A few days ago I was searching for statistics related to communities created for customers. I was curious whether any hard research had been done in recent years that would validate my long-time assumption that they would generate great value. There are many ways for customer communities to create value, including support products, up-sell services, entrench brand loyalty, save costs, improve operations, identify innovative solutions, and generate new product ideas/improvements.
One interesting set of statistics I found has to do with whom people rely on or trust. Not surprisingly, people rely on people they know:
80% – friends
69% – work colleagues
27% – manufacturers or retailers
14% – advertisers
8% – celebrities
Any company with a product would obviously want to be recommended by friends and work colleagues. There is a big drop in the trust level people feel for businesses, advertisers and celebrities! Communities are built upon trust, and foster trust among members. They can be a great way to get substantive referrals and act as a great marketing channel — just not in the traditional way.
Many companies have attempted, at great cost, to create customer communities in the past few years. The Wall Street Journal reported that most of these communities are failing. Why? Because they are focusing more on what the community can bring to the company than they are on investing in the communities. There is also a lot of competition for the members’ attention today, too, which makes it even more important to focus on keeping the community relevant to the members. The three most common reasons customer communities fail are:
1. Designers are enticed by fancy technology
2. They lack proper management
3. They measure the wrong things
How to Get Game Changing Results
Game changing business results occur in perhaps obvious ways in business < --> customer communities. For example,
Community members create content (and content attracts members) More members = more content (although initially, an organization may have to purchase or seed the content to create an attraction) Good content that matches the interests/needs of members will attract more content and members
And this last, extremely important point…
The easier it is to do transactions on the community site, the more dynamic the interactions will be…and the more members and content you will get.
Technology infrastructure is obviously important, since getting that wrong can doom the community out of the gate, but community is not a technology problem. Social infrastructure is important for member satisfaction. Neither of these, however, affect the economics a company desires from a business community investment — the economics of increasing returns. Relationships have value. There is a lot of great data and many case studies to show that good relationships shorten sales cycles, speed up adoption of new products, increase efficiency, reduce turnover, lower recruitment costs, eliminate or reduce law suits and legal fees – all of which adds up to a better bottom line.
Helping a Community Succeed
Before I mention some critical success factors for business < --> customer communities, it’s important to note that there are two groups with a strong interest in the success of the community, and the groups may disparate views. Business leaders and community members can have different expectations about the community and its purpose. For example, what’s the purpose of the community? How will success be measured? What do you want to achieve? Who should manage the community? Who owns the content generated? It’s important for community planners to identify several key people in the anticipated community early in the process, and let them bring the voice of the customer to the design table. (The same people will then be instrumental influencers in helping the fledgling community get off on the right foot.)
What are some of the factors that make a business < --> customer community succeed?
Clear goals and purpose. Does the focus hit a pain point? Does it make people want to help? Businesses obviously want to improve business operations and/or enhance their brand to protect their customers from poaching by competitors. Unfortunately, that is not why the members will be joining. Make sure the “what’s in it for me”, with “me” being the customer/member, is the focal point.
Governance by the community itself. Strong communities are self-governing. This can be a tough issue for business leaders to get past, when they are used to controlling a group’s dynamics. Remember that members of the community are volunteers, and they have their own agendas for being there. Articulate the company’s desired outcomes, then let the community determine how to get there.
The right talent — both moderators and members. Having trained and experienced moderators is especially important in the beginning. They will create a welcoming environment, encourage dialogue and establish the right kinds of group interactions. The right members are also important. There needs to be a critical mass of members, since only a fraction of them will participate at any given time, and they need to be members with direct experience with the product/service. Remember the 50-20-10-1 Rule. 50% of members will actively participate, 20% will actively consume/produce content, 10% will chime in to rate/vote and give opinions, and only 1% will develop/innovate content.
Time/commitment. Communities run on trust, and it may take months for the community to establish the right level of trust. Businesses should not start a community and expect quantifiable results for a period of time, usually at least three months. The business is going to have to show it is committed to the community by not rushing the natural development of the social relationships that will give the community its true value later.
Topics that matter. Moderators and key customers can help to drive the discussions initially to topics that are meaningful to the community. By skillful moderation, they will draw in members to comment, and draw out other topics of interest. Businesses should be cautious about focusing questions/topics too specifically on the business’ needs or point of view.
Collaborative interaction and group structure. This is the ideal to aim for, and it will emerge organically in the right technology and social environment.
Measure the right things. Avoid measuring traditional web site statistics (page hits, unique users, log in sites). A few of the meaningful types of things businesses need to measure include: type/scale of collaborations, member engagement, referrals, lurkers who become active, member satisfaction, comments per post, average time for response, product improvement ideas, and percentage of posts that get an answer.
In other words, create a critical mass of good minds, and then stimulate them to spark off each other. Everyone will be satisfied when that happens. Simple, right? :-) Here and here is further information that might be useful.