02/21/10

Stop talking about community as a way to make money

My dear friends at Fast Company recently ran an article about the restaurant chain Houlihan and their use of a private social network to connect to their die-hard fans & diners. They managed to build their network to 10,500 "Houlifans", who provide feedback to the company (in return for coupons, exclusive information and so on). So far so good... What starts to tick me off is the fact that every time a business magazine such as Fast Company talks about communities, the very next line is about profits:

The community's feedback has allowed the company to revamp on the fly, and the small-plates menu now accounts for 26% of item sales in the 10 markets where it has debuted. Those dishes carry a higher-than-average profit margin on smaller-than-average portions. In the Kansas City area, site of the first test, overall profits are up 12% [...]
Seriously - if that's the way you see your community (and I am sure Houlihan wouldn't have more than 10,000 fans in their network if they would treat their community members purely like a way to increase revenue), you better don't even start. It's a recipe for disaster. So - please dear business writers: I know that it's compelling to draw the comparison between organizations with strong communities and increased revenues. But that's not the story - it's the byproduct of an organization which produces something their customers want.