 hours of launching an online community as it reaches out to a particular subset of people that would be most interested in commenting on and speaking about a particular product. A Word of Mouth campaign utilizes a different strategy. A targeted community would receive the product in the mail and would then ideally spread word around about the product to friends and neighbors.
This campaign, while a beneficial tool for market research, was not a tool that Communispace utilized. There were many competitors that were better at this method. Simmons is a highly recognized FMCG company holding 20 brands that are found in over 95% of US households. Simmons wanted to promote its new organic product for weight conscious consumers via Communispace using word-of-mouth. The business problem being faced by Communispace was that it could not determine whether it would be undermining its strengths and strategy by taking this type of project or whether it would be detrimental to turn such an influential client down.
The case states the communities are built on the foundations of sense of trust and the feeling that their contributions are really making a difference for the company. Communispace built its business on a strategy that reached potential customers by building online communities and did not serve the purpose of receiving a free product and talking about it outside the community. As Julie Wittes Schlack, Senior Vice President of Innovation and Design and a cofounder of Communispace points out in the case, the company’s growth depended solely on its core competency.
Moreover, due to low entry to barrier into this particular arena of market research, there were many other competitors that had built their competitive advantage on doing word of mouth campaigns. So another problem that Communispace would be to weigh the options of benefits gained by entering into this WOM arena where they have no real advantage versus the damage they might incur by compromising on their core competency. In my opinion, Communispace should focus on the strategy that has defined them and not sacrifice their identity and corporate strategy.
From the success and expansion of Communispace it is clear that they have gotten their process for building communities down to a science, thus allowing companies to not only to listen, but learn. Flipping this model on its head not only would completely alter the process in which companies engage in with their community, but it would also make for a far less exact science in what Communispace does? Moreover, word of mouth is something that can’t be manufactured to find success repeatedly, rather it should happen organically and not by force.
Hence, making that a core competence for Communispace would prove exceedingly difficult because it is difficult to draw the valuation of a successful WOM and then repeatedly recreate its success. That is how would Communispace measure the effectiveness of the WOM campaigns? In the present scenario, they can provide their clients with reports and analysis on the conversations in the community, but how would they measure how effective their members are outside the community?
Though advertising and creative marketing campaigns can spur word of mouth, a community approach would seem as a dishonest approach with a possibility of no results or backfiring on the credibility of the community. This, in turn would hamper the reputation that Communispace enjoys and might be detrimental to its social health in the long run as it would incite distrust amongst its community members which might lead to loss of present clients.
The intense competition that Communispace will face, the potential loss of credibility of community members when they understand that the community is only for advertisement and the short-lived nature of WOM campaigns, hence, the campaign-fuelled business can undermine the long-time subscription model are reasons that support the decision to stick to their core services and not digress into an arena that utilises a model that is completely dissimilar to Communispace’s original one.