How to sell the vision & value of online community

HOW TO SELL THE VISION & VALUE OF

ONLINE COMMUNITY

October 30, 2013

TODAY’S PANELISTS: •  Vanessa DiMauro, CEO and Managing Partner, Leader

Networks

•  Lisa Sacquitne, Manager of Non-Integrated Services, SPS Commerce

•  Jessica McDouall, Senior Manager of Non-Integrated

Services, SPS Commerce

•  Robert Miller, President & CEO, IntelliQ Research & Strategy

L E A D E R NETWORKS

Copyright © 2013 Leader Networks, LLC

The Online Community Landscape

•  Gartner predicts 70% of sponsored online communiDes will fail by 2014 fail aFer generaDng liGle or no return for some of the world's largest companies. –  Failure to establish a business case –  Fail to gain tracDon with engagement or member growth –  Fail to meet member expectaDons –  Fail to achieve measureable ROI

•  But success is possible and offers great returns! –  Forrester Research calculates that a 10-‐percentage-‐point improvement in a

company’s customer experience score can translate into more than $1 billion in revenue.

-‐ Success oFen found in cost reducDon, increased customer retenDon, more producDve partner relaDons, new ideas generated, beGer use of the products and services offered.

HGp://www.leadernetworks.com @vdimauro



Achieving A Higher Success Rate With Community

Many companies are generaDng significant returns from their online communiDes. Cost reduc>on •  Autodesk’s online customer community has cut support costs by $6.8 million annually. •  HewleG Packard reported that over 50% of its online support requests are resolved by fellow customers

online, which translates into $50 million in savings per year.

Product Innova>on •  Eighty-‐four percent of Analog Devices’ Engineer Zone is a community of 12,000+ electrical design

engineers say the community helped them speed their design process, and three-‐quarters were more likely to buy products from the company because of the community.

•  SAP’s Online Community charges its communiDes with surfacing new ideas for product enhancements. Last year, they delivered more than 90 ideas that became product features.

Revenue Genera>on •  Within 6 months of launch, The Palladium Group (founders of the balanced scorecard) online community –

XPC was generaDng revenue through partner and sponsor programs and premium membership.




Seven Common Community Mis-‐steps

1.   Community goals are skewed to company – not member -‐-‐ needs.

–  Community must be maniacally focused on serving the members first and business goals second. That is how relaDonships are built.

2.   “Tool talk” precedes strategy. –  Companies should begin evaluaDng community

soFware only aFer they have clearly arDculated and market-‐tested the community features with prospecDve members.

3.   Mausoleums are built instead of sherpa tents. –  Community programs and plans should focus on

short sprints -‐-‐ not a big-‐bang approach.

4.   Failure to feed the content beast. –  Online communiDes need a constant flow of

new, valuable informaDon for members. Members come for content and stay for community.

5. Poor community management skills. –  Community management is a profession – hire

and pay accordingly.

6. Chasing only business metrics and not member-‐driven ones.

–  Companies oFen track metrics that don’t maGer to the business but are the easiest to gather. For example, if customer saDsfacDon and retenDon is a core goal, how has the community helped customers beGer resolve their problems and avoid your call center?

7. No community zealot at the top: –  Online communiDes need a strong and visible

execuDve champion.




How Do We Get Company Leadership More Involved And Convinced Of The Value Of Community?

•  ExecuDve sponsorship is key to successful online community – take the Dme to culDvate it: it is your responsibility.

•  Always be able to answer the “so what” quesDon with consistency and clarity.

•  Community must be Ded to organizaDonal strategy in order to deliver value: make those linkages apparent.

•  Tell the whole community story in business terms. Keep your execuDve sponsor(s) informed and enable them to understand the opportuniDes, outcomes and challenges with building and growing online community.

•  You /community succeed when your enable your execuDve sponsor to shine!



Copyright © 2013 Leader Networks, LLC 7

Key Ques>ons All Online Communi>es Must Answer To Succeed

Strategy Development

Market Valida>on Business Alignment Community Opera>ons

- What are we trying to accomplish?

- Which stakeholders are we looking to engage with?

- Why? What is the business case?

- Which business processes will be enhanced? How?

- How does this iniDaDve align with our strategic objecDves?

- How can we test our hypothesis before making a significant investment?

- What do we have to offer and what would we like to see in return?

- Which features & content really maGer?

- If we build it, will they come and will they return?

- How can we ensure that the business requirements will drive the process?

- How will we know that the technical requirements align with the business requirements?

- How can we make sure that our requirements come first in selecDng and deploying a technology plauorm?

- How will we know if the iniDaDve aligns with our strategic objecDves?

- How will we measure success?

- How do we go about establishing social policies (e.g. “rules of the road”)?

- How will we meet member expectaDons on an on-‐going basis?




What’s The Big Deal About Measuring Success?

Source: Social Business: What Are Companies Really Doing? MIT Sloan Management Review, Research Report 2012 (in collaboraDon with DeloiGe), by David Kiron, Doug Palmer, Anh Nguyen Phillips, Nina Kruschwitz

Source: Social Business: ShiFing Out of First Gear MIT Sloan Management Review, Research Report 2013 (in collaboraDon with DeloiGe University Press), by David Kiron, Doug Palmer, Anh Nguyen Phillips, Robert Berkman




While Social Performance Measurement Is In Place, It Is O^en Disconnected From Strategic Objec>ves

Source: The Social Business Benchmark Study – 2013 Preliminary Findings Leader Networks, LLC (co-‐launched with the Society for New CommunicaDons Research -‐ SNCR)




How Can We Establish A Macro Perspec>ve For Return-‐on-‐investment?

ROI = N / D

Source: CompeDng for the Future Gary Hamel & C.K. Prahalad Harvard Business School Press, 1994

Numerator / Net Income: -  IdenDfying where new opportuniDes lie - AnDcipaDng changing customers needs -  InvesDng preempDvely in building new competencies

Denominator: -  Investments - Net assets - Capital employed - People



Copyright © 2013 Leader Networks, LLC 11 11

Current Target Outcome Delta / ROI

General Metrics

Site Metrics

Business Metrics

Corporate Objec>ves

Business / Func>onal Unit Objec>ves

Online Community IniDaDve (Business Case / ROI)

–  Financial –  Customer –  Process –  Learning & Growth

Online Community Metrics Should Be Aligned With Business / Func>onal Unit And Corporate Objec>ves




Thank you!

QuesDons, comments and keeping the conversaDon going… Vanessa DiMauro CEO & Managing Partner, Leader Networks 617 484 0778 @vdimauro [email protected] www.leadernetworks.com For more informaDon on this topic:

hGp://www.slideshare.net/vdimauro/how-‐to-‐excite-‐your-‐execuDves-‐about-‐online-‐community

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ABOUT SPS COMMERCE SPS Commerce is the leading provider of retail supply chain cloud services, providing the critical capabilities retailers, suppliers, and channel partners need to succeed. Headquartered in Minneapolis, MN with 700+ employees world-wide.

OUR COMMUNITY •  Publicly available Support Center

–  “Get Help. Give Help. Share Ideas.”

•  December 2012: Pilot Launch to 1000 Customers

•  January 2013: Formal Release to Focused Customer Base

•  Reached 700+ Registered Members within 8 Months –  Active Members: 86%

MEASURING SUCCESS •  Scale Support Offering

–  On-Demand Assistance •  Chat Integration into Support Center – CSAT 96% •  Searchable Training video Library – 20,000 Views

•  Product Innovation/Feedback Loop –  53 New Ideas

•  21 Under Consideration, 9 Planned, 2 Implemented! –  Engagement Across the Organization

•  Product Management, Development, Customer Operations

•  Enhanced Customer Experience –  On-Demand Assistance – 110,000 Topic Pageviews –  Transparency into New Product Features & Bugs –  Building Trust & Stronger Relationships – 60% Return Visitors

About IntelliQ Research and Strategy

Strategic market and customer insights and analyDcs firm with domain experDse in healthcare and B2B including manufacturing, transportaDon, chemicals, professional services, and informaDon technology. Started in 1983. Focused on the market research use case for community, social media analyDcs, and ROI metrics.

CincinnaD, OH State College, PA www.intelliqresearch.com

ROI Defini>on “A performance measure used to evaluate the efficiency of an investment. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.” “The monetary benefits derived from having spent money on developing or revising a system.” KEY QUESTIONS à How do I know it is worth having

a community? or Show me what I am getting out of this!

Hard Benefits

So^ Benefits

Types of Benefits

Easily Quantifiable Hard to Quantify

Profit + Revenue Customer Experience

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How to communicate value to leadership? Show me the beef!!

•  Cost avoidance (call deflection; number of calls deflected multiplied by cost of each call)

•  Lead generation (new leads directly attributed to community)

•  Improved lead close rates (activities in community that lead to sales closes)

•  Customer feedback leading to better products & services (directly attributed to community discussions & comments)

•  Higher levels of customer engagement that lead to greater satisfaction & loyalty (measurable events directly tied to community)

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Establishing Metrics

1.  Be obsessive & detailed.

2.  Measure before establishing your community and measure at key intervals thereafter.

3.  Gather & compile testimonials (e.g., success stories, instances where customers were helped, praises from community participants).

START 3 mos. 6 mos. 1 year

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What to measure?

1 •  Prospects vs. Customers

2 •  Organic Search Traffic

3 •  Lead conversion/closure rates

4 • Call deflecDon (before & aFer metrics)

5 • IdeaDon and increased flow of suggesDons

6 • Improved customer saDsfacDon scores

Other Metrics à community growth, traffic, content growth, conversations/ discussions prevalence, first call resolution.

The Good News!!

Cost Effective

-- Software Platform -- Community Managers -- IT Support

ROI Resources

• “Best PracDces for Measuring the Return on Investment of Online CommuniDes.” Oracle CorporaDon, 2012. www.oracle.com

• “The ROI of Owner CommuniDes.” Forrester Research, 2013. www.forrester.com

• CompeDng for the Future. Gary Hamel & C.K. Prahalad. Harvard Business School Press, 1994.

Lisa Sacquitne Manager, Non-‐Integrated Services SPS COMMERCE [email protected] www.spscommerce.com

Jessica McDouall Manager, Non-‐Integrated Services SPS COMMERCE [email protected] www.spscommerce.com

Panelists Contact Information

Vanessa DiMauro CEO & Managing Partner LEADER NETWORKS [email protected] www.leadernetworks.com

Robert Miller President & CEO INTELLIQ RESEARCH & STRATEGY [email protected] www.intelliqresearch.com

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