Customer Communities Don’t Have To Be Complicated
We know companies that invest in creating networks of relationships perform better than those that don’t. We also know that customers connected to a company’s “network of relationships” are more valuable. One of the best ways to create a customer network is to develop online communities. There are myriad vendors, platforms, consultants and thought leaders helping develop the space. We seem to have all the pieces on the table for success.
So, why is it still so damned complicated to develop customer communities? I see 5 reasons:
1. Indulgence of Complexity
Vendors, analysts and (i hate to say it) some community “experts”make community technology and programs unnecessarily complex in order to position themselves as a solution. Lean, customer-focused approaches aren’t as opaque or profitable as slow, heavyweight and complex technology and approaches.
2. The Inertia of the Support Community Model
Most online communities in the enterprise side evolved out of support forums, and so did most of the platforms on the market. Many first wave community managers cut their teeth in support and / or forums-based experiences. Most Community Advocate programs were based on the Microsoft MVP model, which was optimized around support use cases. We learned a lot in the industry from the Support Community model, no question. The problem is that Support Communities aren’t sustainable in the long term, and many (including me) are predicting their demise in the next 3-5 years. Support Communities are based on customers doing support work for free. With the rise of knowledge marketplaces and microconsulting services, any intrinsic motivation to volunteer for tech companies is going to quickly wain. If your overarching community strategy is predicated on massive quantities of free labor from your customers, I’m sorry to say the free ride is over.
3. Ignoring Ubiquity of the Mobile Ecosystem
The Mobile Ecosystem is driving massive market change, yet most community vendors are completely ignoring mobile-first strategies. As an example of market change: Business Insider just released a report on mobile messaging apps that shows monthly active users of messaging apps has eclipsed social networks. Benedict Evans of Andreessen Horowitz has a ton of amazing content on framing the mobile ecosystem, and the implications for business.
4. Organizational Silos
Disconnected organizations and teams lead to disconnected customer experiences. A modern community that delivers a connected customer experience requires a level of cross-functional collaboration most organizations don’t understand.
5. Fractured Understanding of the Customer
A fractured approach to customer experience inevitably leads to a fractured understanding of the customer and multiple silos of valuable customer data. An understanding customer needs and behaviors is key to designing the optimum customer community experience and improving performance of Customer Lifecycle Marketing performance.
The net: The current model for developing online communities is overcomplicated and entirely misses the mobile opportunity. Let’s fix it.
A new way to work: Network Thinking
Over the coming weeks I will be expanding on an idea that can help you develop an optimum customer community & community-based marketing strategy. The concept is Network Thinking.
Starting your own Network Thinking is simple. There are five questions at the core of Network Thinking:
- WHO are your customers?
- WHY are they motivated to build relationships with each other?
- WHERE do they want to build relationships with each other?
- HOW do they want to build relationships with each other?
- WHAT value can you provide as a HOST to strengthen and deepen these relationships over time?
Answering these five simple questions forms a succinct and cogent foundation for your next strategic steps. I would encourage you to spend 15 minutes answering the questions as completely as you can, and also noting what barriers prevent you from forming any answers.
The Value of Network Thinking:
Network Thinking will bring a new approach to building relationships between customers, at scale. You will gain immediate clarity around objectives and approach. You will create long-term value in the form of sustained customer relationships, lower customer acquisition costs and expanding your community into the mobile ecosystem.
I am deeply excited by this new apporach and look forward to sharing the concepts, possibilities and customer case examples with you over the coming weeks.
If your would like to discuss how Network Thinking can improve your Online Community initiatives, or would like to get feedback and guidance on your 2016 plans, book a complimentary phone consultation here.
A recent benchmarking report from Demand Metric on Customer Lifecycle Marketing illustrates the impact of aligning marketing efforts around a customer journey model. The report also illustrates a number of blindspots that are derailing Customer Lifecycle Marketing efforts.
The missing ingredient? Community Management.
First, highlights from the report (direct quote):
The analysis of this study’s data provides these key findings:
- The study found that less than 20% of organizations are currently marketing across the entire customer lifecycle.
- Participants spend twice as much of their marketing budgets on acquiring new customers as on retaining existing ones. (Yet most of their revenue comes from existing customers!)
- Almost 90% of the study participants indicate that marketing currently owns the understanding and management of the customer lifecycle.
- Of the lifecycle stages – Awareness, Consideration, Purchase, Retention and Advocacy – Awareness enjoys the greatest clarity of ownership, with marketing owning the stage 88% of the time. Retention is most fragmented, with few organizations defining clear ownership of this stage.
- The Awareness and Consideration stages enjoy “adequate” or “ample” levels of investment for over 70% of study participants. Retention and Advocacy both fall at the “minimal” to “none” level of funding for 55% of study participants.
- The greatest benefit to executing a customer lifecycle marketing strategy is greater customer engagement.
- The greatest challenge to marketing across the customer lifecycle is understanding customer content needs.
- 72% of strategy adherents are experiencing a revenue lift from customer lifecycle marketing.
- Over three-fourths of participants plan to increase their commitment to and investment in customer lifecycle marketing.
Clearly Customer Lifecycle Marketing is incredibly valuable when all stages of the lifecycle are addressed. So what is the problem? Based on my direct experience and years of studying the intersection of marketing and online community, I would assert that building meaningful relationships at scale is still an undeveloped function in the majority of most organizations. Further, as the data from the report shows, the “ownership” for customer retention is scattered among many departments. Add to the mix the eternal debate about “who owns social / community” and things get even more messy.
So what is a modern marketing organization to do? Consider three things:
- Community Drives Customer Lifecycle
A modern definition of online communities expands the location of “community” to be any on or offline touchpoint where customers can meet and form relationships. A modern definition also expands the concept of community management to include any form of relationship building and nurturing. Modern online communities produce a range of value for customers and businesses. Peer to peer support is the classic example, yet modern approaches include a range of deep collaboration on new product development to expansive crowdfunding campaigns – and everything in between. Community can play a valuable role in every stage of the customer lifecycle, and can often be the connective tissue to hold the entire experience together.
- Treat Engagement & Retention as a Community Management Opportunity
The practice of building and nurturing customer relationships is a job modern community managers understand very well. In particular, Community Managers can be very effective as resources in Customer Nurture campaigns during the consideration phase. I had my community management team at Autodesk reboot a nurture campaign that supported a 30 day product trial, and the results were amazing.
Further, Customer Advocacy programs grew (at least partially) out of Community Advocate / MVP programs. It is a relatively straightforward process to scale current Advocacy programs to include different customer types. There is also a massive opportunity to harmonize Influencer programs (which typically look outside of existing communities) with Advocacy programs. These are essentially two sides of the same coin – Advocates have typically been nurtured through a hosted community and Influencers have established their own communities and networks. A modern Community Manager treats these contexts as part of the larger community ecosystem.
Treating engagement and retention as a community management opportunity allows the staff with the skills to manage relationships at scale do what they do best. This is a huge missed opportunity in marketing.
- Get Real About Digital Transformation & Social Business
A modern approach to online community takes into account the entire digital ecosystem, not just single online touchpoints. A modern approach to community management nurtures engagement across the digital ecosystem. So if Community Managers know how to address the key gaps illustrated in the Demand Metric report, what’s the problem? Why isn’t it happening? There are many answers, but one factor that has had a huge negative impact is the trend of Digital Transformation initiatives absorbing (or in some cases, abandoning) Social Business efforts. I expand on (and in some ways, rant about) this in my 2015 recap post. Most Digital Transformation initiatives have focused on technology at the cost of customer engagement. Many Social Leadership teams and organizations have been disbanded or fractured and embedded to the point of being ineffective. Customer Experience initiatives often focus on superficial and in the moment customer engagements at the cost of growing the life long relationship.Bottom Line: We need a new Leadership model that addresses not only the Company : Customer relationship but also the complex network of Customer : Customers : Company relationships.
Netting it out:
- To create successful Customer Lifecycle Marketing initiatives, modern marketers must include online community and community managers.
- Community Managers can help address the current engagement and retention gaps in Customer Lifecycle Marketing programs.
- Organizations need to renew focus and investment in Online Community Leadership to drive growth via Customer Lifecycle Marketing
I am working with a portfolio of clients on evolving their community and marketing programs (lifecycle, influencer & advocacy, community management). I am also kicking off the year by offering a complimentary consultation session (for a limited time & very limited slots). If you would like to get feedback and guidance on your 2016 plans, feel free to register for a consultation here.
Honestly, I wasn’t going to do this. I’m already rolling eyes at all the “prediction” posts. And there are way too many 2015 retrospectives to look back on… but I’m feeling optimistic and inspired! You are taking the time to read this – THANK YOU! I have had an incredible amount of support for my first year of Structure3C. Thank you for being part of it.
This is a long-ish post – the short version is a list of personal highlights from 2015, and a look ahead to 3 big ideas and aspirations for 2016.
A Look back at the first year of Structure3C
Thank you for letting me take a moment to reflect on a few key accomplishments from this year.
- Launching Structure3C on February 4, 2015 to help brands create successful customer communities and crowdsourcing initiatives
- Chairing the inaugural Collaborative Economy conference in San Francisco in March
- Conducting the first research study on Brands & The Collaborative Economy – exploring a range of organizations level of knowledge, interest, priority and current activities in the Collaborative Economy
- Having a number of prominent speaking engagements, including SxSWi, Social Business Forum 2015 (Milan), The Silicon Valley Boomer Business Summit and Crowdsourcing Week Europe (Brussels)
- Helping a growing portfolio of brand and startup clients with briefings, crowdsourcing strategy, online community development and product design
- Being interviewed by Virgin Entrepreneur on Crowdsourcing
- Holding the closing workshop at the Crowd Companies 2015 Main Event in SF – (you can download my custom workbook from the event)
- Being honored as one of the inaugural A. Barry Rand Fellows for the Life Reimagined Institute
- And on a personal note: I made a commitment to my family to be present more throughout the year – one lagging indicator of success is the number of pancakes and pieces of french toast made in 2015 numbers just shy of 1,000! (disclaimer: back of the napkin calculation)
3 Big Ideas for 2016:
1.) Beyond “Digital Transformation”
In 2015, it seemed like Digital Transformation ate the business world. Almost overnight, the big consultancies dropped “Social Business” and began to sell Digital Transformation strategies. Thought leaders and former champions of social published articles and books about establishing, then disrupting “Digital Business”. Former Social Centers of Excellence were abandoned or repurposed for the “new” digital business journey.
In some ways, this is completely logical. Big consultancies need to keep clients anxious and their armies of consultants employed. Thought leaders need a constant stream of new terms, concepts and frames to stay relevant and top of mind. Executives need to frame annual objectives in ways that are novel and show progress year over year.
And, let’s face it: Social, Community, Customer Collaboration are all hard. Really hard.
Obviously, technology plays a critical role in modern business. The problem with many Digital Transformation efforts is a hyperfocus on the technology at the cost strategy and customer relationships.
Further, the definition of “Social Business” was always somewhat nebulous, and the internal culture shift and alignment needed to be successful was an arduous task. Pursuing a primarily technology-driven agenda likely seems more attainable, and “Digital” is an easier sell – both the perceived value and anticipated results.
What is lost in the shift from social to digital is the opportunity to fully realize the business value of connected customer relationships at scale. Realized specifically through strategies based on networks, communities and deep collaboration. Sound nebulous? I’ve shaped and seen first hand the value of social and community in the form of increased direct revenue, increased loyalty, crowd driven products and early market dominance based on building communities in parallel with products. Examples: The quantified value of Dell’s IdeaStorm was in the hundred’s of millions of dollars, Dell’s TechCenter community had billions of dollars in impact on Large Enterprise sales, Autodesk’s support community saves the company millions of dollars a year… I could go on.
2.) Digital / Social Business reframed as Business, Networked
Based on my experience building online communities and collaborative experiences, as well as research I’ve conducted, I’m convinced that a new and comprehensive approach to online communities is the way forward.
An approach where:
- What we thought of as “social” is really the networked marketplace
- Your market is synonymous with your crowd
- Online communities build lasting relationships amongst your customers, prospects, employees and partners and
- Collaboration looks like a true partnership with customers, not an internal social network no one really uses.
In order to begin exploring business opportunities in the networked economy, businesses need to shift their mindset to think about markets as networks. Their total addressable market(s), connected via platforms & social networks.
There are three important contexts to think about in the Network Marketplace:
- Crowd: A group within a Market Network that has:
- A shared interest or goal
- The ability and assets to participate in a shared marketplace, task or activity via common platforms
- Community A connected & hosted group within a Market Network that has:
- 1 or more shared interests or goals, leading to shared identity & purpose
- The ability, motivation and assets to work towards a common purpose over time
- A host with intention to support & manage community over time
- Collaborative Organization Collaboration amongst organizations, partners and customers essentially functioning as one organization:
- Shared IP & Common resources
- Shared vision of activities and outcomes
- Shared risks and equitable outcomes
3.) Radical New Leadership
To truly make progress in the evolving online community strategy we need new leadership, and evolved (not incremental) vision. This requires a shift from quarterly-driven decision making by businesses and a “sell what we have” mentality from our collective social vendors. Specifically:
- A new function that owns customer experience across every touchpoint – and further – owns developing the 1:Many relationships in the market network, not just 1:1
- A new Executive to lead this function
- Integration of platforms, systems and customer data that create internal efficiencies, better customer experiences, and put the customer in control of their experience, relationships and data
- A new point of view on value, and specifically, the value of customer engagement and participation. The days of customers supporting other customers without compensation are coming to an end.
- We need a bolder vision for online community platforms and social media & network tools. Platforms now are: 1) optimized around specific functions, like peer to peer support 2) are incredibly hard to customize and 3) are incredibly hard to integrate. We need better from you.
- Reign in sales-driven organizations that over-promise and under-deliver on community quality and outcomes.
- We need vendors to come together on feature & data standards and interoperability. Just to pick a specific example: The current disconnect between CRM, Marketing Automation and Community Platforms (even from the SAME vendor) is unbelievable. Invest in fixing it.
- You need something new to talk about and sell. I get it. I humbly ask:
- Connect the dots between your concepts, especially when retiring an old concept for a new one.
- Talk to your peers in the industry when selling new ideas so clients aren’t dealing with 10 flavors of the same burning platform concept.
- Show your source data when you have it.
- Attribution is appreciated. Especially for concepts you are essentially recycling.
- Show you really care about the future of the industry by cooperating on standard definitions, benchmarks and training
- Try to coordinate conference data and overarching themes
- When collecting practice data you intend to use for consulting or products, please provide a disclaimer at point of collection.
Do you agree? What would you add to this list?
With that said, 2016 is shaping up to be even more fun.
A preview includes:
- An upcoming announcement for a series of Crowd Economy “Rapid Orientation Workshops”
- Select speaking engagements focused on describing a Modern Approach to Online Community Building by developing Market Networks
- Ongoing research into how Brands continue to evolve their Crowd and Community business strategies
- An expanded set of consulting offerings, including modules for leadership & team development, value / ROI analysis and scorecard development.
Should we talk? I’m offering a limited number of free introductory consultations (via phone). I’d love to learn more about your community & crowd plans for 2016, and I promise your will take away new ideas from our call.
In the spirit of the New Year, I wish you a peaceful and epic 2016. Thank you for helping make Structure3C ‘s first year a success!
As the United States prepares to celebrate Thanksgiving this week, the team at Structure3C is thankful for another great week of growth and development in the #CollaborativeEconomy. We also have some exciting news to share: Bill Johnston (Founder of Structure3C) was nominated in the first cohort of Fellows for the Life Reimagined Institute. Read the full news release here.
1. “Uber Is Not the Future of Work” via The Atlantic – “The rise of Uber has convinced many pundits, economists, and policymakers that freelancing via digital platforms is becoming increasingly important to Americans’ livelihood.” – http://goo.gl/jfnDJH
2. “How Segment Models Growth for Two-Sided Marketplaces” via Segment – “Marketplaces are awesome because, without them, buyers and sellers face complex, risky, and time-consuming transactions.” – https://goo.gl/1vfyjF
3. “Airbnb Banishes NY Superhosts” via rented. – “Airbnb “superhosts” awoke on November 12th to news that their listings had been removed and all of their future reservations had been cancelled.” – http://goo.gl/vGQ23p
4. “How to Start Using the Sharing Economy for Your Events” via Successful Meetings – “Because they’re convenient and affordable, service like Airbnb and Uber are growing more popular by the day.” – http://goo.gl/q98Iy3
5. “How to Market Collaborative Consumption Businesses” via Business 2 Community – “Collaborative consumption gives people the temporary benefits of ownership while reducing personal burden and, in many cases, lowering environmental impact. – http://goo.gl/jeEV4L
6. “A sharing economy for governance? 3 ingredients for sustainable cities” via GreenBiz – “When governments consult cities in the development of national policies and openly work with them to localize legislation, it creates a sharing economy for governance.” – https://goo.gl/fuQOgv
7. “There’s a simple step Airbnb and Uber can take to make the sharing economy safer” via Quartz – “A regulatory system developed over decades oversees hotel companies, taxi services and retailers, attempting to protect the health, safety and security of the people who use those services. But these rules and regulations largely do not apply in the sharing economy.” – http://goo.gl/P2c0ug
8. “Is the Gig Economy Good for Workers?” via Triple Pundit – “The growth of freelance, contract, consulting and gig workers in recent years has caused policy makers to re-evaluate how workers and wages are counted in state and national employment figures.” – http://goo.gl/TaMikA
9. “Why Digital Marketing Should Join the Sharing Economy” via Marketing Land – “At its core, the sharing economy is about fostering collaboration to turn underutilized resources into new revenue streams.” – http://goo.gl/I6uiLV
10. “Uber’s chief adviser on benefits of the sharing economy” via CNBC – “Part of our challenge is to sit down with the government and explain what’s on the other side of this.” – http://goo.gl/whTKCR
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I created the Collaborative Economy Kickstart as a companion to our longer-form workshops. In 2.5 hours, participants will get a briefing on the Collaborative Economy, a facilitated exercise to guide ideation and action planning and 30 minutes of group coaching to begin their journey in the Collaborative Economy.
In the first hour Participants will be given an overview of the Collaborative Economy, including:
- The key elements of the Collaborative Economy;
- The three C’s of a Crowd-powered business: Crowd, Community and Collaborative Organization;
- Case studies and examples of Crowd-powered businesses;
- A method for identifying opportunities for, and threats to, a Participant’s business;
- A framework for developing a Crowd-powered business model.
During the second hour Participants will then be guided through an Ideation & Action Planning exercise that helps them:
- Explore the dimensions of the Collaborative Economy that are relevant to their business and market;
- Assess the biggest threats and opportunities;
- Learn to do an asset inventory;
- Explore opportunities via the Ideation Canvas tool;
- Create an action plan to more forward immediately after the session.
The workshop will end with 30 minutes of group coaching to explore topics that have surfaced during the overview and action planning sessions.
Participants will leave the session with a better understanding of the Collaborative Economy, an action plan draft and exclusive templates to use within their organization to kickstart their Collaborative Economy journey.
Your Weekly #CollabEcon Roundup for the Week Ending October 30
We hope everyone is geared up for an extra #spooky Halloween weekend. Uber’s latest valuation and funding round might be scary (actually, terrifying!) We’ll get you up to speed on this week’s best #CollabEcon articles. Just settle in with some trick or treat goodies and read the best the web has to offer this week:
1. “Can the Commission collaborate on the collaborative economy?” via Science|Business – “At a Brussels news conference, top EU officials had different perspectives on taxi-sharing and other aspects of the ‘sharing’ economy.” – https://goo.gl/ioy5jj
2. “Developing the Sharing Economy” via Economy Watch – “For any policy in this area to be effective, it needs to grapple with and challenge some underlying assumptions about the ‘sharing economy’ and its associated rhetoric.” – http://goo.gl/ylbgbY
3. “Interview with Uber: Creating a Frictionless Experience That Spawned A Generation of Copycats” via PSFK – “The Uber experience has also impacted consumer expectations across industries: if people can call a driver, organize a ride within minutes and pay for their trip at the tap of a button, why shouldn’t all service brands apply this same methodology?” – http://goo.gl/QSdl07
4. “Today’s sharing economy will shape our future” via The Daily Northwestern – “This recent unprecedented rise in the so-called ‘sharing economy’ is not just defining our careers, but also actively reshaping our daily lives and even our mental approach toward consumption.” – http://goo.gl/WWNuKN
5. “Following Uber’s Success, Copycats Rush To Carve Out Niches” via NewsFactor – “Uber has become a hip shorthand for efficient transportation and seamless commerce, a digital darling that turns your smartphone into a matchmaker between you and your ride home.” – http://goo.gl/PlLF1g
6. “FIR Interview: Jeremiah Owyang On Competing In The Collaborative Economy” via FIR Podcast Network – “The collaborative (or sharing) economy is heating up, with dramatic increases in both the number of startups that employ the model and the number of consumers who use them.” – http://goo.gl/DsV8Ha
7. “A Revolt Is Coming for Cloud Labor” via The WorldPost – “We are on the cusp of a revolution in the way work and labor are done.” – http://goo.gl/wucpNX
8. “A worldwide paradigm shift from ‘sharing’ to ‘collaborative’ economy?” via LabGov– “Most importantly, it’s only if and when each and all of us gets directly involved in such a process that we together can make a difference – suggesting a more than necessary shift toward a more participatory and collaborative economy.” – http://goo.gl/MlcIiY
9. “The Sharing Economy Doesn’t Need to Be Full of Monopolies” via The Atlantic – “Without checks on their power from consumers, these billion-dollar companies are beholden only to government regulation—and even then, sometimes they shrug that off.” – http://goo.gl/GvvLqC
10. “Corporate Travel Managers Don’t Trust the Sharing Economy” via Skift – “It’s shocking that more corporate travel managers haven’t embraced mobile technology and the sharing economy as ways to reduce costs and gain more accurate data on the habits of their clients.” – http://goo.gl/JCw0n6
Bonus: Bill spoke at Crowdsourcing Week Europe last week in Brussels (the conference was amazing). Presentations from all the sessions have been uploaded here. Do yourself a favor and spend some time with these slides!
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Last week my friends and colleagues at The Community Roundtable released their annual “State of Community Management” report. This is the fifth year for the report, and the Roundtable team surveyed over 200 global organizations.
Key Points & Findings include:
- An overview of the excellent Community Maturity model, as well as case studies on ho Microsoft and Johnson Controls have extended the model for internal use.
- Organizations are still struggling to show ROI (less than 50% in Best In Class organizations).
- Community Management, as a role and discipline, needs more internal investment and support.
- Advocacy program need to mature beyond the “MVP Model”.
- Findings on programming to boost community engagement.
You can view the executive summary here:
I recommend taking the time to download and read the full report.
While at Forum One, I published a similar report in 2008. It’s interesting to note the places where the understanding of the practices and discipline of Community Management have advanced, and where progress seems slower (ROI, Organizational Structure).
I’d love to hear your thoughts and comments! What is your take on the State of Community Management?