2008 Tribalization Of Business Study Final

2008 TRIBALIZATION OF BUSINESS STUDY

HOW TO ACHIEVE TRANSFORMATIONAL CHANGETHROUGH COMMUNITIES AND SOCIAL NETWORKS

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A STUDY PRODUCED BY:

Deloitte (www.deloitte.com) 

Beeline Labs (www.beelinelabs.com)

Society for New Communications Research (www.sncr.org) 

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THE FINDINGS IN THIS PRESENTATION ARE BASED ON SURVEYS OF OVER 140 COMPANY OFFICIALS

WHO ACTIVELY USE COMMUNITIES

THIS PRESENTATION REPRESENTS THE BEELINE LABS INTERPRETATION OF THE QUANTITATIVE AND

QUALITATIVE PORTIONS OF THE STUDY

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OVERVIEW:

FIRST ACT: UNDERSTANDING THE DYNAMICS AT WORK WITHIN COMMUNITIES

SECOND ACT:A QUICK OVERVIEW OF THE FINDINGS OF THE STUDY

THIRD ACT:THE MAJOR TAKEAWAYS FROM THE STUDY

FINAL ACT:SOME PREDICTIONS ABOUT THE IMPACT OF COMMUNITIES

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FIRST ACT: UNDERSTANDING THE DYNAMICS AT WORK WITHIN COMMUNITIES

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TRIBALISM IS THE VERY FIRST SOCIAL SYSTEM THAT HUMAN BEINGS EVER

LIVED IN, AND IT HAS LASTED MUCH LONGER THAN ANY OTHER KIND OF

SOCIETY TO DATE. (WIKIPEDIA)

WHAT’S THIS TRIBAL THING ALL ABOUT?

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SOCIAL MEDIA HAPPENED…

A PLATFORM AND CULTURE OF PARTICIPATION HAS EMERGED – GIVING

POWER TO ALL YOUR EMPLOYEES, CUSTOMERS AND PROSPECTS TO BEHAVE

TRIBALLY AGAIN

WHY NOW?

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THE MOTIVATIONS ALLOWING THIS TO WORK…

PEOPLE WANT TO CONNECT WITH PEOPLE

PEOPLE WANT TO HELP AND BE HELPED

PEOPLE OPERATE EITHER IN A SOCIAL FRAMEWORK

OR A MARKET FRAMEWORK

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THE MORE CONTENT YOU HAVE THE MORE MEMBERS YOU WILL GET.

THE MOREMEMBERS YOU HAVE THE MORE CONTENT YOU WILL GET.

THE BETTER YOU MATCH CONTENT ANDMEMBERS TOMEMBER PROFILES THE MORE

MEMBERS AND CONTENT YOU WILL GET.

THE EASIER IT IS TO DO TRANSACTIONS THE MOREMEMBERS YOU WILL ATTRACT.

UNDERSTANDING THE DRIVING FORCES OF COMMUNITIES

THOSE PILLARS CREATE THE DYNAMICS OF INCREASING RETURNS WHICH HELP

COMMUNITIES DELIVER GAME CHANGING RESULTS9

AND OF COURSE…

THE TECHNOLOGY INFRASTRUCTURE OF THE COMMUNITY IS IMPORTANT

THE SOCIAL INFRASTRUCTURE OF THE COMMUNITY IS MORE IMPORTANT

BUT THEY ARE NOT AFFECTING THE ECONOMICS OF INCREASING RETURNS

THAT DELIVER GAME CHANGING RESULTS

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SECOND ACT:A QUICK OVERVIEW OF THE FINDINGS OF THE STUDY

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TOP USAGE SCENARIOS:

New Product Development

Customer serviceIdea generation

Market research Developer relations

Amplifying Word of Mouth

Employee communications

General Marketing

Reputation management Product testing

Public relationsLONG TAIL SALES

CANARY IN THE COALMINE

Co‐innovation

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TOP BUSINESS OBJECTIVES:

Generate word of mouth

Bring outside ideas into the organization faster

Increase customer loyalty

Increase brand awareness

Improve PR effectiveness

Reduce market research costs

Decrease customer acquisition costReduce customer support cost

Increase new product success ratios

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WHY ARE COMPANIES SETTING UP COMMUNITIES?

SPEED OF INNOVATION – EXTENDING THE EDGES OF THE ORGANIZATION

LEARNING ORGANIZATION

REDUCING COST

BUILDING TRUSTED RELATIONS

TRANSFORMATIONAL POWER AND GAME‐CHANGING NATURE OF COMMUNITIES

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WHO’S IN CHARGE?

MARKETING

Sales

Customer serviceFinance

Public Relations

Employee communications

IT

Product development

R&D

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0%

10%

20%

30%

40%

50%

60%

70%

Measuring progress and success – web analytics

DISCONNECT:Not in support of any goal…

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0%

10%

20%

30%

40%

50%

60%

Measuring progress and success ‐ business measures

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MEASURING PROGRESS AND SUCCESS – QUALITATIVE

Activity levels

Tonality

Impact on salesImpact on cost

Participation rate

Sustainability

Software downloads

engagement

Amount of learning

Anecdotal stories 

Growth

Sentiment

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0%

10%

20%

30%

40%

50%

60%

Community features contributing the most to effectiveness

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0%

10%

20%

30%

40%

50%

60%

The biggest obstacles to making communities work

Could lead to prematureshutdown of community 20

37%

17%

26%

20%

How long has your community been running?

Less than six months

Six months to one year

One to three years

More than three years

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34%

27%

13%

8%

8%

9%

< 100

101 ‐ 500

501 ‐1,000

1,001 ‐ 5,000

5,001 ‐ 10,000

More than 10,000

How many active members do you have?

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34%

27%

13%

8%

8%

9%

None: part time job

One

2 ‐ 5

6 ‐ 10

More than 10

Other

How many full time people manage this community?

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58%

24%

8%

5%

6%

< $50,000

$50,001 ‐ $200,000

$200,001 ‐ $500,000

$500,001 ‐ $1 million

More than $1 million

What is the approximate annual operating budget?

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52%44%

4%

Over the next 12 months will your investment in the community:

Increase

Stay the same

Decrease

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THIRD ACT:THE MAJOR TAKEAWAYS FROM THE STUDY

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TAKEAWAY #1: COMMUNITIES ARE ABOUT DELIVERING GAME‐CHANGING RESULTS

COMMUNITIES CAN INCREASE REVENUE PER CUSTOMER DRAMATICALLY –I.E., 50%

COMMUNITIES WILL INCREASE PRODUCT INTRODUCTION SUCCESS RATIOS

COMMUNITIES AMPLIFY EVERYTHING YOU DO –INCREASING EFFECTIVENESS AND DECREASING COSTS

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TAKEAWAY #2: THE RISE OF THE CMO 2.0?

COMMUNITIES SHOULD BE AN IMPORTANT PART OF THE CMO’S TOOLSET(BUT FOR MANY LARGE COMPANIES – THERE IS AN UNDER‐INVESTMENT AND SCALE PROBLEM)

COMMUNITIES SHOULD EVOLVE THE ROLE OF THE CMO INTO

CHIEF COMMUNITY OFFICER(BUT THAT WILL REQUIRE DRASTIC CHANGES IN ATTITUDE AND APPROACH TO MARKETING)

IF DONE PROPERLY, COMMUNITIES WILL TRANSFORM THE WAY MARKETING WORKS(REDUCED COSTS, IMPROVED EFFECTIVENESS, NEW OPPORTUNITIES)

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TAKEAWAY #3: THE NEED FOR NEW MANAGEMENT THINKING

MISMATCH BETWEEN COMMUNITY GOALS AND ASSOCIATED INVESTMENTS

MAJOR GAPS BETWEEN COMMUNITY GOALS AND WHAT IS BEING MEASURED

COMMUNITIES HAVE TO COMBINE WITH MAJOR TALENT INITIATIVES

COMMUNITIES WILL TRANSFORM MOST BUSINESS PROCESSES

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TAKEAWAY #3.5: THE WORST PRACTICES ENJOY WIDE ADOPTION

THE BUILD IT AND THEY WILL COME (AGAIN) FALLACY

THE LET’S KEEP IT SMALL SO IT DOESN’T MOVE THE NEEDLE PHENOMENON

THE NOT INVENTED HERE SYNDROME

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FINAL ACT:SOME PREDICTIONS ABOUT THE IMPACT OF COMMUNITIES

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SOME EARLY PREDICTIONS: 

MANY COMMUNITY INITIATIVES WILL CONTINUE TO FAIL

COMMUNITIES WILL EVENTUALLY TRANSFORM THE ROLE OF THE CMO

EARLY ADOPTERS WILL FORCE INDUSTRY‐WIDE CHANGES

COMPANIES WILL FIND OUT HOW TO BUILD PREDICTABLE COMMUNITIES

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QUESTIONS?

Contacts:

Francois Gossieaux, Beeline Labs:francois@beelinelabs.com

Ed Moran, Deloitte:emoran@deloitte.com

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