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June 17, 2009

Want to Increase Word-of-Mouth Marketing by 35%? Start a community.

by deirdrewalsh

I read an interesting study today that said that Word of Mouth, Insights, Customer Loyalty Biggest Benefits of Online Communities.

According to Beeline Labs, Deloitte, and the Society for New Communications Research, the greatest value of online communities is increasing word of mouth (35%), increasing brand awareness (28%), bringing new ideas into the organization faster (24%) and increasing customer loyalty (24%).  I definetly see all of these at National Instruments.

“The 2008 Tribalization of Business” study found that the greatest obstacles to making a community work are not technology-related or getting funding, but getting people involved in the community (51%), finding enough time to manage the community (45%), and attracting people to the community (34%). Interestingly, management was not cited as an obstacle either. Just 9% of the respondents said that their management was unwilling to share with community members.

“At conferences around the world we’ve heard marketers say that their biggest challenge is executives’ resistance because they fear losing control,” said Lois Kelly, a Beeline Labs partner. “But this research indicates that this may not be as big of an issue as marketers think. Clearly the bigger challenge is focusing the community around a purpose that people want to contribute to and be involved with – and devoting the right resources to promote and support the community.”

What Contributes Most to Effectiveness: People Giving and Getting Help
The features cited as contributing most to community effectiveness were:
• Ability for community members to connect with other like-minded people: 54%
• Ability for members to help others: 43%
• The community is focused around a hot topic or issue: 41%
• Quality of the community manager/community management team: 33%

Measurement: Mix of Hard and Soft Measures, Business and Analytics – and Disconnects
Just as most marketers use diverse measures to assess overall marketing effectiveness, so is there diversity in how they are measuring the effectiveness of online communities. The top business measures being used are:
• Greater awareness: 49%
• Number of new ideas from the community: 41%
• More referrals: 28%
• Increased sales attributable to the community: 26%
The top analytic measures included:
• Number of visitors: 63%
• Number of “active” users: 58%
• How often people post/comment: 57%
• Number of registered users: 49%
• How often people visit: 45%

“One interesting discovery was the apparent inconsistency between what organizations set as goals and what they actually measure,” commented Francois Gossieaux, a partner at Beeline Labs, and Senior Fellow with the Society for New Communications Research. “We also noticed mismatches between what respondents set as goals and the investments they actually make, as well as between their goals and the talent that they deploy against the community initiatives.”

Key Takeaways from the Survey:
• A majority of community efforts are more focused on improving the top line revenue than reducing costs.
• Communications-related benefits seem to dominate the objectives, and are achieved most successfully.
• There is generally a mismatch between the web stats that companies track and the stated goals for the communities.

When asked what their most important piece of advice is for others creating online communities, survey participants’ advice focused on eight areas:
1. Start with the end in mind: “Start with a business strategy, defining carefully what you want to accomplish through the community.” “Invest most in the area that services your key business objective.” “Be clear about the purpose of the community.”
2. Focus on the value to the members: “Make sure you deliver real, special, unique, obvious value to the core group you’re hoping to attract.” “Build the community around existing passion groups.” “The core of the community needs to be of high value or interest to people, a focus worth contributing to.” “Get insight into what motivates members to join the community; we found a different motivation than we hypothesized.”
3. Don’t start with the technology: “Too often people get drunk with Web 2.0 tool excitement and then try to push their business and customer goals into the wrong tool.”
4. Keep it simple and intuitive: “Focus on the least common denominator first. Keep it easy to navigate with simple tools to use.” “People are busy; they need information in brief, easy-to-scan bits they can quickly choose what is interesting to them and go right to it.”
5. Keep it fresh and active: “Keep activity levels up, constantly add new content.” “Think of how to create ‘events’ – what can you do to excite people and get them to share in the community.” “Update regularly, find topics for discussion.” “Content is king.”
6. Have dynamic community leaders: “Make sure you devote enough time to managing the community; letting it fester is worse than not having it in the first place.” “Participate but do not try to control. The community belongs to the people, not you.”
7. Think through who to involve – or not. “ Get commitment from top management and communicate, communicate, communicate.” “Get Legal and PR to buy-in and help on design, but keep them out of active management.”
8. Get a passionate core of participants active before launching: “Make sure you have a committed core of passionate users before you launch.” “You must have a critical number of high-quality participants to get the momentum going.” “Beta test and seed before launch.”

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