June 9, 2010
By Ian Jacobs, vice president and research director, Forrester Research

Postcards from the Edge

It’s become an article of faith that online social communities have the ability to improve the relationship between consumer and company, so my thesis for today may border on the heretical. Here goes: Not all companies really need to engage with their customers via social networks or online communities, even if those companies could demonstrably benefit from such engagement. (Not quite Martin Luther and The 95 Theses, I know, but given the number of social media practitioners fawning over the power of communities, it’s still a point worth making.)

To illustrate my point (and to ground it in the real world of commerce), I’ll offer up the obligatory personal anecdote. For my last birthday, my partner and I took a trip to Costa Rica. The wonders of the cloud forests, volcanoes, hot springs, and gorgeous beaches were part of my present; the other (and maybe greater) part was that I didn’t have to organize any elements of the trip at all. I just packed a suitcase, showed up at the airport, and my partner told me where we were going next and how we were getting there.

’Twas a brilliant trip—a destination completely deserving of its stellar reputation. Well…brilliant until the last night, anyway. That’s when we returned to San Jose, the country’s capital. My partner had discovered a small guest house run (and decorated) by a self-described eccentric artist. The Web-site photos of its quirky style seemed a great fit for my partner’s taste for extremely idiosyncratic people and places.

We arrived to find a disorganized owner lording over her tacky domain as if it were the Louvre. The guest house was a warren of corridors and difficult to navigate staircases, painted in garish colors trying to make some bold statement about the limits of the human cornea to withstand visual torture. Worse still, there were at least three locked doors between our room and the front exit, clearly designed to make egress during a fire into a thought-provoking performance-art piece. The artist-come-hotelier treated us as if we were lowly peasants lucky to gain admittance to her fairy-tale sanctuary. Clearly, not my ideal stopover point.

When we returned home, I started reading the reviews of this Addams Family hotel on the travel-community site TripAdvisor. A few partisans appreciated the place—in the same way that many loved the rude treatment doled out by New York’s famed Soup Nazi. For most of the TripAdvisor faithful, however, the experiences went from terrible to truly atrocious, including attempted food poisoning via unrefrigerated dairy products in breakfast bags left out overnight for guests.

There is one fact about this guest house that I have so far omitted: During the high tourist season, available rooms at this place were exceptionally scarce. The No Vacancy sign was always illuminated. It was continually booked, for months on end, even while rooms at the city’s top hotels remained vacant.

Would the guest-house owner have benefited from monitoring and responding to the vibrant—and overwhelmingly negative—conversations on the leading social communities for travelers? Undoubtedly. In the back-and-forth of debate, the TripAdvisor community succinctly provided all the wisdom the owner really needed to improve her customers’ experiences. But, based on the occupancy rate in her guest house, it seems obvious that she did not need to engage with that community at all in order to keep her livelihood lively. Her business had been booming for at least a decade and showed no signs of abating, even in the heart of an economic crisis.

Yes, my illustrative example is very definitely an edge case, as was the success of the Soup Nazi and other places with a go-there-to-be-treated-like-dirt ethos. But edge cases define the limits of new concepts, new technologies, and new interaction models. In the realm of social media, those limits also help us understand why some enterprises have begun to feel that the benefits of this new conversation model have been greatly oversold.

Ian Jacobs (ian.jacobs@ovum.com) is a senior analyst at Ovum. He can be reached on Twitter as @iangjacobs.