Building The Business Case For A Branded Online Community

L E A D E R NETWORKS

Copyright © 2014 Leader Networks, LLC 1

Building Your Business Case For A Branded Online

Community

Thursday, October 16, 2014Vanessa DiMauro, CEO


Copyright © 2014 Leader Networks, LLC

About Leader Networks

Leader Networks is a strategic research and consulting firm that helps clients develop social business strategies, create online communities and lead social media marketing programs.

Social Business Operations & Training: ROI,

integrated marketing

programs, online community operations

Social Business Research: tracking,

community health check, and

user validation

Social Strategy Development for

online communities and

social media marketing

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http://www.leadernetworks.com/



Leader Networks Clients

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Research Methods

Fernado Castagnari, Manager, Training & Communications, Mars Petcare

J.J. Levett, Director,Community Programs, CA Technologies

Jessica McDouall, Director, Customer Operations, SPS Commerce

Jennifer McClure, Vice President, Digital & Social Media, Thomson Reuters

Claire Bovill, Sales Business Development Manager, Cisco

Scott Wilder, Global Nation Builder: Corporate Marketing, Head of Community, User Groups and Ecosystem Engagement at Marketo

Steve Roth, Independent Contractor, SchoolDude

Robin Carey, CEO Social Media Today

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This report draws on decades of online community best practice and implementation experience, including in-depth interviews with eight successful online community leaders with real-world examples to back up their suggestions and advice.



The Business Case Imperative

Online communities have become a strategic necessity for many organizations.

Well developed business plans for community help manage expectations and fuel buy-in.

Successful communities start with a strong strategic foundation.

A business case is the official proposal process -- usually resulting in a document of some type -- for securing an internal commitment from a business entity to create a branded online community.

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Six Steps to Building a Business Case for Community

Assemble executive sponsors

Identify business needs

Identify audience needs and core members

Map business & audience needs to community features

Define and measure success

Prepare a budget

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Step 1: Assemble Executive Sponsors

Executive involvement has much to do with how well communities influence revenue.

Two-thirds of organizations with highly involved executives are

seeing their communities influence 16% or more of the organizations’

total revenue.

Source: “Online Communities: Driving Customer Engagement & Influencing Revenue” (Demand Metric, September 2014)

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Assembling Executive & Cross Functional Stakeholders

Ways To Engage

Focus on the strategic goals of the company

Identify who has the most pressing needs that community can help solve and accelerate

Frame the opportunity in business terms

Answer the question “what happens if we don’t build community?”

Gather examples of community success

Executive sponsors can be found throughout the organization (e.g. marketing, customer care, strategy, communications, HR, product development)

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After I sold the idea of community internally, I needed to engage the potential members. The first step was to showcase the community concept at a sales conference to the potential audience and engage them regarding what they wanted in the future. My objective was to help them feel part of the project. Then I met with distributors and showed them how I could get information and training to them and give them what they need, as well as a space for them to share information. The message to them was different than the one I told to sales people because I focused on their business needs. -- Fernando Castagnari, Mars Petcare

– Fernado Castagnari Manager, Training and Communications, Mars Petcare Brazil10



STEP 2: IDENTIFY A BUSINESS NEED

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Identify A Business Need

Many large-scale online community success stories begin by solving a single business problem, and evolved into more wide-ranging solutions which delivered outcomes not possible prior to establishing the community.

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Example Business Needs To Fuel Community Business Case

Customer Service & Support

• Cost savings from contact reduction

Increase self-service

• Solve middle-of-the-night problems

Achieve scale and efficiencies

• Scale collaboration and information sharing.

Greater customer intimacy

• Leads to increased customer satisfaction

Gather customer ideas to increase speed to market

• Fuels innovation & new product adoption

Sales support and outreach

• Nurture leads through engagement

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STEP 3: IDENTIFY

AUDIENCE NEEDS & CORE MEMBERS

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What business needs from community What members need from community

Increased sales leadsInformation about new products and

services

Thought leadership amplificationLearning and sharing best practices

from experts

New (patentable) ideasSharing feedback and ideas with

product development

A birds-eye-view on customer

experiencesPeer-peer discussions (forums)

Fast customer satisfaction feedbackProduct and service ratings for

purchase decisions

Reduce call center traffic Get better support help more quickly

Map Business Need to Audience Need

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Who the community will

serve informs the content and engagement

opportunities.

Start with a sharp focus on the specific audiences or users who will be most closely aligned with the business needs and issues driving the community initiative. Consider the following:

• Who are your most important customers, partners or stakeholders?

• How would you describe individuals who would make the best members?

• Can they be identified by customer segments, geographies, titles or specific activities within your organization's lines of business?

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What members need from

Community

What business

needs to get from

Community

Features

“I put together a plan of use cases, features, personas, etc. to determine which content should be open for lurkers, which content should be open for people that authenticate but are not customers and which content should be closed off to just customers.”

Step 4: Mapping Member and Business Needs to

Community Features

Scott K. Wilder, Marketo

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Map General Business & Audience Needs to Specific Business Requirements & Community Features

Specific Feature

Capability

• Ability to ask a questions or share ideas

• Forums or content co-creation (e.g. wikis)

Specific Business

Requirement

• Reduce load on internal customer service

• Get answers to solve a problem

General Member &

Business Need

Identification

• (Business Need) Reduce call center traffic

• (Member Need) Get better support help more quickly

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Create A Business Requirements & Features Map

Business Need Member Need Activity/Requirement Feature/Function

Reduce load on internal

customer service

Get answers to solve a

problem

Ability to ask a

questions or share

ideas

Forums or content co-

creation (e.g. wikis)

Increase customer

loyalty & engagement

Competition for

recognition and fun

Inspire participation/

increase engagement

Gamification and

leaderboards

Expand online and

offline prospecting,

selling and training

Learn about new

products, tech info and

training

Support in-person

conferences and

webinars

Online booking

capabilities; integrated

video/screen sharing

services

Reduce call center and

other support system

costs per incident

Get faster responses,

self-service, avoid

phone tag, 24x7

availability

Reduce support

contacts; improve

customer support

FAQs, forums, wikis,

pay-per-answer, online

troubleshooter apps

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STEP 5: Measure What Matters

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• To demonstrate the impact of community on your organization, align community operations and measures with the organization's business goals and objectives.

• Many "measurable" metrics (# of members, time on site, # of posts) are too far removed from the business strategy and member needs to be meaningful.

• The real value of community can be found in understanding both the business definition of success and the members’ definition of success, each working to support the other.

A Word On Metrics:

Consider increased customer satisfaction measures, higher NPS scores, improved customer loyalty, more rapid customer service resolution, greater input from customers on product and service enhancements

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Metrics to Measures: How to Track Business Outcomes

Example Success Metric Measures

Increase sales # leads generated by community

# sales made through community store (if

applicable)

# of product or service brochures downloaded

on community

Event attendance # of event registrations through the community

Customer questions about how to

use a product or service

Contact reduction %

# of questions asked online

% of questions resolved online

Learn from customers (e.g. feedback

into product development)

# of new ideas/requests

% of ideas submitted that are investigated

further

Customer retention / satisfaction % increase in NPS score

% of customers who are community members

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“Some examples of metrics we track at SPS Commerce include Customer Engagement (measured by number of members and traffic on the community), Scalability (measured by contact reduction - % of viewed topics in a 'completed' status), and CSAT - measured monthly (result of establishing a self-service channel providing customers 24x7 access to training materials and information).”

Jessica McDouall, Director, Customer Operations, SPS Commerce

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STEP 6: Prepare A Budget

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Executive Expectations For A Community Budget

• Your budget should include both the cost and revenue sides of the ledger.

• You will probably be able to forecast costs with greater confidence than revenues.

• Executive sponsors and community stakeholders may want to see a two- or three-year outlook, but the longer the time horizon, the greater the degree of uncertainty.

• One strategy for managing senior leadership expectations is to prepare a budget using high, medium and low estimates for both costs and revenues.

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COSTS Category Estimate

Strategy & support costs

Planning (e.g. internal assessment of needs)

Consulting (e.g. strategic guidance, recommendations)

Preliminary research (e.g. competitive analysis)

Legal (e.g. user agreement, privacy, employee policy)

Software platform

Own or subscribe licenses

Hosting fees

Initial implementation fees

Service and support fees (e.g. training)

Ancillary products i.e. analytics, member management tools

Design & development

Community design treatment & branding

Custom programming

Ongoing enhancements

Member acquisition, marketing & support

Member acquisition programs / assets

Online and off-line outreach programs

Member incentives

Content

Repurposing existing assets

New content creation

Licensing fees for outside content (if applicable)

Staffing26



Direct

RevenuesCategory Estimate

In-community transactions (pay-per-download, pay-per-answer, pay-to-learn,

lead generation, membership fees)

Advertising & sponsorships (co-branding, partner or event marketing, co-

sponsorships)

Cost substitution (lower overall cost per customer served, per-incident cost

differential vs. other channels)

Reduced cost (cost per service incident; self-service for support needs, product

information, sales inquiries)

Indirect

Revenues

Increased customer satisfaction (faster response, reduced wait times, more

knowledgeable responses from community member collaboration)

Increased brand awareness (unsolicited brand mentions externally, positive

brand comparisons on 3rd party sites, increased inquiry traffic across all

channels)

Increased prospect and sales leads (referrals, community mentions on 3rd party

sites, word-of-mouth via community members)

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The Net/Net for Building A Business Case For Online Community

Engage your executive sponsors on business terms

Identify business problems or opportunities that online community can help solve

Carefully identify your audience segments

Understand what the future members want from community

Map the business and member needs to the community features Determine your and your members’ definitions of success

Create a budget that includes costs and revenue potential

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Copyright © 2014 Leader Networks, LLC 29