Tracking Down Online Community ROI (Part 2: Business-Side Metrics)

by Matthew Lees

Part 1 looked at community-side metrics. This is the data you get from your community’s Web server log files, your community platform database, and any third-party analytics systems (such as Google Analytics or Omniture) that you’re using.

It’s also the data that you – as a business sponsor, community manager, or other stakeholder – likely have direct access to. And while it’s important information, it’s used primarily to help ensure the health of the community, not quantify and provide insight into business value. For that, you need to tap into business-side metrics.

Business-Side Metrics
These are the metrics that do show business value. Unfortunately, for most online community use cases, such data lives in places that you probably don’t have direct access to or control over. This is where the legwork and the relationship building that Mike Rowland referred to in the previous post come into play.

Where to look in your organization and who to build relationships with depends on what you’re after. Here are four common business cases for B2B communities, with an overview of their potential business value as well as mention of the relevant business-side metrics, location of these metrics, and people who can help you access and understand these metrics and what they mean for the bottom line.

1. Service and Support. Reducing contact center costs is one of the primary business goals of a community in which customers help answer each others’ questions and solve each others’ problems (via what’s often called “peer-to-peer support”).
Business-side metrics: number of incidents (by source, e.g., phone, email, chat, etc.), first-contact resolution, agent hours
Where the metrics live: contact center analytics system
Who to make friends with: not only the VP of Support, but also the manager who is the most fluent with the call center’s reporting and analytics

2. Product Development Feature Set and Road Map. Here you’re probably looking for (a) ideas for new products and services, (b) ideas for new features and functionality, (c) ideas around improving customer-facing processes (i.e., making it easier for customers to do business with you), and (d) the prioritization of these ideas. These ideas and their prioritization by customers can improve processes, reduce time to market, and give you higher confidence that your product road map is what your customers want.
Business-side metrics: number of customer ideas that are implemented; number of existing ideas that were validated by customers; time to market; dollar value of reduced time to market (can be a squishy number)
Where the metrics live: product tracking system; business process systems (ideally these all track the sources of ideas)
Who to make friends with: product development / R&D teams, particularly the keepers of the road map and features/capabilities lists

3. Customer Acquisition and Lead Generation. Communities are a great way for people to go beyond what they read on your Web site and in your marketing collateral, to get a sense of how people are using your products in the real world. So prospects are part of the community ecosystem as well as existing customers. A vibrant community full of helpful, engaged customers can be effective in moving prospects into your sales pipeline.
Business-side metrics: number of new accounts that came in through the community, new revenue from these accounts
Where the metrics live: CRM system or other sales tracking application
Who to make friends with: the sales team, particularly the sales operations manager who tracks sourcing

4. Customer Satisfaction and Loyalty. Numerous studies have shown that online communities can have a positive affect on customer satisfaction and loyalty. The tricky thing in demonstrating this for your own community is to separate out cause and effect. Communities can be self-selecting; your most satisfied and loyal customers are probably over-represented in your community. For them, the community didn’t cause their high level of satisfaction, for example. Any surveys you do to measure satisfaction and loyalty should take this into consideration.
Business-side metrics: survey results; customer satisfaction / loyalty methodology or system, such as Net Promoter Score (NPS)
Where the metrics live: survey results database; satisfaction, loyalty system
Who to make friends with: the marketing specialist who measures customer satisfaction and loyalty for your organization

Legwork and Relationship Building
You may have noticed that the business-side metrics are really just the ones that your organization and your colleagues are already using to identify and analyze business value. You’re just looking to apply and tune them towards quantifying their impact from the community.

Of course, while the methods may be familiar, it isn’t necessarily easy to compile metrics and estimate dollars saved and/or generated. A lot of it comes down to doing the legwork and building relationships with the right people. Ideally determining community ROI is at the top of their priority list as well as yours. It will take time and attention to come up with ROI hypotheses, test them using data you’ve tracked down from wherever it lives, analyze the results, revise your hypotheses accordingly, and iterate. Hopefully your colleagues become partners in these efforts.

So how do you build these relationships, make those allies, and get the information you need? We’ll leave that for another day. But experience shows that chocolate helps…

Back to the blog

Super Bowl of Advertising

Super Bowl XLVI is now less than a month away and sports fans across the world will be tuning in to see what team will raise the Lombardi trophy this season. In recent years, the games have been filled with exciting story lines and each had their fair share of excitement. Super Bowl XLII in 2008 featured the undefeated New England Patriots and Cinderella story New York Giants and drew a Super Bowl record 97.5 million viewers and trails only the M*A*S*H series finale as the largest telecast of all time. If you are like me, you are probably wondering what the M*A*S*H series is, not to mention how they managed 105 million viewers in 1983.

If recent history is any indication to the number of viewers that will be tuned in for this year’s Super Bowl, corporate advertisers and sponsors should be as ecstatic as Mel Kiper Jr. on draft day. The unforgettable commercials that million dollar 30 second Super Bowl spots have given us over the years are priceless right? Maybe not so this year. According to a recent New York Times article, the rates have decreased for a 30 second commercial during Super Bowl XLVI. Economic downturn and a rising trend amongst corporate advertisers to buckle down spending have lead to the decrease in 2010. Each 30 second slot in Super Bowl XLVI has been sold for $2.5 to $2.8 million.

Super Bowl ad giants FedEx, General Motors and Pepsi announced they will be absent from the commercial lineup this season. Pepsi has elected instead to launch a social marketing campaign, “Pepsi Refresh,” a program that rewards the best consumer ideas with grants up to $250,000 each. For a fraction the cost of one Super Bowl ad, companies like Pepsi can extend their reach using social media tools, but the appropriate plan, strategy and team needs to be in place to support marketing efforts. Unfortunately for Pepsi, the “Pepsi Refresh” program opened with major problems with security and privacy settings for its users. Pepsi’s flawed launch will undoubtedly damage their brand image and discourage consumers from participating in future efforts online. Companies are diving into social media campaigns head first without any understanding of how outreach relates to core business goals, or if they can achieve them. Only time will tell if companies like Pepsi will continue to launch social media marketing campaigns without the proper resources in place.

Eric Willey
Manager of Client Services

Back to the blog

Twitter for Small Business = Great Tactic

Over the past several days, we’ve seen more news on Twitter for small business come out in the press and blogosphere. For example, there’s the AdAge article “Twitter Proves Its Worth as a Killer App for Local Businesses” which has several success stories of how small businesses have won customers using Twitter. Even Twitter themselves are contemplating how to help small businesses use their platform to grow. While they are focused on analytics rather than advertising ( a good sign), Twitter is doing a great job of trying to understand and reach an important segment which will help them grow.

We see the use of Twitter with our large clients like Cisco and NetApp continuing to grow. But we are also getting more inquiries from smaller companies who don’t want to host a community, but want to use social media effectively to achieve their goals. In our discussions, we suggest using applications like Twitter, Yelp, Facebook, LinkedIn, Bebo, MySpace and others to start building their online brand and reputation. The response we get in many cases is:

“Okay, that makes sense but I don’t have anyone to run this.”

We’ve seen a small market emerge in technology to monitor social media and brand reputation (keotag &  boardtracker come to mind). But there also needs to be a new service to help small businesses use social media effectively at a price that works…and that seems to be the missing piece of the puzzle to gaining wider adoption of these tools.

It’s an issue that we’ll be working on in the next few weeks. Stay tuned.

Back to the blog

Are You As Connected As Bill Gates?

Great article today (leap year) on a question Bill Gates asked on LinkedIn.

LinkedIn Members Question Gates Query

What struck me as the best part of this article was this little tidbit about Bill’s profile on LinkedIn:

LinkedIn’s public relations firm e-mailed a link to Gates’ profile, which shows that so far he has three connections.

Guess he doesn’t really need any though….

Back to the blog

Brand Monitoring: Top Trend for 2007

From the MediaBrains Newsletter today, the Top 7 Trends for 2007 and we couldn’t agree more with their most important trend:

At number 7: Brand Monitoring (or as we call it Brand Defense)

Remember back in high school, when you were worried about your reputation? You found out someone was spreading rumors about you, but you didn’t know who it as? It’s not so different in the business world today. With the popularity of blogs, message boards and other forms of user-generated content, perceptions about products and services – both good and bad – can spread around the globe at lightning speed, making it difficult for marketers to monitor what is being said. Because a great brand can take months, if not years, and millions of dollars to build, it should be the thing businesses hold most precious. If you can’t control what others say online, you can influence people’s opinions about your business. First “Google” your company and see what turns up in the search results. Secondly, regularly post your own opinions and responses on your website and contribute to relevant blogs and forums. Take steps to create your own blog or message board and regularly issue optimized press releases. Another avenue to consider is hiring a company that offers “brand monitoring” services, which provide intelligence about online usage and distribution. To succeed, protecting your brand and online reputation is probably the most important marketing trend for 2007.

Contact Us to learn more about protecting your brand online

Back to the blog

Expanded Interactions Management Center Opens

The trend towards outsourcing the moderation of user-generated content to professional services firms such as ours continues to grow. In order to meet the demand for these services and to accommodate our clients’ needs, Impact Interactions has expanded its operations. Our new Interactions Management Center (IMC) serves as a community management hub for our clients, allowing our teams to share best practices to ensure that our clients’ online interactive strategies succeed.

The ability to generate best practices grows significantly when the interaction teams are able to communicate and report upon what is working and what is not with the interactive sites we manage. These best practices are shared with our clients in an effort to help them refine their strategies which in turn leads to higher return on investment (ROI). Our knowledge also helps our client avoid making costly mis-steps with their communities.

We believe that this is a distinct advantage over firms which hire virtual moderators scattered across the country. In the fast moving world of online management and strategy, it is important to quickly and efficiently capture the knowledge gained by our teams and use that knowledge to help our clients grow and achieve results. Combined with our seven years of experience in launching and managing over 30+ online communities, it’s a powerful combination to build client success. That’s why we’ve centralized our teams and operations here in our Maryland offices.

If you are looking into starting an interactive community or social networking site for your organization, we can help with everything from aligning your goals with the appropriate offerings to technology selection to launch activities and moderation services. If you are looking to reduce your costs of moderation, while increasing your results, we can help.

Please use this link to contact us to learn more about our services or for our free consultation.

Back to the blog

Why You Must Have a Plan for User Generated Content and Rankings

There have been several great posts and comments on the MarketingShift blog regarding the process for promoting user generated content on Digg.com. From their website, Digg states:
Digg is all about user powered content. Every article on digg is submitted and voted on by the digg community. Share, discover, bookmark, and promote the news that’s important to you!

Ah, but according to many users, the system is rigged. See the Digg article “Troubles In Diggville” started by Michael Arrington on TechCrunch. It appears that groups of Digg users have banded together to ensure that articles that represent a particular viewpoint are pushed off the first page (and in some cases further than that…). The political commentator Michelle Malkin was one of the first folks to point this out and to complain to Digg co-founder Kevin Rose.

In response to the growing criticism, Kevin Rose stated that while user groups recommending content is a great thing, Digg will be updating its algorithm which ranks articles submitted for popularity. The goal is to reduce the impact of groups on rankings while increasing the diversity of Digg’s members who impact the rankings. We’ll see if it works.

Way back when in the distant Internet Bubble years, gaming the system to promote content or earn points in communities was rampant. It continues today. If you are implementing a ratings system or other type of rankings which are controlled by members and impact user generated content, you need to be very clear about those who game the system for their own gain. In short, you must give your moderators the ability to short circuit the gamers for the overall good of the site.

Only by having a detailed plan of action covering this type of user behavior (and it is very common) can user generated rankings effectively help promote user generated content. After all, the idea of user generated content is to drive activity for your site and insight to your team. Gaming only leads to more Paris Hiltons… and that dilutes the experience. So be prepared, write out your plan, test it, and be ready if it breaks down…

Back to the blog

Privacy and Trust In The Age of Social Networks

An interesting article describes the reaction of Facebook members to the News Feeds feature added Monday which allow members to be notified when a friend’s site is updated. From a member’s perspective, being updated when friend’s update their pages is a good thing, right? Not if you’re a member of Facebook apparently. Look at the quotes from a members’ petition which has 500,000 members who are protesting this feature’s addition to the Facebook offering:

“News Feed is just too creepy, too stalker-esque, and a feature that has to go,” reads the petition of the newly formed “Students against Facebook News Feed.”

Other comments revolve around the stalking issue as well. Given Facebooks tighter controls (registered users must have a .edu email address or other approved domain email address), this seems like a bit of an over-reaction. MySpace is a completely different deal as there are almost no controls….

BUT HERE IS THE KEY TO THIS — when planning new features, there is a balance between the trust you’ve gained with your members and the functionality improvements you believe you are giving members. The most important reason why Social Networks survived early on was that their members trusted that only people they knew or wanted to know would contact them. There was at least an outward appearance that private information would stay private. But as Social Networking sites have expanded, the value and the trust has declined in members’ eyes. For instance look at LinkedIn… How many of you have been contacted by someone two or more levels away from your contacts? (Think six degrees of separation or the Kevin Bacon game.)

Will the News Feed feature survive at Facebook? I think it will, but the management at Facebook apparently didn’t think the backlash would come as hard as it did. And that is the second lesson from all this. When you are adding features, be prepared for the worst and have plans to help your membership get through the changes. In this case 5.3% of the members of Facebook (500,000 out of 9,500,000) have signed a petition to protest the changes. That is significant. Facebook’s blog responds by posting “Calm. down. breathe. We hear you,” to its members. That might work with students, but it would never work with adults as it comes off as condescending in its tone.

As mentioned in a previous post on our blog titled “Web 2.0 Collaboration Success Comes From Facilitation”, the role of moderators who can effectively facilitate conversations (especially conversations like this) really make the difference between a site which is trusted by its members and one that is not.

Want to learn more about Privacy and Trust in Social Networks? Contact Us and we’d be happy to continue the conversation.

UPDATE 9/9/06 — After much feedback from its userbase, Facebook has made a change… members can now decide through privacy settings what (if any) details will be available on the News Feed that reports updates to their pages. Good going Facebook, but this whole thing could have been avoided with a little planning.

Back to the blog

Internet Strategy Forum: Executive Summit 2006 Observations

This was a very well run event with fabulous speakers. Some of the highlights included:

• Erin Hintz of Symantec speaking about engaging with your customers. Symantec has just started blogging to interact with their customers about security. For example, the Norton Security Blog or the Symantec Security Response Blog. Both are on the right track. But what was even more interesting to me was the launch of a community around Symantec customers featuring digital photo uploads as well as their Safetytown video series. Safetytown has had over 100,000 unique visitors watch their first video.
• Atakan Cetinsoy of MyStrands.com speaking about the convergence of digital media and online communities. Atakan helped get the Apple iTunes store off the ground and is very plugged in to consumer trends in the global media world.
• Adam Freed of Google giving us the update on Google’s use of localization and native language search (up to 113 languages as we speak). What was facinating was the degree to which Google is actively listening to its users. (Best comment at the event was from Adam. He was discussing how his team put together the business case, filled with statistics about demographics and internet usage to determine which languages should be offered by Google globally. This was then presented in a very serious manner to Sergey and Larry, among others. After justifying their view of the world and the projected growth in usage in the languages proposed, Sergey asked “You really have no idea what is going to happen do you?” To which the answer was “No, we don’t.” Very refreshing honesty… )

The event’s audience was also very interested in the interactions that presenter’s companies have with their visitors. From questions about blogging to moderating communities to using interactive tools for ROI, it was nice to see that at least in Portland Oregon the web teams understand that pushing content is no longer working. It’s all about interactions.

If you’d like to download my presentation on Global Online Communities featuring Cisco and SAP, as part of the panel discussion on tools and features of global websites, click here. You’ll find the link to download it on our corporate web site’s home page.

Thanks to the Internet Strategy Forum for inviting me to speak. I enjoyed my trip to Portland.

Back to the blog

Resurgence in Online Community due to Web 2.0?

Web 2.0 is here and there are more and more organizations moving forward with launching online communities to build interactions with their site visitors. That’s the good news.

The bad news is that many of these communities are being launched with a suite of features, but without proper outreach and advertising. This makes them virtually invisible except to the most loyal fans. We’ve seen several communities launch recently which have no traffic and no action other than easily recognized employee seed posts. When searching for information on these organizations’ and their product and services, there are no listing of their communities (from either organic search or PPC). Worse, many of these new communities are feature rich but seemly without a true purpose. Too many offerings dilute your traffic and reduce the organizational effectiveness of your community.

Several of our roundtable members are embarking on upgrading their sites to the illusive Web 2.0 standards. What is encouraging to see with these companies is that they are building upon what they’ve learned from their work with communities and interactive features. Sites such as Cisco.com, SAP.com, and others understand that best practices for interacting with your visitors must be baked into the process. The idea of Web 2.0 is to meet your visitors needs through interactions and collaboration, not just to offer the latest and greatest features. It’s not just about adding blogs or podcasts, but finding out what your visitors really want through careful analysis of metrics, visit patterns, multi-variate A/B testing of pages, and TALKING TO YOUR VISITORS to find out what they really use your site for and what they want!

You’ll only get to Web 2.0 if you truly meet your visitor needs. Forget cool, go for what your visitors need and with what will provide your organization with the best results. Want to discuss how to do this? Contact us for a free consultation about using interactive features to build significant results for your organization.

Back to the blog