Category Archives: Communities

Greg is one way to make money out of social media: three extras

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It’s been claimed that customers are three times more likely to buy when engaged in community1. So here are three connected thoughts on how to make and lose money from your online community I’ve come across over the long weekend, following on my recent post around the tricky issue of monetizing your community. That last one links to Lithium’s Dr Michael Wu’s final post on targeting influencers:

1. [For social media marketers, 2010 will be the year that...]…they have to deal with the three Cs of backlash: consumer, community and client. Consumers (a.k.a. “human beings”) are already expressing frustration with community members who turn out to be marketing shills. Community managers will crack down on marketers-posing-as members because of the impact on trust and participation in their sites. And clients will either pull back or redirect their social media efforts when they discover that, surprise! marketers don’t have the answers on how to actually reorganize their customer relations and R&D teams to meet the demands that social media marketers have awakened.

Alexandra Samuel, from Social Signal, quoted in ‘Collective Wisdom: Some expert thinking on five social media questions as we enter the first decade’

2. RT @rhappe: Big decision point – is the community meant to make money itself or does it play a supporting role or as new channel -@adamzawel

3. Boost influencers’ cred with your users by making their content more searchable, & promote it via tweets & bookmarking: http://ow.ly/1FUtM

As a real world analogy for the role of the community manager in earning member’s trust and in turn helping monetize the community in a sustainable way I like what Altimeter’s Jeremiah Owyang says in the introduction to ‘The Community Roundtable’s State of Community Management – 2010′ report:

“To be successful, companies, and their internal cultures, need to empower community managers to help customers and employees – just as they would in a physical store.” This is nicely reflected in a survey by ComBlu which revealed one of the best online communities (B2C) they came across comes from retailer Sears: “One of these standout communities was “MySears”. Its tag line, “Get advice before you buy,” reinforces that this community is about helping consumers, not selling specific products.”

Indeed to come full circle to the reason for this post the report’s authors acknowledge while “some areas of social media and community strategy have shaken out, other areas are still being discussed for their efficacy in various situations”, including “when and how to monetize, as well as, what is the right mix of products/services”.

What I’m sure would help in the subject of monetization is a way of measuring with the majority of readers (‘lurkers’) of a community, whether they use information they read to guide their purchasing decisions. There’s a nice (B2B) use case example below from Siemens reference in the report which points to how offline and online conversations can assist cross-selling. Jump to page 18 of the slideshare to get straight to the example.

The bottom line is that online communities can deliver value in a number of ways, you have to figure out what works best for you.

In closing consider these community ROI stats  from Bill Johnston to underline the potential value of your community:

a. Community users remain customers 50% longer than non-community users. (AT&T, 2002)

b. 43% of support forums visits are in lieu of opening up a support case. (Cisco, 2004).

c. Community users spend 54% more thancon-community users (EBay, 2006)

d. In customer support, live interaction costs 87% more per transaction on average than forums and other web self-service options. (ASP, 2002)

e. Cost per interaction in customers support averages $12 via the contact center versus $0.25 via self-service options. (Forrester, 2006)

f. Community users visit nine times more often than non-community users (McKInsey, 2000).

g. Community users have four times as many page views as non-community users (McKInsey, 2000).

h. 56% percent of online community members log in once a day or more (Annenberg, 2007)

i. Customers report good experiences in forums more than twice as often as they do via calls or mail. (Jupiter, 2006)

References
[1] The claim that:  “Customers are 3X more likely to buy when engaged in community” was reported in the Online Community Unconference: Book of Proceedings, June 10, 2009 in Mountain View, CA.

Welcome to Internet World 2010!

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If you’re attending Internet World 2010 today (twitter hashtag #iwexpo) look out for the Salesforce-inspired guerilla marketing protest from Rackspace – “No need for inhouse servers”.

And inside Earls Court 2 you should go talk to the friendly team behind new the hosted online community from zingzam, at stand E8150. They made a big impression on me!

Helping your community manager to make money through influencers

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As I understand it what Dr Michael Wu saying in his most recent blog is that using social network analysis (SNA) to find the right influencers to influence target users’ purchasing decisions (bearing in mind the value of the targets’ first online activity around a product as the indicator when to start the persuasion process) relies on the finding the right type of influencer – which is not the one with the most friends as the connection, or with the most discussions around a product, but the one with the most recent discussions about the product: relationship + product discussion + timely = best chance of success.

The Right Content at the Right Time: Influence Analytics 3 by Dr Michael Wu

What this strongly reminds me of is my own blog post (‘Greg is one way to make money out of social media’) about how communities managers can potentially play a role as influencers if done properly:

What I want to say for the benefit of companies trying to see how to make money from using social media in the marketplace is to see your own community manager if you have one, and other partner’s community managers, as influencers in their own right.

I pretty sure I’m not breaking any ethical code by saying that, after all your community manager isn’t just going to start spamming the community with product messages – that wouldn’t work. Quiet the contrary, what I’m talking about is the subtle, patient task of persuading members of a community of the value of a particular offering – which requires both intelligence & integrity.

Now after reading the latest piece from Dr Wu, this suggests to me is two things. Firstly that your community manager using SNA tools for large communities, or their inside knowledge coupled with community anayltics for smaller ones, can ‘lead the charge’ to find these right influencers.

Secondly it suggests that they themselves take on this role indirectly by nurturing debates around certain products, nurturing influencers who command attention, and then helping them reach the right users at the right time.

This avoids them directly playing the role of influencer as such, but does give them the power of delivering this tool as a means of creating revenue which has long been the holy grail of community management.

Practically realizing that tool is a combination of the SNA/analytics, plus consultancy work with the community manager to help deliver this.

Drupal 7 is slower but more scalable

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Nice to hear from the BCS about Drupal 7, with more content making it slower but more safely scalable.

By all accounts it should have been delivered before now, but because of lack of contributors it’s slowed right down – I wonder if any UK-based Drupal developers are helping out in this respect?

The new release of popular content management system Drupal will be slower, but more scalable, according to its creators.

Drupal 7, which is already behind schedule, is expected to be launched in either summer or autumn this year.

The open source software, which is increasing in popularity, is now thought to power around one percent of the world’s websites.

The upgrade will feature over 70 new modules and contain a substantial growth in code size.

The announcement came at the Drupalcon conference in San Francisco.

Many UK based developers booked to attend the conference have had to watch proceedings over the net because of flight disruptions.

For the super-geek there’s the added bonus that Drupal 7 connects the open source platform into the semantic as Drupal 7 adds Resource Description Framework (RDF) to mark up content such as blog posts, comments, and tags from different sources, so you can present them in your own site or searches. Apparently it’s like turning the web into one vast database – also known as the semantic web. [Or for the complex-minded, web 2.0 + semantic web = web 3.0].

Greg is one way to make money out of social media

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It’s a standard part of community manager jobs specs to say that part of their role is to identify ‘influencers’ such as key bloggers in a particular sector. For example working at the ICAEW as the community manager I worked with Denis Howlett, a key influencer in the accounting and IT sector. But what I also did in that role was work with the key partner Microsoft, to help them play an influencing role in the community – discussing how best to approach blogging in It Counts for example. As community manager guru Connie Bensen writes in ‘Enabling your Influencers’ this job of identifying & enabling influencers is key to success:

“This is a Community Manager’s most important function. It’s not marketing, advertising, nor social media, it’s just plain old fashioned expressing yourself about a product that you believe in. It is word of mouth & the power is phenomenal. You can’t buy it & you can’t force it.”

But the point I want to make today is different. What I want to say for the benefit of companies trying to see how to make money from using social media in the marketplace is to see your own community manager if you have one, and other partner’s community managers, as influencers in their own right. I pretty sure I’m not breaking any ethical code by saying that, after all your community manager isn’t just going to start spamming the community with product messages – that wouldn’t work. Quiet the contrary, what I’m talking about is the subtle, patient task of persuading members of a community of the value of a particular offering – which requires both intelligence & integrity.

In other words community managers should be considered influencers in their own right. After all they get to know a community better than most; they get to know the issues better than most; they should know the needs of members better than most; so surely they should be considered a key influencer themselves? Traditionally the role has been seen as someone who should stay ‘objective’, and be the advocate for members first and the host organisation second. But in the reality the needs of business suggest otherwise. Your community takes advertising, it takes sponsors blogs, so why not allow the community manager to advocate a particular product. After all isn’t that what communities set up by the Dell’s and IBM’s of this world do? Don’t get me wrong, this approach applies to both b2c and b2b communities.

Take for example a company which is trying to create a social media strategy, but which wants to make sure it’s going to deliver value for money. One of the obvious way to achieve this commercial goal is to consider what the existing business partners are doing. For example if you are a global business service organisation partnered with a number of airlines, there’s a good chance that a brief audit of your partners will show you they already have a presence on Facebook with a fan page as with Virgin Atlantic, or are starting a community as in the case of Ryanair.

In the case of Virgin Atlantic their community/forum manager Greg Hamling is in a key position of influence with Virgin Atlantic customers. So my question is if you were approaching Virgin to discuss your social media strategy and the mutual benefit of endorsing your product when relevant, wouldn’t you want to include Greg as a key influencer? From reading his replies to customers, and from the look of him from his Facebook profile, he’s certainly the kind of guy who could pull it off.

Update: I’ve just come across this expert post on the role of influencers, and what they need to do with their ‘targets’ to be effective, by Lithium’s Principal Scientist of Analytics Dr Micahel Wu: The 6 Factors of Social Media Influence: Influence Analytics 1.

A Simplified Model of Social Media Influence

His analysis makes good sense to me, emphasizing from the target’s point of view that influencers need to have credibility and to deliver relevant information at the right time and place, for the target/s to take action. Here’s what I said in a comment:

What you’ve written about influencers also accords what what I’ve read recently, that it’s not necessarily the size of the influencer’s network, but their passion which is key (which I’m guessing may relate to their perceived credibility).

Bearing these points in mind I’ve asked in a recent blog {this one} as to whether community managers should themselves be regarded as key influencers (& therefore a potential revenue driver), despite the risks involved in turning them into “glorified marketeers” if not done correctly.

What are your dirty dozen?

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In between freelance contracts I’ve been trying to come up with a neat summary of my skills & experience to sell to potential new clients/employers, and came up with the following ‘dirty dozen’. What are yours?

  1. An ability to not only understand measurement as it’s been, but also to understand how to evolve and implement new measurements to apply to new initiatives.
  2. Expertise in understanding how to measure the impact of social media, using effective KPIs. In particular focusing on the business objectives, targets, and results – and making sure the in-house tools can capture the quality of conversations, and target ‘influencers’ – its not necessarily who has the most connections, but the best location in social networks.
  3. Experience developing social media strategies, together with tailor-made KPIs, for b2b organisations including the IET, ICAEW and CIMA for example.
  4. At global medical software start-up MedicExchange I was responsible for creating and implementing integrated online/offline marketing campaigns, working with content partner Reuters to improve our competitive position.
  5. Introduced internal social tools from project management to social benchmarking, helping MedicExchange acquire a value of $15m by the time of my departure in December 2007.
  6. Launched the new ICAEW online community IT Counts, with £100k sponsorship from Microsoft UK, achieving the launch target membership level within deadline, and winning a web 2.0 award in the process in 2008.
  7. Advised marketing & PR teams on good practice whether in working with Microsoft UK’s PR staff on how best to blog on the site, through to advising organisations on best practice internally for use of social media to promote and grow their online communities.
  8. As a consultant with SiftGroups I helped facilitate a team culture working with community managers and developers which put customer needs at the forefront of their work, helping create an award-winning drupal-based social measurement tool in 2009.
  9. Experience in setting up social tracking tools using Twitter and Google, and using these to target bloggers and social networks as part of a social media engagement strategy for new communities.
  10. Success in advising community managers in how to turn negative customer conversation starters into positive outcomes, based on a ‘figure of eight’ positive feedback strategy between corporate content and customer conversations.
  11. As a professional who embraces precedent, but also who is willing to challenge thinking and create new solutions I developed the concept of feedback loops between content and community, to include the relationship between the community manager and top contributors, and between a community and external social networks, for my social media consultancy work in 2010.
  12. As well as blogging on social media and online community issues for over four years, I helped run the Headshift corporate blog, managed bloggers for SEO purposes at MedicExchange, managed professional bloggers at the ICAEW, through to training the CEO & staff bloggers at CIMA supported by a tailor-made social media policy.

Latest feedback thoughts on LinkedIn

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Check out the current discussion with Principal Scientist at Lithium Technologies, Dr Michael Wu, on the subject of the 90-9-1 rule, feedback loops, and the rest, in the LinkedIn Online Community Manager Group.

Viral loops as a subset of feedback loops in social media

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I like Jeremiah Owyang’s matrix with the embedded point about the viral loop value, to drive engagement in advanced integration of one’s corporate site with your social media strategy.

Accords with my views on how to grow online communities (where I’ve seen viral loops are a subset of feedback loops) – so using such a strategy both in the viral sense as above with with users, and in terms of establishing feedback loops with top contributors.

Any circuit-design type simulators out there which could plug into your web analytics data to allow you to test out viral campaigns?

I sketched this out a bit more on a recent slideshare: http://www.slideshare.net/stuartgh/feedback-loo…

It’s also worth reading the comment from Bert DuMars on the value of using consumer generated product reviews published on one’s site as a powerful feedback loops for driving performance:

When you integrate CGP reviews into your branded website you are inviting additional conversation about your products and services. You are opening up to your consumers and allowing them to begin a conversation with you about what they like and do not like about your products.

If you are open and honest (showing both positive and negative reviews) you not only learn how to improve your products and services, you are given the opportunity to show that you care about your consumers. We have seen culture change at our Rubbermaid and Dymo brands based on CGP reviews.

We can respond faster to feedback, especially negative, and reach out to consumers to learn what went wrong. We can then adjust the product or service based on that feedback. Think of it as an ongoing, near real-time, feedback loop and a gift from your consumers.

Who believes in the 90-9-1 rule?

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A second question on LinkedIn from Dr Michael Wu, Principal Scientist at Lithium Technologies:

Is there something more accurate and precise than the 90-9-1 rule out there? IMHO, Lorenz Curve and Gini Coefficient. Do you know anything else? The Economics of 90-9-1

My answer as part of yesterday’s Online Community Manager group discussion kind of sums up where I’ve got to after reading Dr Wu’s blog previous post and this latest one:

I like the approach you have using economics-based models. I’ve come at it from a more particpant-observer type sociological point of view, so what I’d like to see is for your analysis to return a new ‘rule of thumb’ based on your in-depth data analysis.

The 90-9-1 rule is useful to community managers because it helps provides a starting point for understanding, as Arantza says above. For example it would be useful to know from a practical point of view whether for more open communities (as opposed to niche market research or project based communities) the 90-9-1 is a useful tool for helping launch a new community.

It’s partly about creating a social dashboard that can explain to a member of senior management why a certain kind of community activity may help or hinder greater participation.

I did this kind of work previously in the National Health Service, creating simple reports on the success of a national public health initiative, which worked well for senior managers (government ministers in that case).

So I come back to the challenge, the age old relationship between lab & fieldwork if you like, what would be the new rule of thumb/thumbs?

I’ve chosen to highlight multiple feedback loops as a useful tool, to help drive top contributors for example (taken from the HP Labs research), but I take your point that for commercial ROI purposes more precision is required. To put it another way in such a dynamic social context how does precision allow you to create heuristics for day to day community management?

Do you believe in the 90-9-1 rule?

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A question on LinkedIn from Dr Michael Wu, Principal Scientist at Lithium Technologies:

Do you believe in the 90-9-1 rule? Do you think it is a hard and fast rule, or do you believe that it is just a rule of thumb?

What do 10+ years of data across 200+ communities say about the 90-9-1 rule? http://is.gd/aNWvx

My answer as part of the Online Community Manager group discussion kind of sums up where I’ve got to, hence why I thought it worth reproducing here:

Hi Michael,

It’s getting a little late on Friday evening here in the UK but I wanted to share my experience in case it’s of use to you.

I tried to use the 90-9-1 rule as a heuristic to help guide community development here: http://www.siftgroups.com/blog/heuristic-tools-help-community-managers – and used that rule of thumb in designing a drupal-based community metric package to help monitor the balanced between readers and contributors in various facets of measurable development.

In addition I believe it’s worth considering the value of designing feedback loops, so that your top contributors for example are rewarded for their efforts. I did a slideshare sketching out that concept here: http://www.slideshare.net/stuartgh/feedback-loops-3363641 – in fact that got me thinking about the broader topic of ‘viral loops’ but that’s another story with I was sharing with some great people at the Social Media World Forum in London this week.

Otherwise thinking about the 90-9-1 rule also has underlined to me recently the value of measuring offline use of online communities, especially to the majority of ‘readers’. I’ve blogged on that aspect here: http://www.stuart-hall.com/2010/02/08/measuring-e2-0-evolution-of-hello-bah-com/

Hope that’s of use.

Cheers,

Stuart G. Hall
@stuartgh

PS: I’m off on a skiing today but hopefully I’ll get chance to read Dr Wu’s in-depth piece on the subject when I get back from Rauris in Austria!

Pic from Ava Maria Seven’s photostream.