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There Is No ROI On Understanding
There Is No ROI On Understanding
There Is No ROI On Understanding
There Is No ROI On Understanding
There Is No ROI On Understanding
There Is No ROI On Understanding
There Is No ROI On Understanding
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There Is No ROI On Understanding

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Community Engagement. Innovation Management. Voice of the Customer. Crowdsourcing. Whatever you want to call it, communities are forming around companies, ideas, projects, start- ups, nonprofits, and …

Community Engagement. Innovation Management. Voice of the Customer. Crowdsourcing. Whatever you want to call it, communities are forming around companies, ideas, projects, start- ups, nonprofits, and people. These dialogues are happening organically and they’re happening online, which means that the transparency associated with these conversations presents a large variety of challenges and opportunities.

Download this white paper to learn the importance of defining what success looks like when it comes to tracking:

Impact
Reach
Engagement
Satisfaction
Costs of Implementation

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  • 1. There Is No ROI on Understanding: Crowdsourcing Best Practices 5 Behaviors to Develop and Consider Community Engagement. Innovation Management. Voice of the Customer. Crowdsourcing. Whatever you want to call it, communities are forming around companies, ideas, projects, startups, nonprofits, and people. These dialogues are happening organically and they’re happening online, which means that the transparency associated with these conversations presents a large variety of challenges and opportunities. The title of this piece is “There is No ROI on Understanding.” Which is not to say that community managers and innovation experts shouldn’t try and understand their network, they should. It’s just that for any of these investments to truly pay off, one must respond to those insights. One must take action... before they begin to see innovation all the way through the idea lifecycle. Industry leaders are finding ways to involve themselves in these discussions and learn from them. Coca-Cola used co-creation to generate a series of ads from their customers and enthusiasts. Companies like Avid ProTools are improving their product based off of feature requests in their customer lab. The new app called Waze uses information from the crowd to generate real-time traffic reports and information. These are, of course, in addition to whole host of other businesses large and small that are implementing programs that invite discussion, ideas, and innovation. Every conversation and community is different, however, and knowing where to begin is oftentimes a daunting process. There are a few important metrics to define early on, however, and they are: • • • • • Impact Reach Engagement Satisfaction Costs of Implementation Impact In Romi Mahajan’s book Cool is For Fools, he introduced a character (and problem) that most people are familiar with: We all have that friend, peer, boss, employee, associate – you know, the guy who always knows how everyone should do everything, how to run every company and every country, the space program, and so on. He’s worse than an armchair quarterback, and even as a Monday morning quarterback, he often loses the game […] Okay, fine, you get it. Arrogant pricks, right?
  • 2. Before You Begin | Page 2 Yeah, well, sure. But here’s the deal: How do we find the one out of 1,000 ideas that is really revolutionary unless we go through the torture of listening to the other 999?1 The most successful communities are places where great ideas and half-baked ideas germinate happily together and not every great idea arrives on schedule. So how do businesses identify the right ideas? How do they find the great ideas and separate them from the good ones? The most successful companies that implement these programs are those that define their goals early on. Some even organize challenges or campaigns based on those needs, but even those who leave the conversation open need to know what they are looking for. What are the goals? Example Crowdsourcing Community Goals: • • • • • • • “How do we find the one out of 1,000 ideas that is really revolutionary unless we go through the torture of listening to the other 999?” Cost Savings Revenue Increase Improving Company Offering Create Relevant Marketing Content Reduce Environmental Impact Improve Regulation Adherence *Note: none of these goals is simply “customer/employee/ stakeholder understanding.” All of these goals demonstrate a response to improved audience understanding. Every business is different. Every community presents a new field of opportunities. Defining goals early on will help in the assessment process later. One IdeaScale customer launched a feedback community with the express goal of saving the company 1% in total revenue specifically from employee generated ideas in their first year of open innovation. They even added a field for employees to estimate the potential cost savings. Because this aim was clearly laid out and the community that was collaborating could align their efforts to those goals, the company was able to meet this goal within three months of implementing the program. IdeaScale will also offer an assessment tool that makes it possible for clients to input their goal bottom-lines and evaluate ideas against those goals based on projection. 1 Mahajan, Romi. Cool Is For Fools: The Poetry of Marketing. Ascentium Corporation, 2011, p. 86.
  • 3. Before You Begin | Page 3 Reach When curating and considering a community, it is important to think of the invisible audience. “a Facebook analysis of top 100 brand pages reveals that for every fan there are an additional 34 friends of fans that can be reached. This multiplier was found to grow even larger when one looked beyond the top 100 brands.”2 This means that when asking a question, setting a challenge, seeking feedback by casting for it out into the lake of ideas, that it’s not just about the voices that you’re hearing, you’re still in conversation with and making an impression on those that are watching and not participating. It’s like going to a party and telling a story in a large group of ten people. Maybe only two other people dominate the discussion, but everyone goes home and talks about what the party was like. It also means that every person is potentially 34 more people that could have a solution. Bring in a large community. It’s larger than you know. The government issues 8,000 regulations every year and independent government agencies like the FCC operate under the mandate to involve public opinion in any rulemaking (so that the government operates democratically and to improve law adoption when the time comes). When the FCC used the IdeaScale “When members tool to get feedback on the National Broadband plan, there were are rewarded for over 60,000 responses from the public, (the highest number of Public Notices ever published). As of the writing of this paper, the plan was the impact or 88% implemented, a nearly record-breaking pace of adoption for any discussion or national plan, perhaps helped along by the voices of both active and collaboration passive members that participated in the dialogue. that their work generates, idea quality improves by over 40%.” Finally, reach isn’t just about reaching everyone. It’s about reaching an audience that’s relevant to you. If you reach out to your target audience (say: female entrepreneurs between the ages of 25 -50), it is more likely that their networks will include similar audience members rather just putting out a blanket call for engagement to anyone. Engagement Innovation programs and engagement initiatives are communities. There should be an opportunity for not just idea suggestions and feedback, but dialogue between members. This means, that you’re not just looking for a community that speaks to you, but speaks to each other. Many community engagement programs offer incentives to contributors, but Professor Olivier Toubia found that the best way to not only improve engagement, but also the quality of the idea, 2 Swati. "To Expand Your Brand’s Reach on Facebook, Focus on the Friends of Fans." Web log post. BuzzOm. 28 July 2011. Web. 01 Feb. 2012. http://www.buzzom.com/2011/07/to-expand-your-brands-reach-on-facebook-focus-onthe-friends-of-fans/
  • 4. Before You Begin | Page 4 was to offer rewards to members who generated the most participation with their ideas. He called this model the impact model. When members are rewarded for the impact or discussion or collaboration that their work generates, idea quality improves by over 40%.3 IdeaScale is a system designed around community and dialogue (with the most relevant conversation boiling to the top of the most relevant ideas), but members are also rewarded for their participation in the IdeaScale gamified badge system. There’s even a badge that is automatically awarded to the member whose idea generates the most activity. Satisfaction One of the side benefits of engaging a group of stakeholders (beyond new ideas and fresh insights) is that the more a group feels heard, the more likely they are to feel good about the organization that’s doing the listening. For example, only one of five employees feel engaged on the job. And, according to Gallup research, engaged employees recommend their company’s products and services 78% of the time. 4 The same goes for customers or other public communities, the more involved they feel in the process, the more likely they are to feel loyal to the brand and glad to recommend it. Which means they have to believe that they are truly interacting with the company that they’re trying to serve. “Engaged employees recommend their companies products and services 78% of the time.” In an engagement scenario, people are more likely to feel heard and incorporated when there is good moderation. As the moderator promotes ideas, rewards ideas, reviews ideas, and completes ideas, all of these actions should be celebrated and shared not just for the sake of transparency, but to show the efficacy of participation. When creating a community, one cannot underestimate the value of a good moderator: reward them for actively curating a community. 3 Toubia, Olivier. "Idea Generation, Creativity, and Incentives." Marketing Science 25, no. 5 (2006): 411-25. 4 Lauper, Elizabeth. “Social Knows: Employee Engagement Statistics.” Social Workplace. 8 August 2011. http:// www.thesocialworkplace.com/2011/08/08/social-knows-employee-engagement-statistics-august-2011-edition/
  • 5. Before You Begin | Page 5 One researcher concluded that using the IdeaScale tool to collect public feedback nearly doubled customer service satisfaction.5 Satisfied customers mean more recommendation and the growth of a business, even as you learn and grow from those customer insights. Make sure that your moderators are making your community members feel heard. Costs of Implementation It’s easy to get excited about a great idea. But it’s not always easy to deliver on a great idea. One of the most popular examples of crowdsourcing innovation is the Netflix prize in which Netflix asked the community at large to generate an algorithm that would improve the Netflix recommendation engine’s accuracy by 10% in exchange for a $1 Million purse. A few years later, a team met that goal and happily walked away with their check for $1 Million and a sense of a job well done. But the story doesn’t end there, because it turns out that Netflix never implemented the final solution for a number of reasons, stating: “we evaluated some of the new methods offline but the 5 Newell, Angela. “Open Government is Dead, Long Live Open Data.” GovLoop. 30 June 2011. http:// www.govloop.com/profiles/blogs/open-government-is-dead-long
  • 6. Before You Begin | Page 6 additional accuracy gains that we measured did not seem to justify the engineering effort needed to bring them into a production environment.”6 The market changed for Netflix and so did their priorities and goals and even though the algorithm they purchased was great, they couldn’t make the commitment to implement it in the long run. It is important when selecting and assessing ideas to consider your bottom lines, to understand what it will take to meet the practical applications of innovation and see them though. Conversely, one IdeaScale client turned to its restaurant employees in hopes of identifying possible cost-savings solutions. Ideas were rewarded based off of their ability to help meet this goal. One employee made a simple suggestion of replacing ketchup bottles with 2 oz. ramekins filled with ketchup instead. The idea was able to save the company $200,000/year. A value that was easy to achieve, because the tools for success were already available to them. You know your business best. You know what you can afford and what innovations are worth the cost of investment. IdeaScale and Innovation Businesses that use an online tool capable of not just prioritizing ideas and inspiration, but also generating a community around those ideas are the ones that are leading their industry. They are considering engagement, their brand reach, what the costs of innovation are and what the gains of innovation are. IdeaScale has been providing a flexible platform for numerous businesses since 2008. From the beginning the guiding principles have been those of engagement and collaboration. It’s not just a list of ideas, it’s a community around those ideas. And remember this is simple stuff – you could encourage these behaviors with any tool with or without gamification (which IdeaScale offers as part of its system) – you can award people with a lunch date or a candy bar or a Pontiac. The point is these are behaviors that should be encouraged so that you’re building a community together. 6 Amatriain, Xavier. “Netflix Recommendations: Beyond the 5 stars.” The Netflix Tech Blog, 6 April 2012. http:// techblog.netflix.com/2012/04/netflix-recommendations-beyond-5-stars.html

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