Goodbye Call Center, Hello People Power – The giffgaff Experiment

By Matthew Lees

giffgaff is a UK-based mobile telephone service provider that runs off the O2 (Telefónica Europe) network. Basically, what it offers is a pre-paid SIM card that you pop into your (unlocked) mobile phone. (European wireless phone service operates on the GSM standard. In the US, many mobile carriers provide “locked” phones which only accept one type – their type — of SIM card. There’s much more flexibility and compatibility across Europe and, indeed, through the rest of the mobile-phone-using world.)

At giffgaff’s Web site (http://www.giffgaff.com), you can order a giffgaff SIM card and add money to (a.k.a. “top-up”) your existing card.

What you can’t do at the site, though, is contact a customer service representative. Not by phone and not by online chat.

giffgaff does provide a single email address for inquiries; automated acknowledgments promise a response within 24 hours. So somebody is handing email support, which is an asynchronous communications channel. But giffgaff does not have agents who provide synchronous support. (I suppose, though, that if you were to show up at giffgaff’s HQ in Slough, England, there’s a pretty good chance they’d help you out in real time. Based on the tone of the language used on the site, they seem an amiable, if borderline mischievous, bunch.)

No Operators Are Standing By
By not having customer support reps awaiting your calls, giffgaff can keep its prices low and its operation streamlined.

Instead, the company provides support nearly exclusively via Web-based self-service and its customer community. giffgaff’s FAQs, question and answer area, and discussion forums are its primary customer service mechanisms.

Within the community, which is running on Lithium Technologies’ Social CRM platform, giffgaff customers answer each others’ questions. Hence giffgaff’s taglines: “Mobile network with a difference” and “We’re people powered.”

It’s Payback Time
All online communities rely on the contributions of a small but essential numbers of dedicated members who answer a large and disproportionate number of questions. These “active contributors” or “super users” are the lifeblood of their communities and an essential part of their communities’ cultures. They typically participate for the personal and professional connections they make, the inside information they may get, the opportunity to learn, the ability to enhance their reputation and “strut their stuff,” and the sheer fun of it.

giffgaff adds another motivation to this list: making money. The more questions you answer, the more “Payback Points” you receive. Payback points (100 points = £1) can either go toward topping up your giffgaff account or be deposited into your bank account as cash.

In fact, there’s more to Payback points than just answering more and more questions. The better your answers are, the more points you receive, too (this is done via Lithium’s “accepted solution” feature). And you can also earn Payback points by acting as a giffgaff evangelist, getting friends to join and promoting the service (e.g., through social sites and networks such as YouTube and Twitter).

A Sustainable Support Model?
It’s a relatively new business and a relatively new community, having only launched in Q3 2009. And it’s still in beta (although this doesn’t mean what it used to; Gmail was ostensibly in beta for about five years). The site is certainly focused and playful. Is it effective, though? It’s too soon to tell. But here are the questions percolating in my mind:

•  How are giffgaff’s group andsocial dynamics different from those communities that don’t have financial incentives? I’d expect that that the giffgaff community wouldn’t put up with much nonsense, as that would get in the way of earning points. But would this lead to a more or less tolerant community and enjoyable community experience?
•  Can giffgaff provide satisfactory support on a long-term basis without a contact center?
•  If so, can this model work in other industries, or are there aspects of giffgaff’s business (e.g., the telecommunications industry, its particular demographics, etc.) that may make it work for them, but not elsewhere?

A quick Web search shows that “giffgaff” is a Scottish word referring to mutual accommodation or mutual giving. Seems like an appropriate name for an ostensibly people-powered network. Kind of a “you scratch my back, I’ll scratch yours” thing. If things at giffgaff go according to plan, the UK could see an awful lot of scratching…

Ricky Gervais (Unintentionally and Eloquently) on Facebook vs. Customer Communities

by Matthew Lees

While driving yesterday to pick up my sister at the airport, I listened to a delightful interview on the radio with Ricky Gervais. He was on the NPR program Fresh Air, talking with David Bianculli — nope, it wasn’t Terry Gross, but veteran TV critic Bianculli is very good, too — about his new animated series on HBO, “The Ricky Gervais Show.”

I’m a fan of Gervais’s, despite the fact that I haven’t watched many episodes of either the US or UK version of “The Office.” (Steve Carell stars in the US version, which is based on the original UK program, created by and starring Gervais.) Through his other shows, his stand-up routines, and his podcasts, you can tell he’s a funny, clever, candid, and amiably self-deprecating guy.

About halfway through the NPR interview, Gervais gives his take on making big-budget shows that aim for mass appeal versus smaller shows that may find only a relatively small, but more interested and passionate audience. He says:

“But, I think I’d rather do stuff that makes a big connection with a few people than a small connection with loads. I’d rather this be a few people’s favorite show, than, you know, millions and millions of people’s 10th favorite show. Because what’s the point otherwise?”

There you have, in a nutshell, the essential difference between a Facebook community and a branded customer community.

Big Connections with a Few vs. Small Connections with “Loads”

You can potentially and relatively easily build up a Facebook fan base that’s much larger than your own branded customer community. With just a single click, people can “Become a Fan” of your organization (or TV show); there couldn’t be a much lower barrier to entry. And marketers tend to love volume.

But the strength of these “Fan” connections isn’t particularly great. Most fans probably never return to the organization’s Facebook page again, and the conversations in the Discussions area tend to be superficial.

In a community that you sponsor and manage, though, you’re building much closer relationships, with stronger connections to your organization and the products and services you offer. (You’re also enabling stronger connections between community members, too.) You members are discussing topics and issues of interest and concern; they’re asking questions and giving answers; and they’re bringing up problems and providing solutions.

Strong and Weak Ties

Network theorists and sociologists call these different types of connections strong ties and weak ties.

(Contrary to how Gervais phrases it, though, there are indeed benefits to weak ties. There is indeed an answer to his rhetorical question “…what’s the point otherwise?”, as good things certainly can come out of being the 10th favorite show of millions and millions of people, especially if you’re an advertiser or an actor, writer, or producer on the show.)

But the main point that Gervais encapsulates is that it’s not always about reaching the most people you can. Big connections (i.e., strong ties) can be more meaningful than small connections, at least to some people and organizations. Marketers (and others in your organization) love deep relationships with people, too.

Your social media strategy should ideally include programs that leverage what both strong- and weak-tie connections have to offer.

Of course, you may not want to base your entire strategy on Gervais’s musings. He’s also the man who said (via David Brent, his Office persona), “If at first you don’t succeed, remove all evidence that you tried.”

——–

For Further Reading
A lot of interesting and useful information is available on the types and degrees of online social connections. Some is academic in nature and some discusses real-world ramifications and practical aspects of these connections. Here are a few sites with good stuff on ties…
•  Karrie Karahalios: Strong and Weak Ties in Social Media, by David Weinberger (March 3, 2010)
•  40 Years On: The History & Evolution of Social Media, by Jenny Ambrozek (November 4, 2009)
•  Weak Ties Build Strong Networks, by Adrian Scholes (May 21, 2009)
•  Design Your Own Custom Ties on Zazzle

A Recipe for Not Getting Your Community off the Ground

By Matthew Lees

Ingredients:
•    ½ Tbs old-school business mind set
•    7 oz. siloed business units
•    2 tsp fear of the unknown
•    1 cup over-analysis

Mix ingredients together. Remove leadership, vision, and an understanding of customer needs. Serve chilled.

————————–

A terrific marketing communications manager I know was charged with doing preliminary research and laying the groundwork towards building an online customer community. She works at a large B2B company that designs, manufactures, and supports particular high-tech products used in all sorts of equipment. With the excitement from this new and interesting project, she tackled her assignment with fervor, bringing in a lot of knowledge about business planning and goals, technology requirements and platforms, necessary resources, milestones and timeframes, and so on.

This was a year and a half ago. The community has yet to launch.

Why? The main reason is that the organization’s culture and structure got in the way.

The initiative started in marketing communications. The original goal was to provide a community space for engineers to ask questions, find answers, pose problems, find solutions, and learn from each other, with the company participating ensuring a comfortable environment and chiming in as warranted. The vision was for this community to be a place where thought leadership developed and where learning and education were the norm (particularly for younger engineers, who could learn from the experiences of the veterans), not only about the company’s products, but also about their overall industry.

[To answer the question you’re about to ask…the support organization, already understaffed, wasn’t particularly interested in the project, which is why marketing took it on, as a customer engagement effort.]

Internal Pushback

As these plans developed, there was pushback from people with concerns that they were moving too quickly. The company has been around for many years, and there were too many concerns about the uncertainty of this strange new. They appreciated that they eventually had to go in this direction, but wanted to take things more slowly. In particular, there were the usual objections that dirty laundry would be aired (“What if they say bad things about us?”) and that prospective customers would be steered to competing companies (“What if they say good things about our competitors?”). It would be better, these execs felt, for the company’s initial foray into community to be via a safer route.

The marketing communications manager just didn’t have enough sway to keep things on track, so the community project changed. Rather than start with a customer-facing community, they’d provide a space for their global field service engineers. Some of these engineers were employees, and others were contractors, but they were all frustrated by an inability to find up-to-date documents and to share best practices with each other. Giving them a community space where they could easily access current documentation and hold topical conversations with each other seemed like the place to start.

Only it didn’t start, because the use case was now different, and dramatically so. Instead of a public customer community, they were now looking to create a private collaboration space. Sure, both concepts had some overlapping technological requirements (discussion areas, document repositories, profile pages), but these are vastly different types of business projects that fall within different business units, require different resources, and have different measures of success.

A Different Business Case

The marcomm person was still involved, although this new direction didn’t have the same appeal for her. It was turning into an IT project, when what had originally jazzed her was the ability to connect, and connect with, customers. So it was pretty much back to square one. (For example, she had previously pulled together a short list of technology vendors with community platforms that fit the bill. Now, though, she had to look at platforms that supported the added requirements from the new use case.)

But this new concept moved haltingly as well, since there were several concurrent technology initiatives rolling out that already had collaborative components. So the cry came up for further evaluation and analysis.

Where are They Now?

Still in the planning stages. The recent boom of social media has generated increased interest in a public customer community, so there are renewed efforts there. And the informational needs of the field service engineers remain imperfect, so improvements through social software are in the works there, too. What seems to be happening is a separation between the two projects.

So things are moving forward, and the marketing communications person feels confident that they’ll launch a customer community by mid-2010. But they’ve added to existing organizational friction, and they’ve lost a lot of momentum.

They’ve also lost an opportunity to be a market leader. In today’s increasingly competitive world, that can be a recipe for disaster.

There’s No Place Like (the) Home (Page)

© 1995-2009 AARP

by Matthew Lees

They say, in politics, you can tell an administration’s priorities by its budget. Office holders can talk all they want about the importance of education, services to seniors, and having the latest and greatest fire-fighting equipment, but are they putting their money where their mouths are? It’s the how they allocate the dollars that tells you what they’re serious about.

Similarly, you can tell a company’s priorities by what’s on its home page.

Sure, home page real estate is precious, and what does or doesn’t appear there (and where it appears) can be a contentious issue. I don’t know of any fist fights that have broken out over what links appear on the home page (and where they appear), but I’ve been around some pretty heated discussions.

The debates are understandable, as your home page can be the gateway to your organization (and your products and services) as well as the first impression it makes. It also cuts across organizational lines, as just about all departments are impacted to one degree or another and should, therefore, have at least some say in the matter. Many voices makes for difficult decision making.

Of course, it’s not all about the home page. There are many ways besides your home page that customers, prospective customers, business partners, and others can discover the content within your site, including community content. In many ways, Google is your home-away-from-home page, as that’s often the entryway to your site’s content. So what’s on your internal pages, and your overall SEO efforts, will also have a sizable impact on how people get to your content.

But there’s no getting around the visibility, cachet, and effectiveness of being on the home page.

So the question comes down to: Is there a link to your customer or partner community on your home page?

If your customers (or partners or readers or users, etc.) are important enough to your organization, there will be. Linking to your community on your home page not only makes it easier for people to find your community, it also makes it easier for people to find each other. And, perhaps more importantly, it makes the symbolic statement that you highly value your customers and their perspectives – the good, the bad, and the ugly – by supporting their candid discussions, collaboration, and networking, and by being part of the conversation yourself.

(I’m not talking about displaying links to your Facebook, YouTube, and Twitter pages. That’s all well and good, but that’s done more for marketing purposes than customer engagement.)

Here’s a selection of a dozen organizations that feature their communities via prominent links on their home pages. (There are certainly many others. If I handed out Customer Community Seals of Approval, all these sites would get them for their home page placement alone.)

•   AARP

•  Adobe

•  American Diabetes Association

•  Caterpillar

•  EMC

•  LeapFrog Enterprises

•  The MathWorks

•  NetApp

•  RIDGID

•  Sage Software (ACT!)

•  Unilever (Slim-Fast)

•  VMware

Many other organizations link to their communities from their home pages, but in less prominent locations. While not ideal, that’s still good. But many companies, even ones with vibrant communities, don’t put them on their home pages at all. Often this is despite the best efforts of the community team. The community manager in one such company has been trying to get a home page link for over a year.

How do you make the home page thing happen? Here are some things to try:

1. Begging and pleading.
2. Looking for examples of competitors that feature their communities on their home pages. Nothing spurs action like showing what the competition is doing.
3. Asking to include a home page link for a trial period of, say, one month. Measure the impact this placement has on the community metrics you track. Can you show a compelling correlation between a home page link and an increase in page views, membership, and return visits? Can you translate these numbers to positive business results?
4. What else works? Perhaps those of you who have fought this battle can share your experience and insights below…

While I haven’t formally tracked home page links to communities, it does appear that this practice is increasing. And that’s a good sign. When it comes to showing your customers how you value them, there’s no place like home.

A Lesson in Customer Engagement from Shawshank Prison

© 1994 Castle Rock Entertainment

By Matthew Lees

One night while I was researching and writing a recent report on best practices in crowdsourcing, “The Shawshank Redemption” happened to be on TV. So I watched a bit of it for the umpteenth time. One scene jumped out as particularly relevant to what I was working on. I couldn’t find a way to weave it into the report, but it’s been on my mind ever since.

About halfway through the movie, the protagonist Andy Dufresne (played by Tim Robbins) ends up managing the library at Shawshank State Prison. In search of newer materials for his fellow convicts to read, he writes letters, interestingly enough at the warden’s suggestion, to the Maine State Senate. One letter a week. Every week. For years.

Eventually — actually, six years later! — he wears them down. Tired of his never-ending solicitations, the Senate sends him a check for $200. (The film takes place in 1947, so $200 was a tidy sum.) The library district also sends him boxes of books and magazines, along with a note saying they now consider the matter closed, so please, stop writing!

Success!

Surely our protagonist is pleased with the outcome. Well, he is…but he realizes that his persistence has paid off. So, with a twinkle in his eye, he says to a friend “From now on, I send two letters a week instead of one.”

I love that line.

Nothing succeeds like success, and the Main Senate and library district made Dufresne successful in his letter-writing campaign. (I’m admittedly focusing on this nice little moment in the movie, ignoring the harsh reality and horrid conditions under which Dufresne lives, although he does meet with success again later in the film.)

What did the Maine Senate do to deserve the increased volume of letters from the Shawshank librarian?

They listened and they took action.

Isn’t that what your customers (and business partners and employees) are looking for from you?

Crowdsourcing programs aren’t the solution to every problem, but they can be a great way to help you listen to your customers, and help them tee up their most important ideas, wishes, and requirements, so you can take action. For such programs to work, you need to engage people who not only have good ideas, but also the perseverance and determination to make things happen. If you’re running a crowdsourcing program (or managing an online community) your biggest wish should be to find and involve as many people as you can who have these characteristics in common with Andy Dufresne.

Like Dufresne, when people see how their actions generate positive results, they tend to repeat those actions. We hope your customers don’t need to be as determined as he was — your crowdsourcing efforts should see results in time frames closer to six weeks or six months than six years — but showing them how their input is making things better for your business, and, in turn, for them, too, should lead to both increased participation and a more effective and profitable business.

At least…I hope.

Having an Impact

By Matthew Lees

I must admit that I’ve always liked the word “impact.” In just two short syllables it conveys significance and manages to be somewhat onomatopoetic. It both sounds like, and makes you think that, something important is happening.

Even when it’s used to describe something unpleasant, such as an automobile collision, the word brings an air of style. It’s much more refined than “crash,” and much more serious than fender-bender. (I’m speaking only of the noun; the adjective drops down more than a few levels in my book. While I’m fortunate, for example, never to have had an impacted molar, it doesn’t sound like a particularly delightful experience.)

In my role as an analyst and consultant, I use the word as part of the phrase “business impact,” to refer to the organizational benefits of online communities, social media, and social technologies. I’m not the only person who gravitates toward this term, of course but I have used it regularly and consistently over the years, much preferring it to the abbreviation “ROI” to help organizations focus on the bottom line. (While ROI is a perfectly valid and often necessary term, it tends to carry a bit of baggage.)

So when I first heard the name of Mike Rowland’s company, Impact Interactions, my ears perked up. I liked the sound of it from the get-go. It tersely and alliteratively says, “Let’s make a difference in the way you connect with others.” But there’s a large and vital difference between having an effective company name…and having an effective company. After getting to know Mike over the past few years, after having hearing him speak at conferences and other events, and after seeing him work to move the industry forward in a thoughtful, collaborative way, I quite resonate with his approach and his perspective. The company name fits.

I wouldn’t have taken this on otherwise. So it’s a great pleasure to have this opportunity to interact with you in this space. It’s a great responsibility, as well, to provide something of differentiated value amidst the depth and diversity of experience, knowledge, and opinions that pervade the blogosphere.

In the coming weeks and months, I’ll be writing about my observations on the interactions between people and technology, between business needs and customer goals, and between best practices and less effective methods, all as they relate to online communities and social media. I hope you’ll interact with me along the way – discussions are certainly more fun for participants and readers than monologues – supporting or questioning what you read here. That way, we can have an impact on each other.

~ Matthew

Welcome to our Special Guest Blogger Matthew Lees

I grew up watching television shows where each week there was a “Special Guest Star” on an episode each week. These guests provided a little extra to the show and usually were cool celebrities. Think of all the villains on Batman for example or the Brat Pack on “Vegas” or the vacationers on Fantasy Island…or for those of you a little younger, the guests on the Simpsons.

Following that idea, I’d like to introduce our Special Guest Blogger, independent analyst Matthew Lees.

Matthew is a well respected analyst in the Social Media and Online Community World (see his bio here). He is the author of reports through the Patricia Seybold Group such as:

1. Selecting An Online Community Platform
2. Best Practices In Crowdsourcing
3. Analyst Report: Lithium’s Social CRM Suite

After reading his research and reviews of his findings, I thought Matthew truly understood how to make social media technology work in an enterprise organization. So, like all good social media practitioners I followed him on Twitter (@mlees) and his blog. Matthew and I first met in person at one of Forum One’s Online Community Unconferences. We’d been reading each other’s blogs and reports and discovered that we come to the industry with the same high level focus… using these tools to improve business results. While Matthew focuses on the technology and its impact, we focus on the process and the users. Together, we cover the issues that all enterprises need to succeed in their social media projects.

We decided in late December over a crab cake lunch here in Maryland, that we should find a way to collaborate together. Our idea is to inform, educate, and drive the best practices we’ve developed to a broader audience with this blog and our twitter accounts. Matthew will be posting here over the next few months both independently and collaboratively with our team members.

If you have a suggested issue of topic for us to cover, please contact us by adding a comment on this entry or by using our contact form.

So, with that said welcome Matthew!

Mike Rowland, President

Social Media – The Global Story

The world is adopting social media at higher and higher levels according to a recent Neilsen Report.  According to the research by Neilsen, global time spent on social media sites increased by 82% in December 2009 when compared with December 2008. Pretty large increase especially if you look into the footnotes and understand that this research is based upon only U.S., U.K., Australia, Brazil, Japan, Switzerland, Germany, France, Spain and Italy. No China, no India, no Russia, nor are there any Nordic countries listed.

But this growth coincides with what we’re seeing here at Impact Interactions. We’ve helped develop and launch multiple communities in countries such as China, Russia, Italy, France, Germany, Brazil, Argentina, Mexico, Poland, and elsewhere over the past several years. And while clients are still interested in their communities in the U.S. their focus is shifting. We are seeing more interest in companies asking us to help them launch communities and social media plans in countries ranging from Japan to Russia to Brazil to Mexico.

The growth in third party applications such as Twitter and Facebook have helped companies to understand the potential reach of the medium, but it is the local language social networks like StudiVZ (German) which have helped in-country marketing teams decide that they must be engaged with their customers using social tools. So even as Facebook moves past these local social media/networks, the smart marketer understands that it’s not the tool so much as it’s the growth that matters in deciding whether social media is a good tactic in a particular market.

In our experience leading a social media workshop in Innsbruck, Austria at the prestigious Management Center of Innsbruck it was clear that our non-US audience were more engaged on local language social media tools including blogs and social networks than on the U.S. offerings. (In fact, it was there that I learned more about StudiVZ and other offerings.)

That doesn’t mean that non-U.S. members are not on Facebook, Twitter, or LinkedIn. But it does mean that for the savvy global marketer the research and identification of which sites or applications to use is a bit more difficult. While the strategy remains the same, each Internet culture requires a clear focus on localized tactics. That means a cookie cutter approach using the same tools like Twitter, Facebook, or other application across multiple markets will not deliver the results you desire.

Watch the growth, it’s here to stay. But also look for the smaller sites that can deliever more value to your organization when using social media globally. As the old adage goes “All marketing is local.” The same applies to social media.

-Mike Rowland, President

Men vs. Women in Social Media

In surfing through the web on my routine social media update, I stumbled upon a study done by www.royal.pingdom.com that brought up an interesting question, “What is the ratio of males to females participating in online social networks?” When I initially saw the title of this study I thought, “Of course, it’s got to be females” which was a correct assumption, but what I found equally as intriguing were the individual site’s results.

The survey conducted through data from Google Ad Planner(US Data Only), tracked 19 of the most popular social networking site’s demographic behavior. The study showed that 16 of the 19 sites were female dominated in terms of number of users. Sites tested in the survey included popular social networks like Twitter, Facebook, MySpace and LinkedIn, as well as social new sites like Digg, Slashdot and Reddit.

An interesting point taken from these results was that the only 3 male dominated sites were social news sites where users post and rate news threads based on their likings. Slashdot, Reddit and Digg attracted a male user group of 82%, 66% and 59% respectively. This says something about the ways in which males and females utilize social media. An appropriate quote I found from professor Russell-Bennet of Queensland University of Technology states, “It seemed women wanted to express themselves, while men enjoyed the thrill of social competition.” This proves to be true with men taking on a more competitive role in sites that involve ranking and user scores, where more females want to interact and connect with others.

Although these findings don’t prove to be particularly surprising, I found them quite informative and insightful in to the world of social media marketing. Be sure to take these findings in to consideration when developing a marketing strategy targeted towards one gender! What are your thoughts and opinions on this?

-Ben Crutchley, Manager of Client Services

Social Media Metrics – Driving to Value

We’re members of the Online Community Research Network and recently received the latest report on Community Metrics derived from a survey of the membership. While we’re happy to see a lot of progress in the responses about tying measurement to business objectives, we continue to see confusion about measuring value. Over the past ten years, we’ve developed a methodology that can help online community and social media managers structure their reporting in order to focus on the value their efforts produce in terms of business objectives.

Looking  at the report’s question #12 (Were your community’s metrics created in support of your organization’s broader business goals or were they created independent of a corporate business?), the following responses were given:

• 47% Created to support existing business goals
• 31% Created independently but helping refine existing business goals
• 22% Neither of the above (summarized from three additional responses)

Looking at what metrics the respondents use to support or refine existing business goals provides insight into the confusion over what constitutes value in online community and social media efforts.

Question 19 asked “What are the three most important community key performance indicators (KPIs) in the reports you send to upper level management?” The answers are a startling contrast to the answers to Question 12:

1. Number of Page Views or Clicks
2. Number of Site Visits
3. Number of Unique Visits

Why are these responses startling? Because the metrics are traffic metrics not value metrics. These are base level metrics not KPI worthy metrics for upper level managers. (In fact, three of the top five metrics measured as detailed in an earlier question were traffic metrics too: Unique Visitors, Page Views, and Visitors. Only two were not: Registrations and Posts.)

What these two questions’ responses demonstrate is that the respondents are still struggling with determining value from their community work that truly builds into measurable business objectives.

When asked about ROI, 71% of respondents confused engagement and traffic metrics with value. Only 29% correctly identified a tangible value metric to use in measuring ROI.

To provide a little clarity in reporting metrics, let’s look at how Impact Interactions’ reporting methodology can help. First, our categories are structured as follows:

• Traffic - The basic building blocks that measure “How Many?”
• Behavior – The second level of metrics measuring conversion and engagement
• Value – The highest level of community metric where the activity has an economic or dollar value associated with it (This is what management really cares about!)

Some of the actual metrics that we use for clients are as follows:

1. Traffic - Unique Visits, Unique Visitors, Page Views, etc.
2. Behavior- Page Views/Unique Visit, Page Views/Unique Visitor, Active Members/Unique Visitors, New Registrations/New Unique Visitors, Total Registrations/Total Unique Visitors, Downloads/Registered Member, Content Added/Registered Member, Content Added/Unique Visitor, Downloads/Unique Visits, Full profiles completed, Referrals from Twitter/Facebook/YouTube, etc.
3. Value – Number of successful customer support resolutions in the community, Total Contact Sales Inquiries/ Total Unique Visitors (or Registered Members), Total Leads Qualified/Generated, Product Referrals, Positive Product Reviews as a % of Total Product Reviews, Direct Revenue Generated from Community Activities, Length of Sales Cycle for community member vs non-member, Average Purchase Size/Frequency for community member vs non-member, etc. 

Take a look at those metrics again. The first two categories of Traffic and Behavior can usually be obtained using the platform’s tools (like Jive, Telligent, or Lithium) or through your web analytics’ tools (like Google Analytics, Omniture, or WebTrends). The Value metrics take a little more work. In fact, to really be able to perform a realistic ROI calculation, you will need to get help from outside the community/social media area of your organization.

To derive an ROI related to marketing objectives from a community, you’ll need to access your CRM system. For a support ROI, you’ll need to know the cost per interaction in complementary/competitive areas such as a call center. The standard tools won’t get you there, you’ll have to build relationships within your organization in order to really build a solid analysis that ties back to business objectives. An ROI model built on traffic will contain far too many holes to be useful.

We’ve been helping our clients with these issues and have developed a strong set of best practices that can help you succeed in your reporting. Please feel free to share your insights into this issue and ask questions about reporting and analyzing your community and social media efforts. We’re happy to answer them and help reduce the confusion.