January 29, 2008
By Jessica Tsai, Assistant Editor, CRM magazine

ACT! Enacts an Online Community

Social networking is taking the market by storm and software companies are hopping on board one by one. Sage Software, for example, yesterday launched ACT! Online Community, an open forum where users and prospective buyers can gather and interact with each other on topics ranging from best practices to product inquiries. The development of the community was intended to help foster dialogue with and among customers, and to help Sage focus on becoming more "customer-intimate" and transparent, says Neal Beam, senior manager of customer loyalty for the company. Beam describes four main drivers behind the ACT! Online Community:

improve customer loyalty and increase retention;
gain insight from the customer base;
reduce support costs; and
drive sales.

"[Studies have shown] that retention of customers is significantly higher when they participate in the community," Beam says. When customers feel that their opinions and insights matter to the community, they are more likely to have a positive experience and therefore associate positively with the product. In turn, a satisfied customer base is also more likely to support Sage through word-of-mouth marketing. "Me standing on a podium, beating on my chest, saying we're great is one thing," Beam says. "But having a fanatical customer who supports our product is a whole other thing." "It's really a smart time to cozy up to your customers," says Denis Pombriant, founder and managing principal at CRM consultancy Beagle Research. "We've doubled the size of the community of users on two different major fronts: financial

innovation within products and technical innovation within products," he says. Community sites reveal customer needs from a perspective unattainable through one-way marketing campaigns. While Sage is setting up the infrastructure for this community, Beam says the company hopes to see the knowledge be customer-driven. The line between what is "expert" advice can sometimes blur: ACT! marked its 20th anniversary this past year, and some ACT! customers have been familiar with the software longer than current members of the company's support staff. So far, there are few restrictions guarding the community: Anyone with a username and password can join the forum. The only stipulations include appropriate language; no flagrant, disparaging comments about the company; and preventing the site from becoming too commercial. Moreover, the company plans to focus on ensuring that the information posted is correct and up-to-date. Successful online communities have been popping up everywhere, Pombriant says. In industries as disparate as financial services, consumer goods, and automotive, companies are leveraging customer insight. While online communities are relatively new for software firms, on-demand CRM- and business-services provider Salesforce.com already has its own forum, aptly named Salesforce Community. The challenge with having an open community in general, however, is knowing who is posting and the angle they're coming from. As Pombriant sees the situation, companies looking to divine trends and truths from online postings may risk missing the forest for the trees: "The big mistake, I think, with communities like this is that we have a lot of people sign up and we just assume that we have a good cross-section -- when [even though] you may have a lot of people sign up, you may only have a small minority who are vocal," he says. Therefore, only by understanding who is actively contributing can companies accurately and appropriately extract and apply customer insight. Sage will need a strong database and a powerful analytical tool to aid in quality segmentation, Pombriant adds. While things are looking good for now, the success of the community comes down to the very people its meant to serve. "It's all about who comes and what they say," Pombriant says.

Related articles: Feature: The 2007 Market Awards: Midmarket Suite CRM Perennial entrant Sage Software is named a Leader, though with the usual analyst ding about too many product offerings in one space. Feature: The 2007 Market Awards: Small Business Suite CRM A midmarket and SMB staple, Sage Software is named One to Watch; its big challenge is to bring a more unified message to the market. The 2005 Influential Leaders Since becoming CEO of Sage Group's North America operations in October 2000, Ron Verni has presided over a number of high-profile acquisitions, including SalesLogix, ACT!, and ACCPAC. Sage Dismisses CEO [October 2007] Facing challenges, the venerable midmarket vendor beheads its North American operations. Sage Delivers Insight on Changes [May 2007] Insight '07: The company's annual partner and customer convention kicks off with talk of the future, growing from recently announced structural shifts. Sage Makes Commitments to Customers and Partners [May 2006] Insight '06: The company reveals a score of new applications, and renews its allegiance to the channel that supports it. Sage Livens Up the ACT! for 2007 The venerable product line receives upgrades to improve security, Outlook integration, and user productivity; one analyst lauds the new functionality. Sage's New Global Strategy. Restructuring Sage's CRM delivery strategy is part of an ongoing effort to rebrand and unify Sage's SMB products Best Practices: 10 Tips to Online Community Success Well-defined structures and roles are key to maximizing community involvement in Web 2.0 initiatives such as forums, blogs, and chats; a destinationCRM2007 exclusive. Customers Serve Each Other in Online Communities Mercury Interactive wanted to tap a valuable group of IT professionals to create a forum in which partners and customers could share technical information. Creating Community the New-Fashioned Way A Patricia Seybold Group report argues that companies and customers need to be "codevelopers" to develop successful online community platforms. Building Trust in an Online Community Communispace's role-based virtual community solution adds idea generation to knowledge sharing