The Business Case
for Online Communities
for Online Communities
Don Tapscott – Author, Wikinomics
Barry Libert – Author, We Are Smarter Than Me
b h h
Aaron Strout, VP New Media, Mzinga

What You’ll Get Out of Today’s Session
The Benefits of Community
Featured Case Studies
Featured Case Studies`
Market Pricing for Communities
Demonstrated ROI
D t t d ROI
How to Get Started: 5 Simple Steps
Q&A with the Experts, Don and Barry
Reference Materials

Types of Online Communities
Marketing Effectiveness
• Lead Generation
Customer Communities
Customer Communities • New Customer Acquisition
New Customer Acquisition
• Customer Adoption & Loyalty
• Prospects
• Customers • Product & Service Innovation
• Partners
• Customer Service & Support
• Market Research
Market Research
Employee
Communities
Employee Effectiveness • Employees
• Alumni
• Recruiting & Retention • Shareholders
• Communications
• Training & Development
• Employee Performance & Growth
• Innovation
• Intellectual Property
3

The Power of Customer Communities
Extend Brand Visibility
Market
Market • Establish a continual dialogue with the market
Demand
Research
Generation • Actively promote thought leadership
• Create viral “buzz” around progress & success
Product
Prod ct Customer
Customer New • Extend market reach & access to new target
g
Customer
Innovation Community
Acquisition
audiences
Increase Revenue & Drive Efficiencies
Customer Customer
Service & Adoption & • E il di di t l id tif i bl l d
Easily and immediately identify viable leads
Support Loyalty
• Streamline in‐ & out‐bound sales & marketing
communications
• Reduce marketing costs by leveraging viral
Reduce marketing costs by leveraging viral
channels
• Shorten sales cycle
4

The Power of Customer Communities
Elevate Customer Satisfaction
Market
Market • Provide an outlet for inquiries, suggestions, etc.
Demand
Research
Generation • Provide direct access to key experts / executives
within your business
New
• Leverage the speed of trust
Product
Prod ct Customer
Customer
Customer
Innovation Community
Acquisition
• Streamline customer education
Customer Customer Increase Productivity
Service & Adoption &
Support Loyalty • Create an extensible services & support model
• Centralize access to resources
• Minimize the need for one point of contact
Manage Risk
• Proactively address client issues
• Increase business agility
Increase business agility
• Obtain more immediate information re:
product/service concerns 5

The Power of Customer Communities
Speed Time to Market
Market
Market • Leverage wisdom of crowds to help drive
Demand
Research
Generation product and service enhancements
• Streamline launch & rollout processes
Customer
Customer New
Prod ct
Product
Community Customer
Innovation
Acquisition Gain Direct Access to Business Intelligence
• Reduce the cost of R&D
Customer Customer • Capture, track and analyze trends, areas of
Capture, track and analyze trends, areas of
Service & Adoption &
Support Loyalty interest, etc.
6

The Power of Employee Communities
Attract & Retain Talent
Intellectual
Intellectual
Property
Recruiting & • Create a culture of openness
l f
Retention
• Identify and reward employee contributions
• Connect people across departments & locations
Workplace
Workplace Commun‐
Comm n
Innovation Community ications
• Foster teamwork and collaboration
Improve Employee Morale & Satisfaction
Performance
Performance
& Growth
Training & • id li
Establish organization‐wide alignment
E t bli h i ti t
Development
• Create clear channels of communication
• Reduce barriers between executives & staff
• P
Proactively address change management
i l dd h
• Invite employees to participate in business
decisions
• Collect feedback & measure ongoing satisfaction
Collect feedback & measure ongoing satisfaction
7

The Power of Employee Communities
Enhance Employee Productivity
Intellectual
Intellectual • Capture and sharing best practices
Recruiting &
Property
Retention • Provide centralized access to key information,
documentation and experts
• Drive knowledge sharing
Workplace
Workplace Commun‐
Comm n
Innovation Community ications • Increase virtual team effectiveness
Performance
Performance
& Growth
Training & Drive Employee Growth & Performance
Di E l G th & P f
Development
• Facilitate formal and social learning
• Establish mechanisms for mentoring
• Easily identify budding talent & SMEs
E il id if b ddi l & SME
• Locate employees with ancillary skill sets to their
job roles
• Promote opportunities for horizontal & upward
Promote opportunities for horizontal & upward
career advancement
8

The Power of Employee Communities
Foster Innovation
Intellectual
Intellectual • Leverage the wisdom of crowds to advance
Recruiting &
Property
Retention your business
• Solicit, rate, review and track suggestions, ideas
and insights on your business strategy, products
Workplace
Workplace Comm n
Commun‐
Innovation Community ications
& l ti
& solutions
Performance
Performance Reduce Risk
Training &
& Growth
Development • Capture and repurpose subject matter expertise
& key intellectual capital
• Provide a platform for retirees and alumni to
stay engaged
• Establish mechanism for alumni mentoring and
extended workforce
9

Case Study: Procter & Gamble – R&D
Situation:
• In 2000, A.G. Lafley new CEO, change to R&D
• Perception: Despite an incredible track record, innovation
Perception: Despite an incredible track record innovation
was not happening fast enough
Mission & Challenges
• Goal: By the end of the decade, 50% of all new P&G
G l B th d f th d d 50% f ll P&G
products and technologies come from outside
• Massive change resistance
Results
By 2006:
• 35% of all ideas are from outsiders
• 60% productivity increases
60%
• 80% of product launches are successful
(industry average is 30%)

Case Study: Brewtopia – New Marketing
BlowFly Beer Situation:
• Emerging company without capital
Solution
• Liam Mulhall invited 140 friends to contribute ideas for their
ideal beer
Results
• Within weeks, there were more than 10,000
participants
• The Community drove:
• Beer style (lager) & Color (pale amber)
• Alcohol content (4.5%)
• Shape of the bottle, and label colors
Shape of the bottle, and label colors
• Direct shipments; customers can define their own label
• 4 years later – 50,000 customers worldwide
• Wine, bottled water, soft drinks on the way…

Alex Tapscott’s Wikinomicists Community
Web 2.0
The
Net Generation
The Social
Revolution
The Economic
Revolution

Harnessing Mass Collaboration
3. Prosumers

Market Pricing for Online Communities
Item Description Cost
Community Setup
Community Setup • Strategy $25,000 50,000 (one
$25,000‐50,000 (one
• Design time)
• Setup
Community
C i •HHosted SaaS solution
dS S l i $15 000 25 000
$15,000 ‐25,000
Hosting & Services • Ongoing moderation (month)
• Content/Programming
• Best practices
• Business Intelligence
Total Costs
Total Costs $205,000‐350,000
$205 000 350 000
(annual)

Demonstrated ROI
Potential Annual Benefits
Business Function Description Conservative Expected Optimistic
Marketing
g • Increase revenue from existing customers $0.75M $0.94M $1.12M
• Reduce cost of lead generation by allowing
prospects to self qualify within the community
• Reduce time to “qualified lead” by getting prospects
to get learn about your products quicker
Support Reduce cost of support by allowing customers to
• Reduce cost of support by allowing customers to $.67M
$ 67M $1 1M
$1.1M $1 6M
$1.6M
help each other
• Reduce cost of documentation and help with
customer created wikis
• Reduce time to customer satisfaction by providing
access to experts quicker than traditional
access to experts quicker than traditional
“escalation policy”
Innovation • Increase revenue – customer create product $0.63M $.69M $.75M
extensions to new segments
• Reduce cost of integration – customers create
adapters for native products
d f d
• Increase testing coverage into new and
unsupported environments
$2.2M $2.96M $3.77M
Courtesy Mukund Mohan, Best Engaging Communities

How to Get Started: 5 Simple Steps
1. Pick a process
2.
2 Identify a crowd
Identify a crowd
3. Give them the required tools and support
4.
4 Accept their wisdom
A t th i i d
5. Measure their performance (and YOURS) as
community contributors
community contributors

Q&A with Barry
and Don
17

Resources
We Are Smarter Than Me (the book)
wearesmarter.org
Wikinomics (the book)
wikinomics.com
Web Strategist blog: web‐strategist.com/blog
Mzinga.com
Del.icio.us [search for “mzinga”]
Top Marketing Blogs: adage.com/power150
18

Ongoing Monthly Webinar Series
Featured Speakers
Practical Advice
Practical Advice
Case Studies
Steps for Success
St f S