I recently received the 2008 Social Marketing ROI Report and Benchmarking Guide from Powered – an Austin-based company that creates social marketing programs that helps companies create communities around their brand and “insert the brand into the social fabric of the internet”.
Not only did the companies in the Powered survey report an average of $60 in returns for every dollar spent, but they also reported strong correlations in purchase intent, brand affinity and brand loyalty as follows:
Purchase Intent: Two-thirds of the respondents stated they were more likely to purchase to sponsoring brands products and/or services as a direct result of the learning experience offered in the community
Brand Affinity: Two-thirds of respondents indicated an improved brand perception of the sponsoring brand
Brand Loyalty: 63% of respondents stated that they had a more positive opinion of the sponsoring brand
The survey included results from over 112,000 people – or about 11% of the total 1 million people represented in the population of the 22 communities surveyed. Social marketing programs achieved nearly 5x the ROI of direct marketing programs and 30x the ROI of traditional media advertising programs.
From Powered Social Marketing ROI Report
The whitepaper goes on to suggest that Powered’s results are “virtually always above the industry norms” and advises marketers to study their target customers “to learn what kinds of social marketing and web experiences they would likely value the most, and to test those experiences”. In any case, these figures are quite compelling and point out that a managed community can drive drastic changes in brand performance.
In the implications and concluding thoughts, I found this excerpt to be particularly telling:
Social marketing as a relatively new non-traditional form of persuasive marketing communications is widely misunderstood. Most advertising and marketing executives assume that the term relates mainly to content generated by consumers. Beyond social marketing, marketers ought to carefully investigate and test every practical means of befriending consumers by new and established forms of marketing communications which do not involve straight advertising. This includes True Sponsorship in all its forms i.e. entertainment programs as well as educational ones, in all media; cause marketing; service advertising (e.g. helping the consumer to know which products to buy and how to use them); sponsored games; sponsored processes supporting consumer generated media; and new forms which no one has thought of yet.
So why doesn’t your company and brand have a managed community?
You can download the report for free from the Powered website after filling out a registration form. All serious social marketers can learn from this outstanding report. You can also check out the slides from the webinar (“This ROI is Too Good to be True”) they held to release the report at this link.
Another session at Forum One’s Online Community Business Forum (OCBF2009) touched on gleaning insights from your community ecosystem featuring Matt Warburton from LinkedIn and Barbara Lewis from MarQuant Analytics.
Matt started out by talking about his work with “Voice of the Customer” programs. He described the various options for running a program starting with in-person meetings with 10 to 15 users, phone conferences structured like a focus group and a private online forum or group to provide ongoing feedback.
Matt ended by sharing his best practices for Voice of the Customer programs:
Have participants sign an NDA
Limit tenure to a defined period of time (say 1 year)
Remove non-constructive and disruptive users
Require direct staff interaction in meetings, calls and forums
Require all participant inquiries to go through the community team
Barbara Lewis says that there are too many marketing activities to track for most companies – more than $400B per year in total – and almost all companies do not really know what is driving sales. Add in social media and the measurement gets even harder. Barbara’s company (MarQuant Analytics) uses sophisticated econometrics to help companies take their results and build models to optimize their marketing activities. MarQuant uses up to 3 years of real sales data and layers that in with external and other controllable factors.
Barbara’s recommendations included:
Tie social media to business goals
Identify data that measure business goal achievement
Capture appropriate data points
Analyze and monitor changes
Test various options
A copy of Barbara’s complete presentation is available below or on Slideshare:
Essentially Mike discussed that measurement breaks down into 3 categories:
Traffic - how many?
Behavior – what did they do?
Value - what did we gain? (such as revenue, leads, insights, brand awareness, purchase influence, content, etc.)
Mike went on to discuss the difference between traffic and behavior. Traffic is the function of outreach, marketing and content while behavior is a function of the user interface, feature sets, etc. Traffic and behavior do not equal value, but they help drive value.
Finally, Mike identified the 4 mistakes that impact community results:
Poor outreach
Too much input
Confused users
Enthusiasts and volunteers
According to Sylvia, Edmunds.com focuses on consumers and not on advertisers, and they rely on several underutilized and underappreciated metrics such as:
Registered visitors and guests (and the ratio of registered to guest)
% of time spent per session
pageviews per session
Sylvia’s recommendation is to sit down with the executive team and tell them why they want to know care about measurement. Then help them clarify and justify specific objectives for the community and identify metrics that will meet those objectives.
Social Media and Community Pioneer Randy Farmer was at Forum One’s Online Community Business Forum (OCBF2009) last week and he conducted a breakout session on context. I did not attend the session, but I did follow up with Randy’s notes on the forum’s wiki and from his website.
In Randy’s own words, here is what he’s up to:
One year ago I presented Context is King to this community and partially as the result of your feedback I decided to persue a year of consulting and book writing.
Presently I’m working with Bryce Glass of Yahoo! on a book for O’Reilly and Yahoo! Press entitled Building Web 2.0 Reputation Systems. The book is being written open-book style – there is a companion blog and wiki at http://buildingreputation.com where you can read our thoughts, draft chapters, and give feedback and even make edits to various commentary sections.
Essentially, Randy believes that context is the “new king”. Bill Gates originally said that “content is King” in 1996 and then “user generated” content was crowned the next King starting around 2003. Taking it a step further, Randy offers that “user generated content in context” is what really causes the transformation from a website into a community.
Here is a Slideshare presentation with more of Randy’s thoughts:
The second session of Forum One’s Online Community Business Forum covered community ecosystems with Jen Burton from Digg and Erica Kuhl from Salesforce.com.
Jen started with the comment that “it’s impossible to manage the ecosystem” when the community spans domain and geographic boundaries. For example, Digg’s ecosystem includes the Digg website, mainstream media, social media, blogs, Facebook and Twitter. The challenge is to monitor conversations about your brand across all of these channels. Jen takes a structured approach to monitoring conversations that include taking a high level view, determining how to react adn respond and then communicating the health of the community to executive management.
In summary, Jen noted that it is important to:
define the ecosystem but be open to change
provide tools for members to communicate with each other
monitor conversations without moderating
accept that swells and uprisings will occur
don’t forget to keep an eye out for the good times
Erica Kuhl described a similar ecosystem for Salesforce.com and noted that it is important to go where the conversations are which include official and unofficial pages on Facebook and groups in LinkedIn. Salesforce.com also gets immediate feedback and page-specific feedback using Opinion Lab. Additional feedback comes from discussions boards (1350 posts per month) and Idea Exchange which has received more than 10,000 ideas and 230,000 votes since it was launched. Erica is the primary author on one of the 16 Salesforce.com blogs. Finally, user groups are still very important to Salesforce and there are currently 85 user groups with 13,000 active members that conduct more than 60 meetings per quarter.
I really wanted to ‘live-blog’ from the Forum One’s Online Community Business Forum today, but the wireless access was less than desirable so I am settling for ‘same-day’ blogging.
Thor started out with an excellent analog of the “buffalo culture” or doing more in a land of less which is what the Native Americans who lived in the Plains perfected. The Native Americans learned to use the whole animal and he developed 6 themes around this topic:
Hidden value – Just like the Native Americans used the whole buffalo, we must apply these techniques to today’s environment by taking the trash and turning it into shiny objects. One suggestion was to move customer service beyond a cost center focus.
Integrated value of the tribe – Native American tribes had a communal set of values that they incorporated into everything they did and were as natural as breathing.
Be migratory – You have to go where the buffalo are. One example is Comcast’s Comcast Cares unit that is a triage swat rapid response team that quick addresses customer issues.
Gathering of tribes – Everyone must depend more on collaboration when times are tough and may even mean collaborating with possible ‘enemies’ to share ideas and grow the market together.
Adaptation - People need to adapt when in tough times or when technology changes how they think. Thor used the example of Twitter and how writing 140 character messages now seems very natural to those who have used Twitter for a month or more.
Reverence - Metrics are important, but we sometimes strip out the reverence with a total devotion to the numbers. Being reverent is doing things that don’t need to necessarily translate to transactions or sales, but doing the right thing and it’s the only thing that can sustain a community in the long term.
Nova Spivak then shared his experiences of building the Twine community which now has over 1 million members with just 24 people in his entire company and only 2 devoted to supporting the community. As a venture-funded started, the key is to conserve cash, keep the team together using salary cuts instead of layoffs and using viral marketing instead of paid campaigns. He also mentioned that there should be more opportunities for community sites in a down market especially for communities that energize people around the economic crisis. In downtimes, people also need more support and have more ‘free’ time to network on community sites. In addition, many companies are looking for ways to collaborate in less expensive ways than face-to-face meetings.
I’ve been hearing from multiple sources in a variety of folks that Mzinga is undergoing some changes. With the recent layoffs a few months ago, to apparently voluntary leave of the CMO this week, there are a lot of questions I have to ask.
I strongly recommend that any Mzinga clients or prospects stall any additional movement till they brief me next Monday.
First, I believe that such statements in a blog are incredibly unprofessional and border on negligent corporate behavior – especially when the post was written based on unsubstantiated rumors. Second, the call to “stall any movement” until Jeremiah gets briefed next week is pretentious in that only Jeremiah can get to the bottom of this issue’?
Jeremiah is a respected analyst working for a respected firm, and has worked hard at covering and growing the social media and community space. Jeremiah did issue an apology on his blog todayand I heard that Forrester also sent Mzinga an apology as well. Plus, there have been more than 60 responses to his original blog post and nearly 30 to his apology post today. I’m sure that Jeremiah feels contrite in the same way that Alex Rodriguez, Bernard Madoff and Bill Clinton have felt in the past when they issued their own public apologies. But that doesn’t undo any damages that Mzinga has incurred from negative mentions in the posts and on Twitter.
Because Jeremiah is such a proponent of social media, I think we turn his predicament over to the general public and use crowdsourcing to determine his fate.
Take a moment to express your opinion below in this quick poll:
Several other bloggers have piled on to this issue including:
My disclosure – I have worked with Mzinga since December 2006 on two different community efforts and I believe that Forrester should fire his a** for this flagrant offense in order to protect their own brand and image.
While it seems like everyone else is attending SXSW in Austin this week, I am going to be attending the Forum One Online Community Business Forum in lovely Sonoma, California on Thursday and Friday. There are eight great sessions planned over two days including:
Community strategy – thriving in a challenging economy
Managing your online community ecosystem
Measuring and improving community performance
Embracing community and social media
The business of online community
Gleaning insight from your community ecosystem
I’ll be taking good notes so I can blog about what resonates at the event for me. Stay tuned for updates later this week.
Are you Twittering yet? If you are and you’re competitive like most people, then you’ll probably want to find out how you stack up against others.
Internet Marketing Company Hubspot offers a great (and free) tool called Twitter Grader which lets you grade yourself and others. You simply type in your Twitter username or the name of someone else and in a few seconds, you get back a report that assigns a score based on some secret algorithm that must look at the number of Tweets, frequency of Tweets, number of people following you and number of followers.
My Twitter Grade is 99 out of 100 which puts me in the top 17,001 of all people who Twitter. In Manhattan Beach where I live, I am actually #3 on the list of Twitter “elite”.
Twitter Grader - Tom Humbarger
There is also a new feature which lists the top 50 “Twittering” cities and the Twitter elite in each city. This is a great way to get connected with the key people who use Twitter and a way to build the number of people you follow in your field or in your community. You can also search for other locations and locate people where you live. Another nice feature is the list of suggested people to follow and the ability to view a user’s history of followers and followees over the last 6 months.
Twitter Grader - Top Users in Manhattan Beach
The interface is very clean and easy to use. Check it out and see how you stack up! You should also check out the HubSpot marketing blog as it has many great tips on the use of internet marketing.
McKinsey Quarterly recently published the results of their research into more than 50 early adopters of Web 2.0 technologies. The authors made a very important point about the difference between Web 2.0 tools vs. the ERP and CRM tools that came into vogue in the 1990′s. Web 2.0 tools are interactive and require a high degree of participation from users to be effective. In ERP and CRM, users use the tools to process information or execute transactions while in Web 2.0, users use the tools to generate new information (blogs, discussion, Twitter, information tagging) or to edit the work of others (wikis).
I have rolled out Sharepoint-based internal communities twice, successfully launched the Catalyze professional community growing it from 0 to over 4000 members in 18 months and am working on launching a new professional community. In addition, I have been actively blogging for more than 2 years and Twittering for more than a year. With this work, I have been at the forefront of the Web 2.0 popularity growth and have some opinions as well.
Here are McKinsey’s six critical Management imperatives for unlocking participation:
Transformation to a bottom-up culture needs help from the top – Inthe rollouts for the two Sharepoint internal communities I helped launch, this observation sticks out prominently. For the small services company I consult with, their Sharepoint rollout has been superbly successful because it was essentially mandated from the top-down. In the other rollout, management did not want to force anyone into Sharepoint and were not active partipants in the project. And the results were disappointingly dismal.
The best uses come from users – but they require help to scale - McKinsey’s research points out that the Web 2.0 applications that drive the most value often arn’t those that management expects.
What’s in the workflow is what gets used – Again, in the Sharepoint rollout for the services company, management requires that branch offices submit worksheets with weekly staffing and volumes throught the Sharepoint system. Since it is part of the workflow, managers are using the system.
Appeal to the participants’ egos and needs – not just their wallets- The article includes many good examples of what works and what doesn’t work in terms of generating enthusiasm for contributing to Web 2.0 efforts.
The right solution comes from the right participants – For the Catalyze community, getting the right scale was important as community participation is a numbers-driven game. I worked hard to keep a balance of usability professionals and business analysts, and was not totally comfortable until we passed the 1500 member mark. Most communities, whether internal or external, generally follow the 90/9/1 rule where 90% of members are passively engaged, 9% are actively engaged and 1% are actively engaged and contributing content.
Balance the top-down and self-management of risk – The important point here is that companies need to make reasonable policies regarding participation and what can be discussed, and routinely audit participation against those policies.
