What is the value of a community member?

As I move forward with my community 2.0 initiative I realize how important it is to justify the value of our community members. Once you get beyond justifying the need of a strong social community strategy for your company the next step is secure the required funding to support your strategy. Most executives understand the need to be actively engaged with their customers but will want data points to back that up. After some #BigData analysis I now have that answer.

 

My initial analysis has determined that companies that have community members average purchase is 48% higher than those companies who do not have any community members. The answer why is elusive but some assumptions can be made. What we know is community members are much more informed about your products, much more engaged in options and are regularly looking for answers to help make their solution better. If you look at all those eagerly awaiting the release of the #iPhone5 and IOS6 today from Apple you can relate these assumptions. Those who purchase a new iPhone today will need a new charger, a new case and probably any other accessories that might enhance the value of their purchase. If you use this as an example for your company then you can justify the value of the community by educating existing customers and prospects on not only your core products but also any other accessories that will help make that solutions stronger and more beneficial.

 

The opportunity resides in member acquisition. If you can increase the number of companies who have community members by 1% the increase in revenue is substantial. This is the monetization justification that executives want before committing to investing more in your social community strategy. The formula to calculate this is really no different than my formula for determining SEO ROI http://bracerennels.com/seo/.

 

If you know your cost for member acquisition and what your investment is to convert hose anonymous visitors to active community members then you can relate what that increase will be in return on revenue from average purchase. There is also another assumption which is the more actively you engage your members from a company you have the larger that average purchase price will rise.

 

So, how are you measuring your community?

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Web 2.0 is Dead

You Don’t hear much about web 2.0 which was all the rage a few years ago. The concept of having a dynamic content management system for frequent updating to keep the content of a website dynamic and fresh is no longer sufficient. Technology moves fast and you can’t get any faster than real-time dynamic user generated content. This is why web 2.0 is dead and community 2.0 is alive and thriving. The introduction of Twitter and the mobile evolution has changed the way we consume data. We expect it to be dynamically served to us based on our preference and then we will engage when we find something interesting.

A recent Havard Business Review blog post by Bill Lee Marketing is Dead made me really start thinking about tis as I thought traditional marketing was dead 4 years ago. The more I thought about it the more I realized that not only is the way we market dead it has changed to how we engage and build relationships. So, what is next? Peer review and collaboration and I don’t think you have to look further than Amazon.com to find example of this as rudimentary as it is. Taking the web 2.0 platform and integrating a robust community experience is where digital marketing is headed. We as consumers don’t want to receive email blasts anymore and we don’t want to download your latest whitepaper. What we want is to search, find and discuss and you can’t do that with a static website.

If we look at consumers (inclusive of B2B as well) buying process, what we find is a desire for confirmation that the solution we have found via search is indeed the best fit for our need. That confirmation comes from peer review and user generated content. When I find a product that I believe has the specifications to suite my desire I want to talk to someone else who already bought the product and can verify if it was good, bad or ugly. What you will see companies doing very soon is integrating their social and community member discussion into their product pages on the website so there can be this dynamic user generated content to help confirm a prospects solution.

This accomplishes a few things. It opens up the transparency of your company product line to peer consumption and advocacy engagement with other potential prospects, ultimately shortening your sales cycle. Traditional marketing use to spend hours of effort finding and writing case studies for customers, then hoping others would read them. The case study is dead. Eliminate the middle man and put your prospects in direct contact with your brand advocates and let them sell the solution for you. While you’re at it put your customers in direct contact with your product engineers for dynamic product innovation.

This isn’t all without effort, but it will be a more efficient use of marketing dollars and with an infinite return on investment. A robust community, community management , content curation and strong advocacy program will be needed but you and your target audience will appreciate the direct access and honest engagement.

Gamification for Communities

A few weeks ago we integrated the Badgeville gamification engine into our Jive community to recognize, award and motivate our community members for their participation. We launched project R.A.M.P official this week and our largest event in Las Vegas… So far the results have been nothing short of outstanding. The interest and excitement from our members to participate in the defined missions far exceeded my expectations. I haven’t had a chance to deep dive into the data analytics just yet but preliminary results suggest more members are interested in completing and viewing the profile as well as an increase of 25% in reply to discussions. I am a firm believer that social media and community programs are complimentary to existing traditional marketing programs. So, when we decided to launch rewards and recognition at our event it not only created an excitement for those attending the event it provided a renewed interest for engagement. 

It is a simple concept to recognize those who contribute the most and adding a leader board which features those members as the most active contributors seems to be a big kudos the our community members. However, the most intreguing result has been the outreach of our community members suggesting missions and actions that they would like to participate. Many of these comments have helped us define our Elite Program to engage our most active contributors. They have requested everything from speding a week in our development labs, to getting access to product engineers as well as roadmaps. This is exactly what technical community engineers and professionals want and what most companies would love to have. A passionate and experienced customer base to help innovate better products. When I launched communities five years ago the primary purpose was to connect our customer base with our product management teams for real-time product evaluation and feedback throughout the developement cycle. This agile methodology not only allows our customers to feel more engaged and responsible for the products they are implementing but also help innovate better features for product releases.

 

Stay tuned for more as I continue to monitor the progress and have a chance to provide some in depth metrics from our results.