How much do you know about your customers right now, at this moment?

A lot of companies can show you composite profiles that describe their target customers, including job titles, needs, obligations, and goals. No doubt about it: It's important to know those things. But relying solely on such information to connect with customers is like trying to strike up a conversation with a cardboard cutout. It just isn't enough.

Your customers are real people. Their needs, concerns, and motivations are dynamic and likely changing rapidly in this climate as a result of layoffs, budget cuts, and general worries about the state of the economy.

Now, more than ever, you need to know what your customers are thinking from day to day, what they need and what they want, what motivates them, how the economic decline has affected them, and what they'll be ready to buy on the upslope. This knowledge is crucial for weathering the economic storm. Not only that, it can lead to breakthrough success after the storm passes.

The good news is that despite the tough economic times many companies are demonstrating the importance of focusing on market research—figuring out new ways of connecting with customers, learning from them, and getting results without drastically increasing their budgets.

Among the chief marketing officers and senior marketers surveyed in a recent Forrester Research report, 47% are tapping into customer communities and increasing their use of social media to gather, test, and market ideas. In addition, 50% are testing new innovations on a small scale first, to make innovation processes more efficient and cost-effective.

These marketing executives know how critical it is to keep market research in place. More than ever, they need those precious insights that will guide sound business decisions, drive product innovation, and improve marketing. So they're using online customer communities as a faster, more cost-effective way to gather qualitative insights.

How are they doing it? By implementing the following three methods.

Method 1: Using the community to observe and understand

Online customer communities are an ideal place to pick up on the voice of the customer. Gather enough members who are motivated to simply hang around and chat, and you'll gain a good sense of their ideas, concerns, wishes, motivations, and more.

Beyond unstructured discussion, too, there is a wealth of potential for understanding customers and uncovering market needs. Many businesses are exploring the use of directed activities such as online journaling, online panels, and videographies, which can supplement or even replace more time-consuming and costly offline focus groups and ethnographic studies.

Taken together, unstructured discussions (the social-networking side) and directed activities (active information gathering) provide a more nuanced and more complete view of the customer. And you can tap into this view whenever you need it—with virtually immediate answers and insights.

Method 2: Using the community to generate new ideas

Customers can be a bottomless source of ideas. More and more companies are beginning to tap into this renewable resource by opening up marketing, research and development, product management, and innovation processes to make room for ideas from outside the organization. Online communities offer a perfect (and cost-effective) channel for capturing ideas.

Idea generation works well in dedicated sessions that are specifically designed for brainstorming, crowdsourcing, or expert ideation. These online sessions can replace other ideation strategies or supplement them by providing a forum for preliminary or follow-on discussions, allowing participants to delve deeper into the topics that matter to the business.

Ideas can also spring up more spontaneously—in a continual fashion. The Clorox Company, based in Oakland, Calif., provides a great example of the value of crowdsourced ideas. It uses its online community for open innovation, to field ideas for green products and ingredients. Within a few months of the online community's launch, a member suggested an environmentally friendly solvent that promised enough revenue to pay for the investment in the community platform.

Method 3: Using the community to validate and refine ideas

Generating hundreds of ideas is one thing. It's quite another task to identify, develop, and refine the best ones. Online communities are an ideal medium for helping you collect and manage ideas, because they allow customers to weigh in: Put new products and new features in front of customers; watch how they react to proposed ad spots; ask them to rate and discuss your new packaging concepts.

Rally Software in Boulder, Colo., offers a good example of how to incorporate a community into a company's internal processes. Rally customers and developers contribute as many as 100 product-feature ideas every month, voting them up or down and thus helping Rally prioritize. The best ideas are woven into product-development systems and processes, putting them on the product road map. Once those ideas are fleshed out, Rally takes design prototypes back to the community for testing and feedback.

By using an online community to validate and refine your ideas, you can gather richer feedback for higher-quality, more market-ready products—while compressing the innovation cycle and getting to market sooner.

Guided by the voice of the customer

Engaging your customers can give you a real competitive advantage, especially in tough economic times. And the fast-changing conditions make it essential to maintain an ongoing understanding of what they're saying and doing—today, tomorrow, or right this moment, if need be.

That means supplementing those point-in-time snapshots that traditional market-research techniques give us. It means fostering an ongoing dialogue and initiating a stream of ideas.

Using online customer communities is quickly becoming one of the best ways to innovate and take advantage of opportunities in the marketplace. And the time to start is precisely during an economic downturn.

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John Kembel is cofounder and CEO of HiveLive ( and a consulting associate professor and strategy board member at TheHasso Platner Institute of Design (the "") at Stanford University. Reach him at