Thanks, Kevin, for that introduction. As Kevin mentioned, this is the second webinar and white paper in our thought leadership series on World Class Communities. In the first paper, The Characteristics of Community Excellence, Rob Howard and I identified the nine characteristics of world class communities, those that will set the standard for how well-done online, company owned communities will evolve.
One of the key findings coming out of that paper was the difference between social networks and company-owned online communities. While social networks have a primary purpose of building and maintaining relationships enabled through common activities, online communities have business objectives, enabled by relationships, as their primary objective.With a desire to achieve business objectives, companies are rightly asking the related questions about the value creation potential of communities: What types of returns can be expected? How long will it take before the returns can be seen? Are the expected returns sustainable? Unfortunately, the answer to these questions is not as clear cut as everyone would like them to be because they really rely on a number of factors.Let me explain why.
Corporate objectives are usually related to things that increase shareholder value and create long-term competitive advantage. When companies establish corporate objectives, they usually revolve around increasing shareholder value and creating competitive advantage. Some of the corporate objectives we have seen associated with communities are:(click)Establishing or solidifying market leadership by becoming THE place people come when looking for information about a product category or industry informationCreating a structural shift in the company’s ability to grow its business through the expansion or establishment of a partner channel Adjusting the company’s underlying value proposition by being able to be more responsive and faster to market than the competitionCommunities associated with corporate objectives such as these have the potential to create a tremendous amount of value.
These objectives usually have business goals that can be designed into a community. Business goals eventually all boil down to efficiently selling more products. Some of these goals are: (click)Become the place to come to so that people will trust us.Retaining more of the partners that we train and invest inBe more responsive to the market and launching better products more quicklyEach one of these business goals can be quantified and some portion of the value of achieving it can be attributed back to the community.
Each one of these business goals can be quantified and some portion of the value of achieving it can be attributed back to the community.Increased trust should translate into higher sales and lower cost to acquire a customerAn effective partner channel greatly expands the sales capacity of a company and helps avoid the cost of building up a huge direct sales forceGetter better products out to market faster not only increases sales, but it reduces the cost of returns, makes customers happier, which improves the company’s reputation, and can again, lead to higher sales
[Kevin]Thanks for helping understand the framework for calculating the return on investment of communities and when the appropriate time is to being measurement. It is a big topic of discussion these days and everyone really wants a quick answer. I think you rightly point out that there is no one answer for everyone and that value will vary greatly in range depending upon the business objectives.That leads us into the next section of this topic. Your 7 Keys for building a strategy. Please take us through those now.
The first component, building on the last part of the discussion, is to weave community objectives into the fabric of your company.Not only is it important to have business objectives for the community, it is critical that these objectives are established at a strategic level within the organization. The more aligned your community’s business objectives are to the company's overall objectives and value proposition, the greater potential for benefit and return. John Conoley, CEO of Psion, a global designer and manufacturer of rugged mobile handheld computers for commercial and industrial applications, used online community as the vehicle through which his vision for the company would be realized. Psion’s business strategy, called Open Source Mobility, is comprised of three components: modularity, community and customization. An open, collaborative online community became part of Psion’s corporate strategy because Conoley started developing his approach by first identifying the areas of the business where change was essential. The below chart summarizes his assessment of the company two years prior to establishing the community. (Insert Psion Graphic Here)Psion’s community, IngenuityWorking.com, is a central component of Conoley’s vision for where he would like to steer the company. “It [IngenuityWorking.com] addresses a huge raft of internal opportunities and issues as well as market based ones. The key thing it leaves us with is the ability to have a strong, clear, consistent, trusted message with our partners,” Conoley says. To identify powerful business objectives for community, focus on these key questions:How can online community support your company’s differentiators? What are the top strategic objectives of the senior leadership in your company?What are your company’s core values?Answers to these questions can lead to business objectives that are substantive for internal, employee-facing communities and external, public-facing communities alike. Examples of business objectives for internal communities include: attracting and retaining new employees; capturing and utilizing tacit knowledge; breaking down departmental silos and increasing collaboration; creating an empowered workforce; increasing innovation or creating a more customer-centric culture. Externally, communities can be used in a number of ways to create competitive advantages and even shape industries. In addition to the aforementioned examples from Psion, other objectives for external communities include: leveraging the expertise of the workforce to gain credibility in the marketplace; becoming the definitive place to come to for information; improving responsiveness to the needs of the market; and establishing strong ties with customers.
An open, collaborative online community became part of Psion’s corporate strategy because Conoley started developing his approach by first identifying the areas of the business where change was essential. He was focused on things such as:Strengthening his brandReclaiming innovationManaging culture change across a geographically dispersed workforceEvolving his partner channel to become the primary delivery vehiclePsion’s community, IngenuityWorking.com, is a central component of Conoley’s vision for where he would like to steer the company. “It [IngenuityWorking.com] addresses a huge raft of internal opportunities and issues as well as market based ones. The key thing it leaves us with is the ability to have a strong, clear, consistent, trusted message with our partners,” Conoley says. To identify powerful business objectives for community, focus on these key questions:How can online community support your company’s differentiators? What are the top strategic objectives of the senior leadership in your company?What are your company’s core values?Answers to these questions can lead to business objectives that are substantive for internal, employee-facing communities and external, public-facing communities alike. Examples of business objectives for internal communities include: attracting and retaining new employees; capturing and utilizing tacit knowledge; breaking down departmental silos and increasing collaboration; creating an empowered workforce; increasing innovation or creating a more customer-centric culture. Externally, communities can be used in a number of ways to create competitive advantages and even shape industries. In addition to the aforementioned examples from Psion, other objectives for external communities include: leveraging the expertise of the workforce to gain credibility in the marketplace; becoming the definitive place to come to for information; improving responsiveness to the needs of the market; and establishing strong ties with customers.This component done well will ensure that community becomes a part of how your company does business versus a tangential project.
…outcomes does the firm need to achieve? (e.g., increased revenue, improved customer retention, shorter time-to-market, reduced costs, faster support and reduced turnover)Taste of Home, the world’s leading food media brand that is part of the Reader’s Digest Food Affinity, desired to increase offline subscriptions to its magazines. After launching the Taste of Home community, the brand experienced a 150 percent increase in web traffic in the first year and 150,000 community forum posts within the first two months; it was successful in achieving the desired outcome of driving customers to renew their print subscriptions.
…feedback does the company need to solicit? (e.g., Increased customer satisfaction, improved employee perceptions of efficiency and effectiveness, and greater responsiveness from analysts) Kaseya, the leading global provider of automated IT Systems Management Software, uses its Kaseya Connections community to uncover valuable product and market insight. The company is able to identify bugs, develop hot fixes and create new product features based on community interaction and feedback. Through community polls, Kaseya is able to gauge customer feedback for rapid product development and innovation. To illustrate, Kaseya recently polled its customers following the release of a product and received an overwhelming response within two days.
Fiskars, the global manufacturer of scissors (and other cutting tools), is an oft discussed example of a company focusing on the passion of their customers in the design of their community. Yes, there is some discussion about the right scissors to use for a specific task and there are conversations about how to sharpen your sewing scissors after someone has thoughtlessly used them to cut pipe cleaners for a crafting project. However, the real value comes from enabling people to share their love of crafting with like-minded individuals.By focusing on a shared interest about which its members have passion, Fiskars was able to grow what is considered one of the most effective “fan communities” in practice. It is reported to have significantly reduced Fiskars’ advertising expenses, increased the chatter around their brand by 600% (versus 10% goal), generated 13 new product ideas per month, and increased sales 300% (versus 10% goal).
According to McMillan and Chivas in their seminal work Sense of Community: A Definition and Theory, people’s sense of community is determined by four elements.Membership: A feeling of belonging or a shared sense of personal relatednessInfluence: A sense of mattering and of making a difference to the group and its membersIntegration and fulfillment of needs: A sense that their needs will be met through the groupShared emotional connection: A commitment and belief that members have and will continue to have shared experiencesThis study supports our contention that relationships are a critical enabler in a community for meeting business objectives. Once members achieve an emotional connection, they become fierce supporters and defenders of the community, kind of like fenatical sports enthusiasts. They become passionate evangelists for the company’s brand who others are willing to listen to and follow. Companies that design communities to allow members to affect content, exert influence, and meet the full breadth of their needs (even those not anticipated) will have stronger, more sustainable communities that are better able to fulfill the company’s objectives.
The first wave are your ambassadors that you get on board before you finish designing your community.A diverse group of five to 10 people in the target market who should be asked to provide feedback and early content for the community. Depending upon their makeup, the customer advisory groups leveraged by many organizations can prove excellent candidates for participants in the first wave. Their participation should be solicited early and their feedback sought as the site is being designed. They should be asked, via a personal contact, to:Participate in a webinar that explains the community, the company’s objectives, and the proposed benefits to membersProvide feedback on the site approach as it is being designedGain early (within one to two weeks) access to the site prior to pilot launchComplete profiles, submit questions, and engage with other community members during the pre-launch phase and during the pilotRespond to brief surveys and polls administered throughout the pilot(click)Wave 2 are your The Champions – your pilot participants. Launching a pilot community with 150-200 participants for large communities and 20-50 participants for small communities, can build a consensus of champions. Champions should be asked to participate in a manner similar to Ambassadors throughout the pilot:Participate in a webinar that explains the community, the company’s objectives, and the proposed benefits to membersComplete profiles, submit questions, and engage with other community members as modeled by AmbassadorsRespond to brief surveys and polls (click)Wave 3 are Members at Large: By the time this third wave is recruited, the community will have already established the beginnings of a culture, representative content created by members, and clear examples of how engagement can and should take place. At this point, new members should find it easier to become acclimated and engaged by following the lead of Ambassadors and Champions.All three of these waves take place during the early on-boarding stage in the life cycle of a community. The third wave is much longer than the first two and is the stage in which most of the work is done to move the community into the established phase.
Driving adoptionAfter the initial push to launch the community is complete, the focus must shift to a continuous effort to drive adoption. This encompasses three elements: driving traffic to the siteencouraging engagementenabling members to become evangelists for the community.In the early stages, most of this work will need to be performed by the company that owns the community. Traditional marketing campaigns, social media campaigns, and SEO-related efforts should be leveraged to drive traffic to the site. Although it is tempting to concentrate all online activity on the company’s community, the community manager’s participation in social networks and engagement in other relevant communities or websites is vital. Remember that prior to you launching your community, the social ecosystem (see World Class Communities: The Characteristics of Community Excellence1) was already abuzz with people who have been engaging around topics of interest to your organization. Participating in these online places where engagement is already taking place is one of the most efficient means of building both reputation and interest in your community and the value it can bring. The company will need to provide a constant stream of new and relevant content, and it is the responsibility of the community manager to encourage engagement. Early evangelism should be happening through Ambassadors and Champions, but the company also needs to participate as well as encourage and reward sharing among community members.With focused attention on managing this cycle, momentum will build and the community will naturally take over much of the work required to keep adoption high. Community-generated content will drive improvements in SEO. Relevant content and active members will drive engagement and the creation of more content. Engaged members will want to share from the community what they believe is of value in both their offline and online social networks and that evangelism will in turn create more traffic.
Cadbury has fully embraced the value of linking all three components of the adoption cycle together (driving traffic engaging members, and encouraging evangelism). In August 2010, Cadbury launched its biggest ever marketing initiative – to get millions of people across the United Kingdom and Ireland playing games. In celebration of its role as “Official Treat Provider” of the London 2012 Olympic and Paralympic Games, Cadbury created “Spots v Stripes.” Spots v Stripes invites everyone in the United Kingdom and Ireland to divide into two teams and play any type of game in order to score points towards an overall, national team total.To meet such high levels of participation, Cadbury embarked on its largest and most integrated marketing campaign ever. The campaign website acts as a central hub for all Spots v Stripes activity, allowing people to choose a team, sign up, claim points and keep track of scores. The communal space for both teams reflects other activity that is taking place elsewhere online and in the real world, with opportunities for Spots v Stripes players to upload their own content to the site.And, I’m sure lots more candy has been eaten.
The successful execution of an online community is a team effort. Many people within the company will be involved in some way, whether by providing content, answering questions, or managing the technical requirements. The number of people involved will vary based upon the structure and objectives of the community and the unique elements of each company. However, there are four team positions that should be filled, regardless of the type of community. Multiple people can be assigned in each position and an individual can hold more than one position. Of primary importance, companies should have a name(s) assigned to each of the following roles.Owner– Develops the strategy, cares about and is measured on the success of the community. Sponsor– Senior executive committed to leveraging community to execute corporate strategyChampion– Influential person who evangelizes the community within the organization. The level of effort required to establish an effective community often requires a culture change. For example, companies with communication policies that limit public statements to a select group of executives and people within the marketing department may meet initial resistance. Sharing information broadly, with both internal and external constituents, may be a foreign concept; however, broad engagement and transparency are keys to success.
Psion CEO Jon Conoley, clearly serves as one of the champions for IngenuityWorking.com. During the formative stage of the community, he made a public post of an email2 that was sent to all Psion employees regarding their participation.“The one upgrade the company can’t do is to create cojones for those people in the company who could or should contribute but don’t. It’ll be harder to understand that attitude once we move beyond ‘beta’. And for sales guys, you will more actively have to get your customers and partners pointed at the Community. The more people, the more it will work, especially when more of those people are external to us.“Remember: this Community is vital in changing our relationship with the market and to us being seen as different to everyone else. I expect it to be a bedrock of ‘easy to do business with’, and a vital enabler of our ‘open’ stance. If we do this right, we are then the most relevant manufacturer to the needs of customers and partners.”
The fourth position that must be filled is that of Community ManagerCommunity Manager – The lead social capital builder, evangelist, responder, master listener, rule enforcer, and spam controller. This role will vary greatly depending upon the type of community and will evolve over time as the community matures. Initially, their role is to establish the culture of the community through participation, welcoming new members, connecting members to the appropriate resources, and recommending/implementing changes to the community based on member feedback and engagement. Over time, the community manager’s focus shifts significantly to engaging and enabling influencers in the community and serving as the champion of the community member within the company.The Fiskars community managers make their presence felt to everyone who is interesting in becoming a “Fiskateer.” The home page of the community for non-members highlights the four community managers. In order to join, prospects contact one of the community managers to express their interest. In turn, the community managers send a questionnaire back to get an understanding of the specific interest. Only after the questionnaire is complete is one invited to join the community. This enables the community managers to be much more specific about their level of engagement with each community member. This very aggressive style of community management has resulted in a passionate community of crafters who all act as ambassadors for the Fiskars brand.While not all communities need or will choose such aggressive community management, all communities definitely need a manager to support the members on a regular basis.
Those are the 7 components to community strategy. In summary, let me say that:Creating an effective community strategy does not have to present an arduous task. In fact, if the vision for and the objectives of the community are in alignment with the organization’s overall priorities, the strategy process can be completed in days instead of months and lead to uncapped value.Be quick – Since the community strategy should be linked to overall corporate objectives, there is no need to engage in a laborious, drawn-out strategic planning effort. A concentrated effort by all the necessary parties can result in an effective plan in weeks versus months. In fact, it can be disadvantageous to lay out all of the details of the community in advance since it can make it difficult for members to feel as though they had influenced the shape of the community.Pilot first – This is one of the best ways to allow the community to appropriate shape your community and ready your company for what it takes to effectively manage a community.Build before measure – It is important to go through the phase of building the community before saddling it with the burden of proving an ROI. It’s not until they reach scale and are operating as intended that they can realize their full potential. Consider things enabled – When it is time to start calculating the ROI, be sure to include not only the direct value of the community, but all of the things that were enabled by it as well. Iterate – As the community matures, the business evolves, and the market changes, opportunities for value creation will change. A periodic review, no less frequently than quarterly, of the community strategy to check for continued alignment with corporate goals, enablement of business objectives, fulfillment of community member needs, and responsiveness to market demands will ensure that the community remains on target.With that, I will turn things back over to Kevin.
Strategies for World Class Communities
Today’s Webinar:<br />Strategies for Building World Class Communities<br />Webinar starts at 9:30AM CST<br />Audio Dial-in:<br />Call-in toll-free number (US/Canada): 1-866-469-3239<br />List of global call-in numbers: http://bit.ly/globalcallin <br />Access code: 803 849 204<br />Download the White Paper<br />(COMING SOON)<br />Learn More About Telligent<br />www.telligent.com | email@example.com | #telligent<br />#WCCTelligent<br />
Strategies for Building World Class Communities<br />Presented by Cecilia Edwards, SVP Client Services<br />
Purpose of Community is to Fulfill Business Objective<br />Online Communities<br />Business Objective<br />Primary Purpose<br />Primary Enabler<br />Relationships<br />Copyright Telligent 2011<br />
Community Value<br />Return on Investment<br />Direct Value<br />ROI<br />VALUE OF BUSINESS OBJECTIVES<br />Value Enabled<br />Return α Value of Achieving the Business Objective<br />
Corporate Objectives<br />The place people come to<br />Business Goals<br />Expand/increase effectiveness of partner channel<br />Total Value of<br />Achieving Goals<br />Be more responsive and faster to market<br />% Attributable to Community Enablement<br />Link to a Corporate Objective<br />
Corporate Objectives<br />Business Goals<br />Increased trust<br />Retain partners<br />Total Value of<br />Achieving Goals<br />Launch better product quickly<br />% Attributable to Community Enablement<br />Corporate Objectives Have Business Goals<br />
Corporate Objectives<br />Business Goals<br />Higher sales<br />Lower costs<br />Total Value of<br />Achieving Goals<br />Fewer returns<br />% Attributable to Community Enablement<br />Business Goals Have Value<br />
Approach to Calculating ROI<br />Corporate Objectives<br />Increase shareholder value<br />Create competitive advantage<br />Business Goals<br />Sell more <br />Retain more<br />Total Value of<br />Achieving Goals<br />Revenue increases<br />Cost savings<br />% Attributable to Community Enablement<br />Direct contribution<br />Value enabled<br />Net Value Attributable to Community<br />ROI =<br />Cost of Community<br />
Build Community Before Calculating ROI<br />Manage the Community<br /><ul><li>Measure progress against business goals
Calculate ROI</li></ul>Build the Community<br /><ul><li>Drive adoption
Encourage engagement</li></ul>Plan and Design the Community<br /><ul><li>Link to corporate objectives
Design to meet business goals</li></li></ul><li>World Class Checklist<br />7 Components of Community Strategy Building<br />1. Weave Objectives into Company Fabric<br />2. Develop Picture of Success Early<br />3. Plan the Users’ Second Visit<br />4. Design for Member-Ownership<br />5. Execute in Waves<br />6. Drive Adoption<br />7. Fill All the Positions on the Team<br />
Weave Objectives Into Fabric<br />1. Weave Community Objectives Into Company Fabric<br />