In most hardware stores, there’s a gray-haired clerk who knows everything. For example, you fumblingly describe how you want to put a bird feeder on a pole, and the old guy says, "You need a flange fastener." Or, you want to hang shutters. "You need pintles," he advises. His acquaintance with doohickeys is endless: T-joints, pan head screws, toggle bolts, rheostats, turnbuckles, ball valves.

But where could hardware dealers turn when they needed advice—where to find a rarely requested item, how to prospect for sales leads among business customers, which merchandising displays seem to be working and which don’t? In that question lay a big opportunity for Ace Hardware.

Until recently, Ace’s dealers, like all hardware dealers, were pretty much out of luck. Ace’s dealers met to compare notes only a couple of times a year, at conventions. Many had little contact even with Ace headquarters because dealers operate independently, which means they sell Ace products but don’t work for Ace and are free to offer goods made by other suppliers.

Two years ago, though, the 75-year-old hardware supplier began deploying a Web site that exemplifies a rallying cry of the New Economy: "Nobody is as smart as everybody." Ace launched its first electronic meeting-place—a sort of virtual gray-haired maven for the 300 dealers that peddle Ace products to businesses. While Ace provides some information and advice at the site, the main attraction was that dealers could discuss do’s, doohickeys, and don’ts with each other. The commercial and industrial dealers developed into such a productive community of mutual advisers that Ace recently extended the idea to include its 5,000 retail stores.

"Ace Hardware has done particularly well [with its community], and I think it’s setting a trend among traditional companies," says Emily Meehan, a senior analyst tracking online communities for the Yankee Group, a research firm. Although Ace doesn’t get too specific about its financial results, it does say its investment in its online community has increased sales so much that it achieved a 500% return on its investment in the first six months. The company estimates that fully one-third of its dealers use the site at least weekly. Some check in every day.

Success hasn’t come easy. You can’t just declare yourself a community and expect people to join in. It takes some subtlety to get a community started and requires real effort to keep it active. As Ace learned, it’s especially hard to get knowledgeable managers to use the Internet if they aren’t already comfortable with it. "We’re pushing ’em forward, kicking and screaming in some cases, but we’re pushing ’em forward," says Tina Lopotko, the 39-year-old manager of Ace’s commercial and industrial division, which launched the initial piece of the community site.

After a while, though, a community can become self-sustaining if it builds up enough success stories and makes enough people passionate about using it—and Ace seems to have reached that point of critical mass.

"I come in each morning, and one of the first things I do is pop on" the Ace community site, says Paul Snyder, the commercial and industrial sales manager at an Ace store in Fleetwood, Pa. "I like being able to go on there and ‘talk’ to the other stores." Snyder says regular visits to the site give him ideas that he wouldn’t get anywhere else. Sometimes Ace features dealers that specialize in a particular area, such as property management. They can offer advice on how to approach apartment complexes and what types of products those businesses typically buy from Ace. That kind of information helps Snyder when he’s trying to pick up new accounts. "We know what kinds of items they use before we go into a place," Snyder says. "It gives us a little bit of an edge."

Bonnie Merkling, who had been calling on commercial accounts for Sunshine Ace Hardware in Dunedin, Fla., says she had lots of sales experience but didn’t know much about the hardware business. "I came from a plumbing background," she explains. But Merkling figured that the Ace site bulletin boards could answer customers’ questions. In one instance, a customer wanted an adhesive for attaching mirrors to walls. "I honestly didn’t have a clue what it was or where to get it," Merkling says. So she posted a query on the site. Within an hour, another dealer had listed the phone number for the product manufacturer and the item number of the product. She says she won an extra $3,000 in business from that particular customer for that product alone. She adds that the customer "comes in to buy it on a regular basis and buys other stuff at the same time.""

When she later was having trouble finding good prices on miniblinds, she posted a call for help. She received another prompt response from a dealer and was able to e-mail the supplier to get the information she needed. She shared it with the five other stores in the Sunshine Ace group.

Some people have become outspoken evangelists for the Ace community. Mike Dooley, who handles commercial accounts for Tri-State Building Materials in Bullhead City, Ariz., says that at the beginning of the community site there was a "propensity for shyness." But he believed so strongly in the potential of online information-sharing that he began to surf the Internet for products he needed and posted what he found on the Ace message boards—just to show people how they might benefit from swapping information. "It took a while for people to get comfortable with messaging each other," Dooley says. "Now it seems to be pretty sacred to be able to network."

Dooley’s enthusiasm is based on his own successes networking on the site. He has been able to obtain products for some of his most lucrative customers in nearby Laughlin, Nev., where a dozen or so major casinos have collective buying power of what he estimates to be $2.8 billion a year. He credits the dealer bulletin board with winning him a multimillion-dollar contract from the local Harrah’s casino. Dooley was looking for certain paints that could be applied directly to metal. Ace didn’t carry them. The only manufacturer that made them refused to do business with an outside dealer. But Ace, based on Dooley’s postings on its Web site, stepped in and developed the type of paint he was looking for.

In another instance, federal regulators rode into Laughlin to inspect the casinos and were preparing to fine them for spray painting without proper paint booth enclosures. "If they’ve got [the government] breathing down their necks, they can’t wait six weeks to do something," says Dooley, who went on the Ace bulletin board and found out from fellow dealers where he might find spray paint booths right away. "If we start becoming the problem solvers...we’re the cream that rises to the top."

Ace’s Lopotko says of the dealers: "We’re trying to help them sell more. That’s our main goal. If they’re more successful, we’re more successful."

The company already had the right tool when it began thinking about building its community of dealer/ advisers. It had built AceNet 2000, an extranet that electronically links Ace stores with the cooperative’s headquarters in suburban Chicago. Membership was mandatory, so Lopotko’s team could use AceNet to quickly launch a dealer community. (Ace began with its commercial and industrial dealers partly because their sales are typically bigger than those at an Ace retail hardware store—an average of $2.1 million a year compared with $1.1 million. In addition, the 300 commercial and industrial dealers were a more manageable group to test than the 5,000 retail dealers.)

Despite the presence of AceNet, many of the dealers hadn’t used the Internet before, so managers of the electronic community promoted its merits the old-fashioned way: by phone and fax. To entice dealers to participate, Lopotko says she and her team also post leads that come in from prospective customers who fill out information-request cards in magazines or at conventions, or inquire about Ace via the company’s Web site. In the past, Ace would mail the cards to dealers and try to distribute them fairly based on geography. Now, the leads are fair game for dealers who frequent the site (although there are guidelines about how many of the leads eager salespeople can grab at once). The posting has the added benefit of reducing the time it takes Ace to respond to commercial leads—it used to take days just to match up dealers with prospects. Posting the leads on a first-come, first-served basis also eliminates any feeling that Ace is playing favorites when it hands out the leads, Lopotko says.

Ace’s community managers constantly add enticements to keep people coming back. They do the little things like giving away free hats and balloons and profiling a "dealer of the month." They also put up essential information like sales fliers and newly negotiated discounts with manufacturers (which helps Ace, by eliminating paperwork and cutting mailings that might be out of date by the time dealers received them). There is a "Coach’s Corner" section where Ace will feature one of its people or a dealer. The guest "coaches" will conduct online discussions that amount to a mini-training course in a particular area of expertise (which also benefit Ace by reducing training costs).

"We’re trying to find reasons for them to come on there," Lopotko says. "But it’s a new way of communicating for a lot of them so you have to make it as easy as possible. We’re aware that they can go find products somewhere else rather than through us."

To pique the interest of those who don’t visit regularly, community managers send dealers a weekly e-mail and fax with some highlights of what’s been posted on the message board. To get dealers to participate, a community manager may even call them, interview them, and post their thoughts on the Coach’s Corner for them.

The Yankee Group’s Meehan says such active site management is critical—even for online communities whose members have a strong incentive to participate regularly. "A lot of companies thought they could just tack on a message board and hit the ground running, and it would operate itself," Meehan says, "but that’s not true."

It’s not that everybody loves the place. Skip Ruhl, sales manager at Truitt & White Lumber, in Berkeley, Calif., handles about 15% of Truitt & White’s $20 million a year in sales and says much of his business comes from his ability to sniff out hard-to-locate products. But he says he usually hits all his reliable sources before he thinks about using the Ace site to find things that his customers, mainly military contractors, are looking for. "They ask for stuff that hasn’t been around for 20 years," Ruhl says, and he doesn’t expect fellow dealers at the site to be much help. Ruhl likes the Ace concept and says its site provides "high-quality prospects" that have led to "a lot of good contacts." But he doesn’t regularly find the time to visit the bulletin boards and other areas of the Ace community. "I’ll go for long periods without using it," Ruhl says.

It’s not even that the Ace idea is original. EBay showed the value of online communities long before Ace came along. [See "‘Amazoning’ Amazon," Context, November/December 1999.] Among operations with a large number of retail stores, bakery chain Great Harvest has for years been demonstrating the power of encouraging local franchisees to share tips with each other.

Still, Ace’s site has become popular, leading the way among hardware retailers, so it may be able to make a new claim: that Ace is the place in cyberspace.