The Business Value of Online Community

Let's face it — keeping the doors open for your community and paying the bills (including your salary) means convincing decision-makers they are getting their money's worth. Nothing speaks louder than data that shows contribution to top line growth or bottom line savings. The key is following a strategy that enlists stakeholders to describe what success looks like, and using KPIs to keep you on course.

Enlist Stakeholders

Your community lives in an ecosystem — the social networking (relationships) and social media (content) the community generates touches everyone in your organization, and beyond. A simple act can have far-reaching consequences. For example, the engineer who blogs about product fixes reaches customers directly. Over time, he builds a following, and his blog evolves as the source of record for the product. Customers consult the blog first, bypassing traditional support channels.

What just happened? The product support model has been up-ended. Resources spent on high-touch and low-touch customer support are now in question. Does manning a contact center and maintaining an online knowledge base still make sense?  This example may seem far-fetched, but a successful organization spots game-changing trends early on and adapts quickly.

To get people on your side, describe the benefits they derive from the community in terms meaningful to them. They will tell you their pain points, but here are a few examples to get started:

• Sales — close more business and find the people who have the means, need, and urgency to buy
• Support — reduce customer calls and increase customer satisfaction leveraging social media
• Marketing — find new leads and develop opportunities by building trust in the community
• Finance — improve business performance and quantify the community ROI with real-world data
• Engineering — innovate faster with community input and reduce time to market by developing only what is needed
• PR — build brand awareness and influence perception in the marketplace by amplifying community voices
• Management — nail the vision, mission and leadership by listening and interacting with influential community members

Why enlist stakeholders? None of your efforts in measuring and analyzing the impact of your community will matter unless you can effectively communicate the value to these decision-makers.

Look at the Big Picture

What happens outside of your community matters. The challenge is filtering through the noise and finding the person, organization, or system that can help make or break your community, and vice-versa. For example, customers are quick to adopt new tools if they are a) easier and b) save time and c) convenient. That's why many are bypassing traditional ways to contact a company when they have a problem, and using twitter and Facebook to post problems and complaints. Companies are listening and leveraging these platforms to support their customers, and many are encouraging customers to "friend" them on social networks.

Smart companies are going a step further, and integrating customer data collected on social networks with existing information held in private customer relationship management systems. This knowledge enables them to gain a much better understanding of the customer — likes, dislikes, habits, and so on — which gives them a competitive edge.

Think about customer touch points, or the interfaces where customers, prospects, and employees come together, and ask yourself if your community plays a role. Examples:

• Company Web Site
• Contact Centers
• Social Networking Sites
• Trade Shows / Conferences
• Listservs
• Search engines

Reach out to the people who run these touch points, and collaborate with them. For example, how can the in-depth knowledge of support engineers benefit the community? Could the community contribute to driving traffic to the company web site? Can the SEM campaign be augmented by seeding key words on the community? Should new members be encouraged to friend the company on Facebook and twitter? The synergies may surprise you!

Define Success

Ask yourself, what does success look like? What will change? How will you know you are progressing — or not? Working with your stakeholders, paint this picture and set goals (general intentions) and objectives (tangible, precise) for the community. To track progress, you'll need key performance indicators, or KPIs (metrics are the things you measure).

Think of a KPI like the steam pressure gauge on a locomotive. The needle rotates in a circle, with green, yellow, and red zones. The engineer adjusts variables like fuel and air to keep the engine running in the optimal green zone. Your task is to come up with the KPIs, or "big dials," for your community, and to identify what you can change to keep the needles pointing in the right direction. Here are a few to get you started:

• Customer Satisfaction — average survey rating
• Member Loyalty — percentage of members signing on each month
• Number of New Members — people joining the community
• Percent Questions Answered — number of questions on discussion forum awaiting an answer
• Pages Created — number of new community-contributed documents 

Tracking KPIs over time also helps you to spot trends that may affect your objectives,. When the "needle swings to the red" and stays there, the KPI alerts you to conditions that require your analysis and attention. For example, if member loyalty is falls over a three month period, it could mean any number of things — a seasonal drop-off, a lack of fresh content, a competing new web portal, and so on. You at least know where the problems (or opportunities) exist, and that is half the battle.

Summary

Companies are waking up to the business value of online community and social networking, and many are still wondering how to go about this. You can guide them through uncertainty using what your community is telling you everyday — you just need to know where and how to listen.

Risks and Rewards for Community Leaders

If you're involved in managing a community, a social media program, or thinking about starting an initiative for your company or yourself, congratulations.  You're a leader! As David Meerman Scott said in a recent episode of Hubspot TV, we are still in the early stage of the revolution. People diving in now are still seen as leaders.

As a leader, you need to think about risks and rewards, and what you are prepared to do to truly make a difference. Innovation in community and social media starts with taking risks, and being willing to challenge the way people and companies think about themselves and their clients.

It’s a journey, and not a process, and you need to be out in front and experimenting every day. Learning from your successes and failures is the only way you can really grow. If you're not just a little bit scared, then something is wrong.

Business hasn’t really changed all that much, really. Our livelihoods depend on growing our profits and customer base. But, the world we do business in has changed.

The opportunity we have in this new world, is to leverage powerful relationship tools like twitter, Facebook, FourSquare, _____, and communities, to connect with our customers, gain their trust and credibility. By helping them to be successful, and providing experiences that make them feel good about themselves. we're first in their minds when it’s time to buy. If we can have fun, help others, and be recognized for our contributions, all the better.

This doesn’t happen overnight, and having a clear vision, dedication, and discipline counts.

Zappos.com leveraged twitter and innovated in customer services. Not just a shoe company, but real people who listen to and care about their customers. Social media and service is part of the Zappos "DNA" — every employee is trained on how to engage with customers using the Web. Customer complaints and issues are seen as opportunities, not problems.

This approach has won Zappos many loyal customers. In turn, they have shared their great experiences with friends, family, and the world using social networks and word-of-mouth. Zappos successfully raised an army of loyal customers which translated into bottom-line benefits, and even caught Amazon.com's attention.

What separates innovators from those who follow is a courageous spirit, risking much with no guarantees. In today's ROI-driven environment, garnering the support for brave new ideas is challenging, but the beauty of social media is that there is room to experiment — and make mistakes. And, maybe even win big.

I've had my share of projects that did not catch fire, and each brought me a little closer to success for the next venture. The key is seeing each failure as an opportunity to get it right the next time, even while you might be taking heat from your boss, customers, or your own worst critic — yourself.

Have any examples risk-taking resulting in cool innovation? I'd love to hear them.

Why Differentiating Your Community Matters

Specializing in a unique product or service that solves your customer's problems, or finding your niche, is critical to earning profits in a competitive market. To stand out among competitors, businesses need to understand their differentiation and be first in customer's minds when it's time to buy. 

The success of your community also depends on differentiation. Your objectives may be different (such as growing membership instead of increasing revenues), but you are competing for an arguably more precious resource than dollars — attention.

So how do we stand apart, and drive important behaviors like repeat visits, time spent on the site, and referrals on our communities?

Let's turn to our own experiences as consumers. It's easy to come up with the reasons why we choose one company over another, such as:

• Service – driving across town to have your oil changed because you like how your garage treats you
• Experience – walking into an inviting place like the Apple Store and being greeted with a friendly smile
• Convenience – popping into the Starbucks next door to the office in the morning
• Choice – ever walked down the cereal aisle at the grocery and felt overwhelmed by all the brands?
• Exclusivity – the feeling Lexus and BMW owners enjoy knowing their cars are finer than most. Really.
• Relationship – being on a first name basis with your physician
• Location – RedBox DVD rental kiosks placed in MacDonalds restaurants. Dinner and a movie!
• Loyalty – insisting on Canon cameras, Tide detergent, or any number of beloved brands

These are all examples of firms providing value that fulfills a unique need for a specific group of people. Your probably thinking about similarities with your community, but here's the key: you can't be all things to all people.

There are only so many hours in the day, and so much leverage you can squeeze out of technology, and other people. To achieve true differentiation, you'll need to decide on one or two qualities that makes your community special, and make sure you are doing these things better than anyone else.

Let's use location as an example. Many of you run support communities for companies with established web sites, and its common to link to community resources from existing pages. What about going beyond links, and surfacing discussions and expertise directly? Use the "RedBox" effect to your advantage — draw in web site visitors and engage them via the community.

Excellent service is hard to find, and another ripe opportunity for differentiation. Look for ways to delight and surprise your members at every touch point. For example, it's easy to send new members a generic welcome email. Adding small personal touches, like your signature and contact information, tells people you care. Better still, a quick thank you phone call might even get you a "Wow!" response.

Exclusivity is a cachet that takes significant effort to build and maintain. If you want people to seek out your community and ask to participate, your community will need a carefully guarded "star" quality. One example: a "relationship and opportunity network," with access to a powerful and well-connected group of people, such as Cx0s of Fortune 500 companies. 

How does your community distinguish itself? Please share examples of differentiators you are using effectively today.