Building Online Communities for Business

When Gary Arena arrived at online community builder, Communispace, in 2005, he was employee number 50 and the first openly gay employee at the fledgling company, which was then barely more than five years old and had just turned profitable.

He was also the CFO, charged with facilitating the growth and financing of an enterprise that was a pioneer in building online communities for major brands that wanted to engage their customers in continuing conversations about specific products and services.

Now Communispace has a cyber-presence in 92 countries, it has contracts with more than 100 of the world's largest companies, it boasts a 91 percent annual client retention rate, and it has more than 300 employees, nearly 10 percent of which are openly gay.

Furthermore, while many other companies have withered with the economy, Communispace has consistently grown its client base, its revenue and its reputation for delivering unique customer feedback and game changing insights. According to Arena, the company projects more than 30 percent growth in revenue for this year, and it plans to hire 120 people in the Boston area, growing its most important resource, its people, by more than one-third. "Communispace is currently looking for individuals with backgrounds in Advertising, Market Research, Brand Management, Consumer Insights and Online Community Management. And because we develop our own proprietary software we also have a growing need for top Engineering and Technology talent," says Arena.

With a record of achievement like that, it is little wonder that Arena has gained some notoriety, starting with a "Chief Financial Officer of the Year" award by the Boston Business Journal in 2009. "It was a year when we continued to improve both our revenues and our margins despite the recession," says Arena, noting that he was recognized for finding creative ways to work with clients that were faced with budget-slashing demands by their own CFOs. "We had signed contracts, and we could have just legally insisted on the client fulfilling them, but we wanted lasting relationships more than short-term profits, so we found solutions that worked for everybody," he recalls. This collaborative approach resulted in tremendous loyalty, more referrals and great word-of-mouth advertising.

But the incredibly enthusiastic and energetic Arena is quick to shift the ultimate credit for the success of Communispace to the quality of its people and the uniqueness of the services they provide. "If you are a really big brand and you want to stay in touch with your customers, there is no better tool for doing that today than a Communispace online community," he asserts.

The process begins with the building of a private, secure and password-protected online "room" for participants to inhabit - a room that is designed to be fun for participants, and fitting for the brand and its products or services.

Then, a Communispace client services team uses social and technological resources to discover and enlist a "community" of 300 to 500 members who meet the demographic requirements of our client [the brand] and who want to participate in the development, refinement and/or marketing of those products or services.

"The real fun starts once we have 'launched' the community and begin running activities. We can ask questions of them, let them ask questions of us, or just let them talk spontaneously to each other about the products or services," Arena explains.

"The results are amazing," he says, adding that "it is like having a focus group on steroids." Arena also notes that "unlike most focus groups, our participants are not in it for the money, but for the chance to be heard on something they are passionate about."

He says that Communispace has discovered that really rich input comes from people who want to participate in product or service discussions without seeking a mercenary-sized reward. "These communities are cost-effective, you get a great return on investment and honest feedback from real people," Arena says proudly.

He adds that "no matter what the subject is, our member services team can always find the members to satisfy the demographic our client is looking to fill."

Thus, Communispace has established communities of foodies for Kraft, high net worth investors for Charles Schwab, frequent flyers who rack up 100,000 miles a year for United Airlines, and people who hand wax their cars at least six times a year for Turtle Wax.

"One of the things that Kraft did with its community was to study what consumers want when they reach for snacks in vending machines or quick-serve facilities. They discovered that most consumers wanted tasty 100 calorie snacks just to tide them over between meals and there was little concern over how many of the calories came from fat," recalls Arena, noting that this led to the development of Kraft's popular sweet and savory "100 calorie snack packs."

A community at PetSmart led the company to change its mantra to "Pets First", inspiring all new ads, merchandise, promotions and marketing. "Pets as customers" came directly out of the community. And a community for new client Gilt Groupe led to the recent "You ask, we listened: New and improved shipping on Gilt". All items now ship for one low flat fee!

Communispace communities also enable the enlistment of hundreds of online "mystery shoppers" who use mobile devices to upload photos, data and customer experience reports in real time while shopping, according to Arena.

He adds that these communities can be forums for online "town meetings" as well. When Charles Schwab himself wanted to engage directly with customers to know what they're thinking, he used his Communispace forum to do so.

"Some of our most unique work, however, is in the pharmaceutical industry," says Arena, noting that drug companies prefer to build communities around one product at a time. "We have developed over 26 branded communities of patients and health care professionals to provide insight which allows the manufacturer to improve disease management" Arena explains. He recalls that GlaxoSmithKline, a long-time client, successfully used online communities to study how to go to market with their anti-obesity drug Alli.

"The results are much better than focus groups," says Arena. "We provide not just the online room and the feedback, but well-organized content summaries and insight reports that can be manipulated and filtered to suit your needs." He calls the technologically enabled reports "instantaneous and actionable," adding that "we even get the answers to the questions you forgot to ask [in person]."

Arena, who recently married graphic designer, Javier Cortes, a partner at Korn Design, is particularly proud of his company's culture as well. "We celebrate diversity and practice what we preach," he says, noting that Communispace offers gay and lesbian partnership benefits, flex hours for working parents, and political support for efforts to change current discriminatory practices in law.

Arena, who is a member of the Board of Visitors for Fenway Health, is also proud that the company supports the center's mission to enhance the well-being of the LGBT community and others who live in the Boston area.

"We are environmentally conscious too," he adds, noting that Communispace will move from its Watertown office in November to Atlantic Wharf, Boston's first totally green skyscraper as certified by Leadership in Energy and Environmental Design (based on criteria of sustainability, energy and water efficiency, and indoor environmental quality).

As the person responsible for his company's legal matters, he is pleased that his law firm acts in socially conscious ways as well. "Josef Volman of Burns & Levinson is our primary legal counsel, and he has proven to be much more than a lawyer to us. He is a business partner who understands our mission and helps us to solve our business issues, as well as handling all of our legal issues involving litigation, intellectual property issues, contracts, and real estate leasing," Arena says.

He believes his lawyers are also fitting partners in the mission of growing client relationships with the likes of Coca-Cola, HP, Best Buy, Microsoft and other brands that Communispace already services.