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Dig into the dynamics of online reputation and learn about the available tools for managing it. Find out how to find, engage and empower your superfnas to drive real business outcomes with social customers.

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  1. 1. superfans: building trustand commitment throughonline reputation
  2. 2. 2share this whitepaperwe help companies unlock the passion of their customers.The Lithium Social Customer Suite allows brands to build vibrant customer communities | © 2012 Lithium Technologies, Inc. All Rights Reservedcontents1 intro3 defining health factors for online communities5 after peak Facebook6 what is online community?8 organizational ownership10 conclusionrequest a demosubscribe toSocialMattersreduce service costs withsocial supportgrow brand advocay withsocial marketingdrive sales withsocial commerceinnovate faster withsocial innovation
  3. 3. 1share this whitepaperintroCommunities thrive or fail based upon trust. Consumersmust have some degree of trust in the hosting brand to makethe community successful, but far more important is the trustthat consumers have in their peers.There are two key benefits to peer-to-peer trust, eachone required for a brand community to achieve itsbusiness objectives:If consumers trust that their peers know what they are talkingabout, they are more likely to follow their advice, whether that’sadvice about which product to purchase or how to fix a problemwith a product they’ve encountered. The most prolific userstypically create 90% of the content in a brand community, so itis vital that visitors know who among them is trustworthy.If new community members see that the community rewardsengagement with higher levels of status and privilege, theyare more likely to invest their time and effort in making thecommunity successful. In other words, the community issomething like a video game—the drive to move up to the nextlevel compels members to higher levels of participation.Even a customer community with a million members dependsupon a fairly small number of people, typically around 1%, togenerate much of the excitement and interest. Without thepeer trust created by a reputation management system, this1%—the superfans—will not engage and the community willnot achieve its business objectives. So it is vital to understandthe dynamics of online reputation and use the best availabletools for managing it.Building this web of trust requires both the right technologyand an understanding of human behavior. Lithium’s approachto online reputation combines those. Our software andpractices are based upon:Ten years of social interaction data across several hundredcommunities, tens of millions of users, and 50,000superfans—consumers whose deep engagement with brandcommunities drives others to participate.Research conducted by Lithium’s Principal Scientist, Dr.Michael Wu, who was recently named (along with MarcBenioff and Mark Zuckerberg) as one of the most influentialpeople in CRM. Lithium encourages Michael to sharehis research findings in a blog, which you can find on theLithosphere, Lithium’s own community.
  4. 4. 2share this whitepaperReal-world interactions through the communities Lithiumhosts for its clients, including some of the largest, brand-sponsored communities in the world at AT&T, PlayStationEurope, and Univision. Lithium’s customer success managers(CSMs) are actively engaged with our clients in designingreputation and reward programs in their communities.A well-executed reputation system delivers tremendousreturn on investment by empowering the smartest, mostcommitted members of the community to take on muchof the responsibility of managing the site and driving itsbusiness objectives. A small minority of superfans makes thedifference between success and failure in brand communities.For example:Lenovo’s award-winning customer support site is staffed by amoderation team composed entirely of customer volunteersfrom all over the world—US, Australia, Canada, Germany,India, Pakistan, and Turkey. Initially, the collaboration focusedon the operation of the community—the policies, the rules,and the content. But in just one year, 30 members who hadearned the trust of Lenovo and their peers helped growLenovo’s knowledge base to 1200 articles.English mobile telephony provider giffgaff’s remarkablecustomer community is both the customer service andmarketing arm of the company, which has fewer than 20employees! The average time to receive a response in thegiffgaff support forum is under three minutes, and 100% oftechnical questions are answered by the community. Giffgaffmembers who answer others’ questions effectively and earnhigh status also receive free air-time, which they can thengive as gifts to their friends. This makes these high-statususers word-of-mouth marketing agents.One user on Logitech’s community has posted 45,000 timessince May 2006, an average of almost 25 times per day! Theseanswers to technical and purchase questions have beenviewed millions of times, giving him an effective reach largerand more lasting than the company’s advertising campaigns.An effective rank and reputation system mustdo the following:Reward members for the full range of socially beneficialbehaviors. This sounds simple, but many systems do a poorjob of it. For example, simple reputation systems conferstatus upon users based purely on the number of posts theycreate, but this creates perverse incentives. Members post forthe sake of posting in order to “game the system” rather thanfocusing on quality posts. Moreover, some members visit thecommunity every day, but only post when they have somethingvery important to say. These members may actually be theglue that holds the community together, but many reputationsystems treat them poorly because they don’t post often.Motivate members continuously through their engagementprocess by progressively making succeeding levels ofachievement more difficult to attain. This concept issometimes known as “game mechanics,” and it is critical tokeeping members engaged. Some of Lithium’s long-standingcommunities have over 150 different levels because memberskeep raising the standard.Confer meaningful privileges upon superfans. Many systemsdisplay visible badges of status, and this is necessary but notsufficient. While superfans are motivated by public statusmarkers, long-standing members are motivated by havingauthority, such as the ability to move or delete content, theability to edit or write blog or knowledgebase articles, theability to post comments without moderation, and the abilityto discipline members of the community who cause trouble.
  5. 5. 3share this whitepaperdefining healthfactors for onlinecommunitiesOffer multiple paths to success. A brand community is acomplex ecosystem. Some people may be experts in oneproduct but not in another. Some may be great at startingdiscussions, others may be great answerers of questions,and still others may be friendly and welcoming. The rulesunderlying the game must be flexible enough to enable all ofthese people to feel as though they are winning. If you makea domain small enough, every man can be a king. While thismay not be entirely practical, it is an important maxim forcreating participation among diverse audiences.Lithium’s reputation system has been honed over ten years ofiteration in diverse and demanding environments, from onlinegaming communities to the world’s largest brand communitydealing with beauty. Here are some of its key features:The Lithium platform tracks over 70 behavioral metrics thatcan be factored into the reputation system, with more factorsadded as new features are built into the system. Moreover,Lithium can import factors from external user directories, socustomers can be rewarded for loyalty or purchase behaviorsin addition to their actions within the community. No similarsystem is as flexible or extensible.Lithium’s reputation system allows an unlimited numberof ranks, which are all programmable by business rules.This means that first-time users can experience immediategratification as they move up in rank after they make one ortwo posts, while long-time users can be rewarded for a rangeof behaviors.Lithium’s reputation system is linked to its role system, whichhas over 100 different permissions. As a result, members whohave earned the trust of their peers can be empowered tomoderate the community, can have their content ratings countmore, and can even make badges displaying their status thatcarry over into other sites such as Twitter or Wordpress.Lithium’s reputation system is granular within thecommunity, so members can have an “overall” reputation inthe community at large, but a particularly high status within aspecific area of the community. This gives product specialistsor people who are prone to submitting particularly valuableideas a higher level of visibility than they might otherwise beable to achieve.
  6. 6. 4share this whitepaperLithium’s Customer Intelligence Center uses algorithms to surface to community managers the most important membersin terms of the centrality of their connections with other members, the members who are emerging as extremely prolific posters,and members whose participation is beginning to wane. The value of a superfan is so great that Lithium recommends thatcompanies proactively reach out to members whose participation is declining, and the Customer Intelligence Center gives themthe tools to do that.At Lithium, we have focused on the management of superfansbecause all of our experience and data has shown us that ifyou take care of the most important users, the rest will follow,while the converse is not true. We work with each one of ourcustomers to understand their business objectives and createa reputation structure that works for them. This is a primaryreason why Lithium communities are more vibrant andsuccessful than our competitors’.In the whole, respondents rated their communities as moresuccessful than Facebook at activities that require trust:peer-to-peer engagement and providing pre-and-post salespurchase support; Facebook was seen as more successful indisseminating marketing messages.The two channels were seen as roughly equal in their abilityto create brand awareness. Clients who have initiated brandcommunities see awareness benefits as particularly salientin the first year, suggesting that “newness” of an engagementchannel is in itself a big driver of awareness.The ability for customers to submit and discuss ideas for productor service improvement is the biggest downstream benefit ofsocial customer engagement for clients who have developedbrand communities. Clients who consider their Facebook effortsless successful are particularly interested in bringing thiscapability to Facebook in a more structured fashion.our insightsallow us to identify socialinfluencers today and predictwho will be one tomorrow.our gaming scienceuses a sophisticatedreputation engine toinspire influencers to getdeeply involvedour insightsallow us to counsel ourclients on engaginginfluencers and bringing betterresults to their company
  7. 7. 5share this whitepaperAs Facebook itself approaches full penetration of its coremarkets and its members start to regularize their behavior,historic growth rates for participation in corporate Facebookpages will slow. Call it “peak Facebook.” Recent surveyshave also shown that existing consumers’ engagement withcorporate Facebook pages may be tenuous and fading. Forexample, 81% of those who have become fans of a brandhave abandoned at least one such relationship because of“irrelevant, voluminous, or boring” marketing messages.This suggests that marketers who are committed to usingFacebook to foster relationships with social customers willneed to invent or adopt sophisticated long-term strategies forcustomer engagement. Fortunately, many of the techniqueslearned in brand communities can carry over into Facebook.after peakFacebook51.4%50%answer product questions8.3%42.9%display status or achievements66.7%60%search our knowledge base50%62.9%submit ideas for service/product improvements58.3%60%see the best/most useful content that others have submitted50%42.9%identify other customers with similar backgrounds or needs50%60%find products their friends or colleagues have recommendedmentions by respondents who rate their Facebook pages as less successfulmentions by respondents who rate their Facebook pages as successful
  8. 8. 6share this whitepaperOne of the first questions we see from brands developinga social customer strategy is, “Do I need both a brandcommunity and Facebook, and if so, what role does eachone play?”The answer to this question always depends on circumstancesand business requirements, but given that our audience hasexperience with both venues, we have a very good sense of therole that each one plays.Figure 1: Overall effectiveness of Facebook and brandcommunity. Figure 1 compares the brand community’sperceived effectiveness with the Facebook page’s perceivedeffectiveness in 10 different areas.The first thing to note is that the one area where Facebookshines is in outbound messaging. Because Facebook offersoutstanding reach and many brands use it as a publishingplatform for periodic updates, its prowess as a vehicle fordisseminating marketing messages is not surprising. Socialmedia marketing vendor Vitrue has computed that a fanbase of 1 million translates into $3.6 million in equivalentmedia per year, and brands such as Coca-Cola already seemore unique visitors to their Facebook page than they doto their company web site. In these situations, Facebookrepresents a means of message dissemination that comparesfavorably to advertising on a cost-per-impression basis.Interestingly, however, Facebook was not cited as significantlymore effective than a brand community in creating brandawareness, or creating goodwill for the brand in socialchannels. Given the Facebook platform’s reach andviral features, one might have expected higher scores forFacebook’s ability to increase brand awareness, but there areseveral reasons why the scores may be lower than expected:Brand awareness is still largely campaign driven, and aFacebook page alone does not constitute a campaign.Even when campaigns drive users to Facebook pagesand increase the brand’s fan base, there is no guaranteewhat is onlinecommunity?47.6%56%answer product questions20%52.4%display status or achievements64%57.1%submit ideas for service/product improvements60%57.1%see the best/most useful content that others have submitted52%38.1%identify other customers with similar backgrounds or needs64%47.6%find products their friends or colleagues have recommendedmentions by respondents who rate their communities as less successfulmentions by respondents who rate their communities as successful64%57.1%search our knowledge base
  9. 9. 7share this whitepaperthat these people were new to the brand. Most users whoassociate with a brand page probably have a prior affinity forthat brand.Finally, as we have seen through social media monitoringstudies, “buzz” around brands spikes during successfulcampaigns, but typically returns to a steady state aftercampaigns end.One further explanation may be that our community clientsreport that brand awareness benefits peak during the firstyear, even as other benefits increase over time. If this holdstrue across other social channels, it is possible that thefact of starting a new program in and of itself is responsiblefor increased awareness—probably because that programinvolves an introductory campaign. When the shock of thenew wears off, what is left?As it turns out, brand communities annuitize exceptionallywell. Peer-to-peer engagement and an environment whereusers answer one another’s questions emerge as a corps ofdevoted users forms and mobilizes. Indeed, scores rise inthese areas as communities move into their second and thirdyears, suggesting that communities hold their users’ interestover the long haul.Figure 2: Anticipated benefits versus realized benefits.Peer-to-peer buying advice and customer ideation weretwo benefits exceeding client expectations. The survey tellsus that benefits clients anticipated when embarking upon asocial customer program are not always the same benefitsthat emerge over time. This is particularly true in two areas:idea development, and peer-to-peer pre-sales consulting.Customer feedback/ideation was listed as an original purpose ofa community 46% of the time, but a realized benefit 78% of thetime. Peer-to-peer pre-sales consulting was an original purpose13.5% of the time but a realized benefit 27% of the time.Both of these “downstream” benefits are most likely toemerge as byproducts of trust among members of acommunity. Brands tend to be more willing to harvest anddiscuss rand communities.The ability to find products or services recommended byfriends or colleagues is also seen as a potential area ofimprovement by those who are not particularly satisfied withtheir Facebook efforts.
  10. 10. 8share this whitepaperIf we see a coming convergence between the way peopleinteract on Facebook and the way they interact in abrand community, it is worth asking who will lead thatconvergence and how it will take place. Enterprises varyin their determination of who owns social customerinitiatives. In some organizations, social customer initiativesare owned by customer support or customer experienceteams. Increasingly, however, they fall under the purview ofmarketing or corporate communications functions.Figure 6: Additional requirements from Facebook bysocial program ownership. As we can see from Figure 6,organizations where marketing owns social initiatives aredemanding less of Facebook in terms of new modes ofcustomer engagement. In fact, ownership by marketing ismore important than the perceived success of a company’sFacebook page in determining whether a company isinterested in customers engaging through Facebook in moreinvolved ways. Customer support and customer experiencegroups continue to be more interested in the exchange ofideas and the answering of product questions.Figure 7: Largest challenge with social customer programs,by program ownership Marketing-led organizations’ biggestconcern with social customer programs is how to scale them.Figure 7 shows the chief concern as scaling initiatives with(relatively) less concern about coordination across teamsand departments. 44% of marketing-led organizations cited“resources to scale our efforts” as the biggest challenge, asagainst 34.4% of everyone and (9/34 - 26%) of non-marketingled organizations. This suggests that one reason marketersare less aggressively pursuing “deeper” engagement throughFacebook is that, unlike support or customer experienceorganizations, they lack human resources—like contactcenters—that are perceived to be required to ensure thatsocial customers get the satisfaction they require fromengagement through Facebook. Better, perhaps, not to holdout the promise of a sustained dialog with customers if anorganization cannot make good on that promise.The survey shows that marketers and customer experienceare equally committed to responding to customers in brandcommunities and through Facebook and Twitter. However,it would not be surprising if Facebook’s reach threatens tobecome overwhelming if customer actions on Facebookorganizationalownership
  11. 11. 9share this whitepapercalled for a response. Indeed, perhaps one thing thatmarketers have learned with online communities that theyhave not (yet) learned with Facebook is that customersthemselves can be the solution—not just the cause—of thescaling problem. Time and again, we have seen that largercommunities with a devoted core of superfans actuallyrequire less intervention from companies than fledglingcommunities. The “downstream” trust benefits pay dividends.There is no reason why this shouldn’t be so on Facebook, butmany organizations are in earlier stages of their experiencewith Facebook.Figure 8: Requirement for ROI measurement by channel andprogram ownership. A final area in which brand communitiesdiffer from other channels for marketing-led organizationsis in the need to prove themselves through ROI metrics.As we can see from Figure 8, marketing-led organizationsgenerally have higher demands for ROI, but this is particularlytrue for brand communities. We suspect this is a function ofthe perception that Facebook engagement is free becausea Facebook page is itself free, but also of the maturity levelof Facebook as a technology and a marketing venue. As wesee increasing convergence of social channels, we shouldalso expect to see demands for more sophisticated Facebookmeasurement tools, and growing demands for Facebook toprove its value.
  12. 12. 10share this | © 2012 Lithium Technologies, Inc. All Rights ReservedLithium social solutions helps the world’s most iconic brands to build brand nations—vibrant online communities of passionate social customers.Lithium helps top brands such as AT&T, Sephora, Univision, and PayPal build active online communities that turn customer passion into socialmedia marketing ROI. For more information on how to create lasting competitive advantage with the social customer experience,visit, or connect with us on Twitter, Facebook and our own brand nation – the Lithosphere.conclusionThere are significant synergies between Facebook and brandcommunities. Both offer unique marketing advantages, andwe’ve helped customers extend the reach of their brandcommunities on Facebook. For its sheer size and viralfeatures, Facebook is generally considered more successfulat disseminating marketing messages, and is roughly equal inits ability to create brand awareness. As we’ve seen in onlinevenues before, however, driving people to a social site withoutproviding an outlet for their needs invites a peak-and-troughcustomer engagement, rather than a sustained, vital andprofitable enthusiasm. A campaign-based wave of awarenesswill eventually peak and subside, and may then createunrealistic expectations for customers. As these channelsevolve and the awareness benefits subside, marketers shouldconsider Facebook a useful platform for cultivating an onlinepresence run more like a community than a campaign.The dividends of a well-developed Facebook presence willultimately depend on marketers inventing or adoptingsophisticated long-term strategies for customer engagement,such that their Facebook presence derives its value frompeer-to-peer relationships. But those relationships also haveto be based in trust, both among customers and betweencustomers and the brand. Establishing this trust is a key,long-term strategy. For instance, fostering productivepeer-to-peer relationships among customers and rewardingpositive behavior helps to create trust, as does identifying,motivating, and highlighting your brand’s superfans. Thedownstream annuities of trust and engagement only growwhen brands cultivate true, multi-directional relationshipswith their social customers over the long term. The potentialROI is tremendous.