The moveable feast has moved on. E-business priorities are shifting from aggregating eyeballs to creating long-term, profitable customers. For many companies, that means forming online communities.

The reason is simple economics. A recent McKinsey study found that consumer e-businesses have been spending more to acquire customers than those customers would ever bring the companies in profits. So, businesses need to either find customers less expensively or increase their lifetime value. Communities fill both needs by drawing in potential customers and making existing customers more loyal.

Business-to-business Internet players also now understand that they need to build relationships of genuine value to both buyers and sellers. So, online relationships can’t just be about transactions; they also have to be about the kinds of interactions that can happen in communities.

The mechanics of community building, though, can be subtle. Companies often fall prey to the same seven deadly sins:

ASSUMING TECHNOLOGY IS MORE IMPORTANT THAN PSYCHOLOGY. As Intel Chairman Andy Grove once observed, companies spend a lot of time thinking about what computers can do but not much time thinking about what people actually do with them. Even at Sun Microsystems, whose servers power so many Web sites, simple e-mail discussion lists remain the primary means for interactions among employees.

Fancy features may attract attention to a Web site, but they’re no substitute for understanding customers or for human relationships.

BELIEVING BIGGER IS BETTER. Companies shouldn’t start with a 50,000-seat stadium when a 1,500-seat gymnasium will do. Web-community visitors like to see activity, conversation, and collaboration. That is best achieved by starting with a narrow focus and growing organically over time as traffic increases.

Sites providing comprehensive coverage of a broad topic such as health care have a special challenge because they seemingly have to cover the waterfront from the very beginning. Even with such sites, though, the best answer is to start with a few general topics, then create specialized areas as interests become apparent. About.com, a news, information, and entertainment site now covering more than 700 topic areas, built out each area as participation grew. It started by providing content and allowing for discussion, then added live events.

FAILING TO RECOGNIZE AND REWARD COMMUNITY LEADERS. All communities have members who assume leadership roles, and those managing an online community should do everything in their power to find the virtual equivalents of the Chamber of Commerce member. If motivated through rewards and recognition, they can become the community’s biggest assets.

One reason that Wrenchead.com is one of the most active automobile-related sites on the Web is the Pit Crew—a group of about 40 community members who lend their mechanical expertise to others by assisting with Wrenchead users’ questions about automotive parts, accessories, and repair.

Leaders are just as important in business-to-business communities as they are in consumer-oriented groups. Leaders emerge in almost any thriving discussion group, whether they are networking gurus in Cisco Systems’ technical discussion forums or farmers on Agriculture Online.

IGNORING MEMBER FEEDBACK. Member feedback is probably the most powerful, and least utilized, benefit of community. Much more than in the physical world, members of an online community will talk to the corporate sponsor—and that sponsor had better be prepared to respond. Many companies treat feedback as a threat. Instead, companies should view feedback—even complaints—as an opportunity to improve their offerings. Doing so will increase members’ satisfaction and loyalty, the primary reason for building a community in the first place.

Community managers at eBay tell of how a seemingly minor detail in the auction site’s rating system—the color of one of the stars that signify a member’s rating—evoked powerful negative reaction. The company not only changed the color, but also instituted a process for soliciting community input on coming changes. United Airlines might do well to read the complaints at Untied.com, essentially a community gripe site.

CREATING COMMUNITY FOR COMMUNITY’S SAKE. It’s surprisingly common to find companies haven’t thought through how having online communities could benefit their businesses. In other words, businesses haven’t figured out whether, for instance, they hope to sell more to existing customers or find new customers.

Planning a community for the right reasons can bring unexpected benefits. Consumer Reports discovered that implementing an online community took it back to its roots as a consumer-driven organization.

FORGETTING TO FACTOR IN MEASUREMENT. Many companies simply don’t measure results. It’s crucial to know the measurement capabilities of the software being selected to manage a community, and to add extra data collection and tracking, as needed. A consumer site we worked with discovered that people who participated in its community bought six times more merchandise than casual visitors. Results like these show that an investment in community pays off.

SPENDING TOO LITTLE EFFORT ON PROMOTION. Companies have to use every means possible to reach out to members and potential members. Outreach can involve advertising, incentive programs, newsletters, and even direct marketing via phone, fax, or e-mail.

When Ace Hardware launched its community for dealers, it understood many potential members weren’t online yet, so it spent money on paper-based outreach to allow even offline members to participate.

Indeed, if any company’s online community illustrates how to avoid the seven deadly sins successfully, then Ace is the cyberplace. With 300 commercial and industrial dealers across the U.S., Ace wanted to create an efficient way to boost sales by sharing leads and merchandising tips. Ace built an online dealer community complete with electronic message boards, expert seminars, and newsletters.

As participation grew, individuals began to stand out as experts in certain areas. This led to "Coach’s Corner," featuring internal and external experts who answered dealer questions.

As the community matured, dealers began sharing everything from successful marketing strategies to sales pitches to tips on where to locate hard-to-find merchandise. And Ace’s dealers began picking up business. For instance, a dealer in Pittsburg, Calif., posted a note about creating a tremendously successful marketing strategy that included giving away paint samples at a construction site. Days later, a dealer from Fitchburg, Mass., followed his lead and won business from a large hotel and convention center. Another dealer—this time from Bullhead City, Ariz.—put his own twist on the strategy and won a multimillion-dollar contract from a casino.

The reaction was surprising, in that most dealers were new to online communities and had never thought of computers as their kind of "hardware." But within six months of the community’s inception, dealers had sold so much more through using Ace’s online forum that the hardware giant estimated it had already earned five times as much as it invested.

Warms is president and chief executive of Participate.com, which provides technology and consulting services for online community management. He can be reached at awarms@participate.com.