Online Community ROI

Occasionally I’m asked to explain what the purpose of social media is for individuals and businesses. Too often I’m greeted by sceptical views and a strong belief that social media encourages people to waste time. First of all, TV wastes time. Social media enables participation.

As Clay Skirky points out in Cognitive Surplus, “Someone born in 1960 has watched something like 50,000 hours of TV already, and may watch another 30,000 hours before she dies.”

Clearly, we have an excess of time. We are idle when taking the train to work. We are idle after dinner and once the kids are in bed. Despite our good intentions of maximizing our twilight years we tend to find other things to do rather than build that boat or write a novel. As much as we’d like to believe that we are all making the most of all of the hours in the day we do have some form of down time and it’s within this time that people chose to participate online.

The return on investment is the part that many businesses struggle to define. In meetings online community advocates are shouted at by finance to, “show me the money!” Top dogs want proof before business as usual gets derailed.

Here are a few quick facts to throw into your next presentation:

• Community users remain customers 50% longer than non-community users. (AT&T, 2002)
• 43% of support forums visits are in lieu of opening up a support case. (Cisco, 2004).
• Community users spend 54% more than non-community users (EBay, 2006)
• In customer support, live interaction costs 87% more per transaction on average than forums and other web self-service options. (ASP, 2002)
• Cost per interaction in customers support averages $12 via the contact center versus $0.25 via self-service options. (Forrester, 2006)
• Community users visit nine times more often than non-community users (McKInsey, 2000).
• Community users have four times as many page views as non-community users (McKInsey, 2000).
• 56% percent of online community members log in once a day or more (Annenberg, 2007)
• Customers report good experiences in forums more than twice as often as they do via calls or mail. (Jupiter, 2006)

Statistics provided by Bill Johnston

The simple truth is that consumers don’t want to be passive. We don’t buy something these days without doing a little research. We ask our friends and family what they recommend. We ask our co-workers and post on Facebook or forums. We have access to our own “experts” who know us better than any marketer. In a world overwrought with too many products and services competing for our attention we need more information as consumers to make informed decisions.

Image by Creating Passionate Users

The psychology of the consumer can no longer be assumed. How a product is used is not always how it’s advertised and the ROI of opening up a dialogue is discovering the true potential and reach of a commodity. Brand longevity is a result of faster processes to address customer service issues and quicker innovation. Customer loyalty is possible when brands are transparent and stop taking their customers for granted. By inviting consumers into the production space fewer advertising costs are incurred.

Think about how an online community could improve your business:

• How many customers do you lose because your current processes don’t allow you to respond fast enough?
• How much do you spend on advertising to new customers?
• What would change if you focused on empowering existing customers to spread the word instead of expensive TV or print campaigns?
• Can your community members answer customer’s questions for you?

Thinking about becoming an online moderator? Are you ready for parenthood?

There are all kinds of excellent resources out there about community moderation, but the absolute best practice is effective parenting. Both kids and community members need to know where their limits are in terms of their behaviour. Rules make us feel safe. As much as we like to think all we want is freedom the limitless unknown doesn’t bring out the best in most people.

The role of a moderator is not to spend their time hunting down every instance of bad behaviour. Just like the role of a good parent isn’t to monitor their children 24/7. The best way to teach is to lead by example. When a person is micro-managed they learn that they aren’t perceived to be capable of making good decisions. Consequently a person who is suppressed from forming their own better judgement hasn’t any.

Modelling is by far the best way to lead a community. Instead of focusing all the moderation time on tracking down rule-breakers look for the best examples of community participation. Spend your time reinforcing these members and rewarding their contributions. The more you push forward good behaviour the less reward there is for members to abuse the community. Just like teaching a toddler not to throw a fit community members need to learn the right way to voice their frustrations.

Time-outs are effective. The time to intervene is when negative behaviour affects you personally. Only when a child’s problem becomes a parent’s problem should they get involved. Members need to learn how to manage issues on their own and shouldn’t be encouraged to report abuse instead of speaking up for themselves. If a child hits another child it’s important for a parent not to take on the anger or emotion of the victim. Instead hitting should be discussed and use leading questions to allow the child to reach their own decisions about how to react. By reacting on behalf of the child a parent is taking the child’s ability to think for themselves away from them. No one learns from lectures or emotional reactions. We all learn best when able to form our own opinions through supportive guidance.

We guide and lead as moderators. We’re not a Gestapo or private police force. Raising responsible kids who are considerate and thoughtful isn’t hard when parents get out of the way and let kids learn from their mistakes. Swooping in to rescue members doesn’t teach them how to take care of themselves and moderators waste too much time solving other people’s problems. Managing an online community is extremely rewarding – just like being a parent, but the value isn’t from how strictly you enforce the rules. The value is from enabling empowered individuals with common values to work together to solve problems for themselves.

Monetizing Online Community

Monetizing online communities

View more presentations from Jessica Lowry

Your Community Manager is an Artist: Let’s Celebrate CMAD

January 24^th, was Community Management Appreciation Day (otherwise known as CMAD). It’s a new role in many companies and there isn’t lots of information out there about best practice, etc. Many companies hide their online community team for fear of disgruntled customers pulling a Travis Bickle. (I’ve never heard of anything like that happening, but it seems to be a common ‘security’ measure.) So it’s really important to celebrate these vital individuals who are commonly unseen.

An interesting thing about being a community manager, or a moderator, is that every company views this role in their own unique way. A community manager might be a part of the marketing or PR team at one company and a part of the customer service team at another. Jeremiah Owyang has created a great post about the corporate view of a community manager.

In truth, the community manager is neither marketing nor customer service. The community manager is something entirely unique from traditional departments. I believe that the community manager is a storyteller and an artist. A storyteller who understands how to lead groups of people down a common thought. An artist who inspires people to participate and share their own content.

If the community manager is to sit in any particular department it should be within an innovation team. Thought leadership is very important because too often the tools cripple an online community to reach greater heights. It’s sometimes hard to see the dollars and cents behind registered users the tools provided are minimal and horrible to use. Businesses are thinking, “now that I have an email address I can push products and potentially sell something”- wrong. This assumes that you know what the registered user wants, but in actuality; the registered user is a guide to brand longevity.

For a community to work there has to be a purpose for it, i.e. cultivating trust (sharing personal information), collaborating on editorial content, creating a tool, designing products, brainstorming ways to improve software, sell something, etc. The community manager’s job is to spot the top contributors and give them support. To build new chapters of the story which inspires members to flesh out details and develop the plot.

When regular users get bored of the same old conversation things turn negative quite fast. Regular members need another layer of engagement. Too often the loudest and most negative members end up sucking all of the energy and inspiration out the community. The focus gets lost in the reports of bad behaviour, spam and negative feedback. The individuals who are contributing to the story are the heart of the community.

Community management is about setting up a plot for fans to role play. Once the rules are outlined participation becomes a game. As an example, one of the first forums I managed was for a short lived Canadian TV series called Falcon Beach. Fans of the show loved to chat in the forum, but there needed to be a subtext–otherwise; the discussions quickly inflamed into arguments about who knew the most about the show and its stars. I decided to create a section for fan fiction; which gave the die-hard members a project that other members could rate and comment. Following my analogy I gave the fans a new chapter to write on their own. Although we don’t know what the story will be about we know the rules of creating the story. This made the fans feel like their participation was leading them to uncovering the unspoken thoughts of the show’s characters and helped the writers see their characters through the eyes of the audience.

Communities need a purpose- this is why Wikipedia is such a success. There has to be a common link beyond the initial motivation to participate; as well as, recognition for quality contributions. Otherwise, the vibe of the community turns feral and you’ll have a Lord of the Flies scenario on your hands. With the example of Falcon Beach it was very important to use the ideas from fan fiction and explore ways to involve the fans into the storyline of the show.

A community is a story that is never really finished; the real-time version of The Never Ending Story. This is why marketing or public relations cannot “own” an online community- you can’t influence it with promotions. Essentially, the community guidelines are the prelude to the story. The purpose of the community must be clear and sandboxes need to exist to house members who don’t expand the plot. The intention has to be very clear and the community manager becomes a gardener attending to the weeds and beautiful flowers. The result is a story that has a pulse and its own unique purpose.

How to Create an Online Network, part 2

It is always vital to conduct extensive market research prior to getting started. Within the early planning stage internal research and analysis needs to occur in conjunction with external research - all users including: moderators, admins and members will need to be thought through in terms of their unique perspective. Then decisions can be made as to the appropriate objectives to pursue, whether to keep membership restricted or open, and whether to recruit customers or prospects as moderators or external staff.

The community manager is the host of the community. This role requires a person who is able to rally online members to take action, complete their profile information, create their own content, and comment on other members’ content. The goal is not for the community manager to control member behaviour, but to teach them how to use the networks functionality.

Collecting feedback and observing how the members interact is vital for future enhancements and improvements to the functionality. The majority of testing should occur during a soft launch in order to trial the platform using a wide range of members in real-world scenarios.

Another aspect of the community manager’s role is to conduct real-time surveys by asking members questions about their experience. The aim is for members to take initiative in submitting feedback, but because the need for feedback is so high during the early stages the community manager will solicit feedback on a regular basis. Surveys should also be conducted using SurveyMonkey and Google Documents.

Recognise & Reward

Upon first arrival to the network a new user should become instantly aware that this is no ordinary network, but a community with a pulse. Before registering, a user will be presented to a barrage of positive examples for registering- most of these examples will be seen through a reward system; this could be both a financial incentive and a recognition incentive.

Each new member should receive a personalised email from the community manager welcoming them to network. Receiving some form of acknowledgement is the single most important factor in determining if someone returns or not. During the soft launch, the community manager never stops being the host for new members uncertain about how to participate.

The goal for every network is to be a vibrant and highly active community of content creators and content consumers. During the early stages, all of the rewards will likely be appointed by the community manager. These rewards are to recognise preferred behaviour and encourage members to participate on a regular basis.

Other benefits to encouraging members to take a personal interest in their fellow members is building brand advocacy. Members should develop a sense of ownership by submitting their opinions and sharing their time. This emotional investment translates into self-moderation. Self organisation will reduce the pressure on the Community Manager to be as highly active and visibly involved.

Online activities should always be transparent to the whole community; the rewards given for those activities need to be similarly transparent as well. Never act like Big Brother.

Consider the Source

I think it's important to consider the source- traditional media, newspapers don't want social media to be successful because they're scared of going out of business.

The reality is that Facebook- and any reputable social media network DOES NOT ask or require a social security number. You don't fill out your physical address nor do you need to fill out anything but your name and email address. Also, there are people canvassing for donations on nearly every corner of every downtown city centre right now - asking people for their names, address, and credit card numbers. That is more of a privacy concern to me then giving an online company superficial information about myself.

Today we are fractured from our network and we use social media to stay connected. It’s really that simple. The information that comes from participation within social networks provides valuable data that gives researches insights they'd otherwise have to spend years and stupid amounts of money to collect.

Privacy does not "vanish" - people are ignorant and give away info that is NOT required or asked of them. Participation is optional and what you disclose is in the hands of the participant.

And to quote from the article:

So far, this type of powerful data mining, which relies on sophisticated statistical correlations, is mostly in the realm of university researchers, not identity thieves and marketers.

I read about the Netflix lawsuit- I've been following it for years. At the end of the day - the movies people choose to watch is not a danger to their physical person. The information that was shared was done so to improve the internal algorithm of the recommendation engine. It breached privacy, but didn't open customers up to identity fraud.

..the customer data released for that first contest, despite being stripped of names and other direct identifying information, could often be “de-anonymized” by statistically analyzing an individual’s distinctive pattern of movie ratings and recommendations.

in reference to: How Privacy Vanishes Online, a Bit at a Time - NYTimes.com (view on Google Sidewiki)

Learn more about how to protect yourself online: http://www.privacy.gov.au/topics/technologies/security

Gameplay Matters

More and more company’s are becoming involved in social media. Some brands attempt to foster an online community or create online personas - to mixed reviews. Getting these types of endeavors off the ground is a huge undertaking and in no way should be attempted without a little research and hands-on experience. There’s nothing worse then awkward participation by someone unfamiliar or uncomfortable with social media. I don’t think McDonald’s needs a Twitter profile, I don’t think anyone read Kmart’s blog, and Microsoft's "advertars" (Avatars generated by advertisers to pimp their products in MMOs and virtual worlds) while creative and clever isn't the best idea. I believe it's important to know about the historical precedents in order to tailor a strategy for adaption and integration.

Online communities aren't as new as you might assume; they actually started with the creation of MUDS in 1975. Cyberculture, screen names, moderation, forums, avatars all came from these innovative games. Game creators learned very early on that one person can’t monitor everything and enlisted hardcore gamers to become the eyes and ears within the game; thereby, allowing the creators to focus on enhancing the overall experience. Moderators were provided with the tools to refocus fellow gamers - idle minds lend to idle hands. The role of a moderator is not to police other players, but to positively challenge them. I have observed that our current online communities operate quite similarly.

There are all kinds of ways to enhance the online experience. Apps and Widgets allow users to come to you instead of the other way around. By being dynamic and linkable they add a valuable service.(Going mobile is a great way to get ready for what's to come in the near future.) Another great innovation is trivia games and recommendation tools. Thanks to social media users can rate products and services negating the need for traditional marketing surveys. Also through association you can become memorable. Contributing to the experience in a positive way should be an objective instead of lurking in the shadows and noting every negative comment. The National Oceanic and Atmospheric Administration (NOAA) created a Virtual Tsunami in Second Life. It is not only a great example of eLearning it also illustrates how to become apart of an online community by enhancing the experience.

Another example is Sugar Inc. which focuses on creating communities for women between the ages of 18-49 and boasts 8 million monthly unique visitors and more than 50 million page views. Because the experience is transparent advertisers can speak to consumers directly without having to jump up and down to get their attention. The Sugar Network is comprised of 16 distinct lifestyle and entertainment sites covering topics that include celebrity, fashion, shopping, beauty, entertainment, food, health, etc. ShopStyle integrates fashion and design trends through social media and commerce tools to create a personalized shopping experience. Sugar Inc. has managed to create sites that feel as though the user is existing within a fashion magazine. Another shopping site called Threadless invites community members to submit t-shirt designs online, and the designs are then put to a public vote. A small percentage of submitted designs are selected for printing and sold through an online store. Creators of the winning designs receive a prize of cash and store credit. Also of notable mention: ebay, etsy, and Kaboodle.

I’m far more interested to engage with a brand through play then stark advertising that interrupts my regular online activities. As an example, if I went into a store and the sales staff kept trying to force me to buy a jacket that wasn’t my size and didn’t interest me I’d quickly run out the nearest exit. Advertising within an online community can be a delicate art. The best way to engage an audience is to provide them with a service that adds value to the user experience. Think of a street vendor selling hot dogs - setting up at rush hour in front of a bus stop might get you a few customers; however, setting up at lunch time inside a business park or beside a nightclub at last call is far better idea. Knowing your customer and giving them what they want at the right time is vital to increasing conversion.

Read more about "social commerce".