Compelling Reasons Why Your Brand Needs a Managed Community

Powered - The Leader in Social Marketing

Powered - The Leader in Social Marketing

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

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.


4 thoughts on “Compelling Reasons Why Your Brand Needs a Managed Community

  1. Tom – awesome summary. You did a nice job making an argument of WHY communities need management (we are big proponents of that concept at Powered).

    We’ll have to get you on one of our webcasts one of these days. You have some great stories to tell!

    Aaron | @aaronstrout

  2. I got here by way of Bill Johnston. Thanks for summarizing this and pointing to the report.

    The paper seems to focus on services that heavily mix teaching consumers how to use the product more effectively with a community experience (in varying degrees of customer-to-customer interaction. Unfortunately, it doesn’t seem to tease out the two experiences when asking respondents to rate content and their likelihood to purchase or recommend. Did I miss something there?

    It seems that teaching people to be better at a skill (in this photography) using the product as an essential part of the experience (I’m guessing it’s their Sony digital camera site) and giving them one-to-one access to instructors may have as much an impact on ROI as broad participation in social media marketing or online communities.

    Don’t get me wrong, I’m not shooting down the potential for ROI stemming from participation in online communities. I’m just not sure that this report sufficiently separates out the causal reasons. It would be interesting to see the data from this report separated out between the people who took classes, but did not otherwise participate in the broader community beyond their instructors with those who did.

    Regardless, the report does underscore that communities that fulfill the needs and provide value to the participants tend to be rated with higher experience satisfaction.

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