Research Study: Marquee Companies Discuss Investing in Private Online Brand Communities to Gain Consumer Insight and Advocacy

Sector Intelligence Surveys 16 Brands on How Private Online Communities Influence Marketing and Product Development Decisions

Study Documents That Corporate Investment in Customer Communities is a Growing Focus as Consumers Are More Accessible but Also More Vocal in Their Online Feedback

LOS ANGELES--()--Passenger, a leader in private online brand communities that inspire customer engagement, advocacy and insight, today announced research data and an accompanying white paper by Sector Intelligence that analyzes how companies are currently using social media as part of their corporate marketing and product development strategies. The white paper examines how 16 Fortune 500 food & beverage, financial services, automotive, retailers and sporting goods brands are involving customers directly in the planning and development of company products, services and marketing initiatives, as well as the corporate social media strategies themselves, via private online communities. The study found that these interactive communities provide deeper insight into customers’ needs than traditional market research, have increased customer advocacy and loyalty, and can help avoid consumer backlash as companies develop their public social media presence.

“Never before has the impulse for consumers to connect with brands been expressed and acted upon on such a large scale, and never before have so many disparate individuals come together to help produce products and services that would be in turn distributed on a mass basis,” said Craig A. Honick, managing partner, Sector Intelligence. “The gap between customers and brands is getting smaller each day, and the brands we interviewed in this study documented that direct conversations through private social networks are improving the climate for innovation in tangible ways.”

“There is no doubt that social media has changed how companies interact with their customers, and strategically engaging with and listening to customers is a growing area of investment for many brands right now,” said Samantha Skey, general manager, Passenger. “The survey demonstrated that private online communities are shifting the way brands think about communicating with their customers, and the dialogue that results from these communities is proving to be a catalyst for significant change within organizations.”

The study delivers quantitative and qualitative results that demonstrate how marketers and brand managers are changing the way they interact with their customers to solicit feedback and input through private online communities, and get deeper insight into the preferences and lifestyles of their audiences. Highlights include:

  • 86 percent of respondents report that private online communities provide richer insight into customer needs
  • 33 percent report that the community input alone has actually changed product designs and marketing plans
  • 43 percent report they use fewer focus groups as a direct result of engaging in collaboration via the private online community while 36 percent report conducting fewer surveys
  • 64 percent report that the community has improved the context for decision-making within the company
  • 96 percent report that their marketing department is deriving value from collaboration with customers, 71 percent report the same for market research; 66 percent report a positive impact on product development

Based on the interviews with the brand executives, Sector Intelligence drew the following conclusions:

  • Word of mouth is likely to become a more central part of a company’s future marketing strategy as they learn to integrate loyal customers into the brand strategy. The intimacy created by ongoing conversations can be a powerful model for connecting with the customer base and learning how to foster loyalty
  • The conversations happening in private online communities are unique from other forms of research such as focus groups. The ongoing, direct communication of this medium provides businesses with a consistent, more affordable way to instantly engage with consumers. As this becomes normative behavior, these conversations turn into more impactful relationships
  • For some of the more conservative brands surveyed that have shied away from public social networks because of the risks involved, private communities facilitate innovation and direct conversations with consumers in a safer forum, while still organically encouraging customer advocacy
  • Even with budget crunches, companies are investing in tools and services that will help them listen to and learn more from their customer base
  • Private online communities can enhance internal collaboration within larger brands in diverse sectors. By talking to their customers directly throughout the various product development and marketing processes, the lines between various divisions are blurring - both for economic and productivity reasons

To download the white paper, go to www.thinkpassenger.com or email info@thinkpassenger.com.

About Sector Intelligence

Sector Intelligence is a strategic research and consulting firm specializing in the study of group culture and emergent social trends. The firm helps organizations position their brands so that they are aligned with the values and normative behavior of their target markets, a key factor in sustaining brand appeal.

Sector is continuing to develop the Brand-Life Continuum Report™ and the Brand Sustainability Index™, tools which measure and benchmark the nature and depth of how organizational and personal brands are integrated in the daily lives of target market groups. The tools make extensive use of ethnography, word of mouth research, and quantitative modeling and are often paired with social media applications that track and analyze online consumer conversations.

Founded in 2001, Sector Intelligence has associates in Seattle, Los Angeles, Dallas, Washington, D.C., and Brussels, and serves corporate, non-profit, governmental and political organizations. For more information, please visit www.sectorintelligence.com.

About Passenger

Passenger is a leader in private online brand communities that inspire customer engagement, advocacy and insight. With its intuitive platform of social networking, collaboration and analytics, Passenger works with companies such as ABC, Coca-Cola and Fox to build and manage private online communities to make more informed business decisions, innovate more rapidly, and design better products and services. Founded in 2005 with offices in Los Angeles, Palo Alto and New York, the company is privately held and funded by Shelter Capital Partners, StarVest Partners and Steamboat Ventures. For more information, please visit www.thinkpassenger.com.

Contacts

Bateman Group for Passenger
Shannon Walsh, 415-503-1818
passenger@bateman-group.com

Contacts

Bateman Group for Passenger
Shannon Walsh, 415-503-1818
passenger@bateman-group.com