The term "online community" is often used loosely and includes any sites that aggregate customers or an audience even though there is very little contribution by the participants or interaction among them. We use the term in a much more specific way, to highlight a potentially very powerful form of ecosystem that businesses can organize and nurture. These communities require extensive and sustained interaction among a growing number of participants to function well.

Why should companies care about these online communities? For one, they can increase the value derived from, and the lifespan of, a company's customer relationships. But more broadly, online communities can become valuable tools to understand how customers use a company's products or services and what kinds of improvements or changes might make sense. Companies pay a lot for focus groups and yet virtual communities represent a kind of 24-7 focus group.

Building an effective virtual community is no simple task. Most importantly, it requires a deep understanding of the unmet needs of potential community members rather than simply approaching it as a marketing opportunity for the company. It is no wonder that so many have tried to create these communities and yet so few have succeeded.

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