2008 TRIBALIZATION OF BUSINESS STUDY HOW TO ACHIEVE TRANSFORMATIONAL CHANGE THROUGH COMMUNITIES AND SOCIAL NETWORKS

A STUDY PRODUCED BY: Deloitte ( www.deloitte.com ) Beeline Labs ( www.beelinelabs.com ) Society for New Communications Research ( www.sncr.org )

OVERVIEW: FIRST ACT: UNDERSTANDING THE DYNAMICS AT WORK WITHIN COMMUNITIES SECOND ACT: A QUICK OVERVIEW OF THE FINDINGS OF THE STUDY THIRD ACT: THE MAJOR TAKEAWAYS FROM THE STUDY

FIRST ACT: UNDERSTANDING THE DYNAMICS AT WORK WITHIN COMMUNITIES

TRIBALISM IS THE VERY FIRST SOCIAL SYSTEM THAT HUMAN BEINGS EVER LIVED IN, AND IT HAS LASTED MUCH LONGER THAN ANY OTHER KIND OF SOCIETY TO DATE. (WIKIPEDIA) WHAT’S THIS TRIBAL THING ALL ABOUT?

THE MOTIVATIONS ALLOWING THIS TO WORK… PEOPLE WANT TO CONNECT WITH PEOPLE PEOPLE WANT TO HELP AND BE HELPED PEOPLE OPERATE EITHER IN A SOCIAL FRAMEWORK OR A MARKET FRAMEWORK

THE MORE CONTENT YOU HAVE THE MORE MEMBERS YOU WILL GET. THE MORE MEMBERS YOU HAVE THE MORE CONTENT YOU WILL GET. THE BETTER YOU MATCH CONTENT AND MEMBERS TO MEMBER PROFILES THE MORE MEMBERS AND CONTENT YOU WILL GET. THE EASIER IT IS TO DO TRANSACTIONS THE MORE MEMBERS YOU WILL ATTRACT. UNDERSTANDING THE DRIVING FORCES OF COMMUNITIES THOSE PILLARS CREATE THE DYNAMICS OF INCREASING RETURNS WHICH HELP COMMUNITIES DELIVER GAME CHANGING RESULTS

SECOND ACT: A QUICK OVERVIEW OF THE FINDINGS OF THE STUDY

TOP USAGE SCENARIOS: New Product Development Customer service Idea generation Market research Developer relations Amplifying Word of Mouth Employee communications General Marketing Reputation management Product testing Public relations LONG TAIL SALES CANARY IN THE COALMINE Co-innovation

TOP BUSINESS OBJECTIVES: Generate word of mouth Bring outside ideas into the organization faster Increase customer loyalty Increase brand awareness Improve PR effectiveness Reduce market research costs Decrease customer acquisition cost Reduce customer support cost Increase new product success ratios

WHO’S IN CHARGE? MARKETING Sales Customer service Finance Public Relations Employee communications IT Product development R&D

DISCONNECT: Not in support of any goal…

MEASURING PROGRESS AND SUCCESS – QUALITATIVE Activity levels Tonality Impact on sales Impact on cost Participation rate Sustainability Software downloads engagement Amount of learning Anecdotal stories Growth Sentiment

Could lead to premature shutdown of community

THIRD ACT: THE MAJOR TAKEAWAYS FROM THE STUDY

TAKEAWAY #1: COMMUNITIES ARE ABOUT DELIVERING GAME-CHANGING RESULTS COMMUNITIES CAN INCREASE REVENUE PER CUSTOMER DRAMATICALLY – I.E., 50% COMMUNITIES WILL INCREASE PRODUCT INTRODUCTION SUCCESS RATIOS COMMUNITIES AMPLIFY EVERYTHING YOU DO – INCREASING EFFECTIVENESS AND DECREASING COSTS

TAKEAWAY #2: THE RISE OF THE CMO 2.0? COMMUNITIES SHOULD BE AN IMPORTANT PART OF THE CMO’S TOOLSET (BUT FOR MANY LARGE COMPANIES – THERE IS AN UNDER-INVESTMENT AND SCALE PROBLEM) COMMUNITIES SHOULD EVOLVE THE ROLE OF THE CMO INTO CHIEF COMMUNITY OFFICER (BUT THAT WILL REQUIRE DRASTIC CHANGES IN ATTITUDE AND APPROACH TO MARKETING) IF DONE PROPERLY, COMMUNITIES WILL TRANSFORM THE WAY MARKETING WORKS (REDUCED COSTS, IMPROVED EFFECTIVENESS, NEW OPPORTUNITIES)

TAKEAWAY #3: THE NEED FOR NEW MANAGEMENT THINKING MISMATCH BETWEEN COMMUNITY GOALS AND ASSOCIATED INVESTMENTS MAJOR GAPS BETWEEN COMMUNITY GOALS AND WHAT IS BEING MEASURED COMMUNITIES HAVE TO COMBINE WITH MAJOR TALENT INITIATIVES COMMUNITIES WILL TRANSFORM MOST BUSINESS PROCESSES

TAKEAWAY #3.5: THE WORST PRACTICES ENJOY WIDE ADOPTION THE BUILD IT AND THEY WILL COME ( AGAIN ) FALLACY THE LET’S KEEP IT SMALL SO IT DOESN’T MOVE THE NEEDLE PHENOMENON THE NOT INVENTED HERE SYNDROME

QUESTIONS? Contacts: Francois Gossieaux, Beeline Labs: [email_address] Jen McClure, Society for New Communications Research: [email_address] Ed Moran, Deloitte: [email_address]