Note: this is cross posted from the Online Community Report

Unfortunately, there has been a lot of very grim economic news of late. The purpose of this post isn’t to give an overview of the current situation, but to highlight possible implications of a slower economy on business, and by extension on online community budgets. More importantly, I want to start a discussion about Community Managers can help their community’s survive and thrive during the downturn.

We have seen this cycle before, and relatively recently. When the web 1.0 bubble burst, many “community”-based startups ceased to exist, and spending on online community development in the enterprise all but dried up. From personal experience, most of the community initiatives at Autodesk were suspended in the closing months of 2001, and we shifted focus to our discussion groups and some customer-generated content activities.

What was different with Community 2.0?
By late 2004 and early 2005, key changes in in the marketplace, in organizations attitudes and in customer (user / people online / etc) behavior led to an explosive growth of social media, use of social networking and increased online community building activities by many organizations.

Key factors were (IMHO, I won’t list all):
• Cost of platforms dramatically decreased, and in some cases fell to zero
• Consumer and workplace broadband reached ~100% penetration
• Consumers accepted less formal content, trust in “people like me” exceeded authorities
• A certain segment of the group formerly known as “the audience” decided they wanted to actively create, participate and connect
• Many companies started to accept and practice the principles outlined in the Cluetrain Manifesto, and in the many key books, blogs and conference that followed, evangelizing the metaphor of conversation

Things Were Going So Well, What Happened?
Earlier this year, we started to hear significant rumblings from wall street that things were not ok, particularly with the credit markets. Over the last two weeks, the markets have been in turmoil. Many organizations are seeing the dark shadow of a recession. Some argue we are already there. One thing is clear: most organizations have shifted to a more conservative outlook for 2009.

As organizations take a more sober look at the last quarter of 2008 and make projections for 2009, there are some likely implications for online community programs:
• Budgets will likely shrink
• Headcount will likely be frozen
• Positions may be consolidated (merging of roles)
• Layoffs may happen
• It will be harder to upgrade / make improvements to infrastructure
• Pressure will increase quickly and dramatically for some articulation of value
• Programs may be cut back
• In extreme cases, some community programs may be abandoned

Thriving in the Downturn
I want to be very clear here: I don’t think the global economic circumstances mean gloom and despair for the entire online community sector. The circumstances for Community 2.0 that I outlined above still generally hold true, and I still believe most organizations can create real value by engaging in online community activity. Signs that interest in online community is still high are all around. For instance, demand for qualified community managers and strategists is at an all time high (even though we are starting to see the first hints of staff reduction).

However, I do think that Community Managers have some work to do in order to navigate some of the potential challenges I outlined above. I’ve outlined the following tactics that can help (and I’d love to here your suggestions via the comments).

• Focus on Defining / and Reporting Value
In order for your community strategy to be sustainable, you need to be able to articulate value back to the organization. This value has to be articulated, at least in part, in the cultural language of your organization. In some organizations, it’s all about impact to customer loyalty, it some organizations, this value is growing an audience (member registrations). You will likely wind up with a report that is a mosaic of quantitative and qualitative sources. We’ve studied this issue in the Online Community Research Network, and you can see a report excerpt here:

Online Community ROI and Revenue Techniques

• Reach Out to Other Departments (CSR / Marketing / Support)
Online Communities offer value to almost every department in the organization, from HR (recruiting), to Support (call avoidance), to Marketing (awareness / reach), to the Product team (feedback, customer led innovation). Now is the time to reach out to other teams and create cross-organizations ties, and involve other teams in community building and engagement activities.

• Show the Cost of Not Participating
One way to show value back to management is to paint a picture of not having a community or community engagement strategy, and the associated costs and losses. These hypothetical costs can range from increased awareness of competitors to decreased customer satisfaction and loyalty.

• Be Honest About Your Strategy
Take a look at the community touchpoints and programs you are engaging in. Are there a few that have little or no participation? Are there features that score consistently low on your community research? Now is a good time to look at shedding these features and programs that are not creating value for your community. This is also an opportunity to involve the community in continuing to shape the experience and ongoing direction. Lastly, are there features or programs that you are struggling to maintain, that would be better served out in the community ecosystem? For instance, a particularly strong, independent Facebook group for your brand that you have been struggling with, or a user group that has a competitive feature on their site? Let it go.

• Stick Together
The worst feeling in trying times is feeling alone and isolated. If you and / or your team don’t have peers at other companies to talk to and share strategies and tactics with, start making those connections now. There are lots of meetups (like my Online Community Roundtable), conferences and organizations (like the social media club and the online community research network) to help support you.

What do you think?
I would love to hear what you think, either via comments or email. Are you seeing changing attitudes towards your online community initiatives? Have you been affected by the downturn? Do you have advice or suggestions to help other navigate these issues?