Web 2.0 Communities for Business – Tip #3: Pick your destination before you leave

I have found ten common themes that apply irrespective of what your enterprise does, your market is or what technology platform you are using. The post below is my third of 10 tips; each with a particular theme. These are intended to be read in the order presented, as they will build upon each other…

03

If you don’t know where you’re going, how will you know when you get there?

In my last post in this series, I wrote about the importance of first defining what business problem you are trying to solve before diving in with technology. However, you still have one more thing to do before beginning implementation: defining what success looks like.

This, too, may seem trivial. It is not. If you don’t define what business outcomes you must achieve to solve the problem at hand you—

  1. Will not implement your community in a way that enables you to measure business value or
  2. Be able to determine whether you have succeeded to address the problem at hand.

We have all seen this. You implement the new technology at the request of a business unit leader. The solution launches and works from a technical perspective (it may even be on time and under budget). However, within six months, people (usually business unit leaders) begin to indicate that the solution was a failure and that the team needs to do something else. The rest of this post describes how to avoid this.

Define success in business terms

Your defined your Problem in business terms. You need to do the same with a your definition of success. You can then use value chain analysis to map your community against your enterprise to determine what you have to deliver through your community to achieve this.

Yes, this is harder than defining success in terms of counting “eye balls,” registered members, comments or ideas. However it is no different that what you have been doing for before social media (or the Internet or even “Old Media” advertising) existed. Once you have done this, you will have three benefits:

  1. Specific requirements you must implement within your community both to trigger the value chain and to measure how much you have done this
  2. The ability to track your progress towards solving your business problem
  3. True business metrics to demonstrate the return on your investment (ROI) to your CFO or Board

This isn’t as hard (or theoretical) as it sounds

At the most base level, communities do two things:

  1. Attract and engage stakeholders (staff, customers, voters, etc.) and
  2. Capture their ideas, opinions and interests regarding this engagement

It is easy to tie this to many value chains. Here are five examples:

  • Members join your topic- or brand-based community >> You get leads to market and sell >> You can measure the conversion rate of members to paying customers.
  • Members join your community >> They add content >> This generates pages and page view >> This increases advertising inventory and revenue
  • Members Tag their content based on topics of interest >> You now know what topics they care about >> You use this to build affiliate marketing campaigns (e.g., cross-registration, sale of targeted leads) – this is very lucrative
  • Members Tag and Rate others’ content >> You know which topics are most popular >> You can now sell access to targeted advertising campaigns based on volume and interest – also lucrative
  • You promote a contest or marketing campaign >> You enable participants to click through to what you are promoting register or purchase>> You can measure the cost per participant of this channel vs. others.

What value chain you need for success will drive what data you need to capture and what systems you need to integrate (in batch or real time). It is much less costly to know this before you build your community than after.

Examples of those who have applied this well

It is always easiest to understand how to apply this by looking at good examples. Here are three. (Click on the logo to visit the community that demonstrates this concept. Please note that I am not disclosing any numbers here due to basic professionalism and protection of privacy)

menshealth Rodale wanted to boost revenue and brand loyalty in a way that fully aligned with their mission. They created the Belly-off Community and liked it to online and in-print promotions. Men read about tips to lose weigh online and Men’s Health magazine, then go online to upload their photo, compete to lose weight, get ideas from others and simply get moral support. The result was a hugely popular community that increased subscription and online advertising revenue. It also expanded a new lower-cost online channel to maintain engagement with subscribers.

hgtvScripps wanted to boost their online revenue and become the place for people to think about home improvement. They created on online community to let people share their improvements, ask questions and provide feedback to others. The community expanded Scripps inventory to present ads (increasing ad revenue) and enabled topic-based add targeting (enabling even more lucrative affiliate marketing with companies such as Lowes). The site created so much value that it led to the creation of a TV show.

kodak_logo1Kodak had a large number of registered online customers. It provided a community that used photo sharing to encourage conversion of shared content to purchased products (e.g., mugs and calendars with uploaded photos). It leveraged community interaction to enable customers to highlight their creations, creating demand for other customers to do the same. Did this site have as many “eye balls” as Flickr? No. Did it create a clearer value proposition and easier-to-measure business results? Yes.

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