Introduction
Online communities build loyalty to a website. Users are drawn to the site for the content and services it provides. They can interact with other users to share opinions, concerns and passions. They may receive advice and reassurance from like-minded people about products and services they wish to purchase on the site. But, most importantly, users leave something of themselves behind on the site, in the shape of personal profiles, homepages and discussion board entries.

This investment of their time and personal data, combined with the relationships they form with other members, creates site 'stickiness' where users have multiple reasons to return to the site.

Why this is important for marketing people
Customer acquisition is becoming increasingly complex and expensive for marketers. Fragmentation of audiences across new TV and radio channels, press, outdoors and electronic media, burgeoning media inflation (especially TV) and increased competition in almost every sector of industry make it very difficult to reach target audiences effectively and efficiently. In this environment, customer loyalty takes on a new importance. Recent research has shown that a 5 per cent increase in customer retention can improve profits by 50 per cent (1).

While direct mail and direct response TV/radio have been around for a long time, interactive technologies, such as the Internet, interactive TV and wireless, provide marketers with an opportunity to identify loyal customers in real-time, create two-way dialogue with many customers simultaneously and at low cost, incentivise purchase and evangelising behaviour at critical moments of consideration, and measure marketing communications effects immediately.

Online communities provide marketers with the additional advantage of self-selecting audiences, united by common purposes, practices, circumstances and/or interests (2). By nurturing online communities around relevant audiences, marketers can benefit from:

» frequent and lengthy exposures to marketing messages

» useful and up-to-date customer feedback

» user-generated content which pulls new users into the site who create more content (the virtuous circle of critical mass)

» promotion of the site by community members

» a 'safe' transactional environment (people are reassured by other members positive experiences)

» early mover advantage (difficult for new entrants to attract loyal members of an established community).

(1) 'Man of Words' New York Times
(2) 'Creating Community Online', Durlacher