Superfans: Building Trust and Commitment Through Online Reputation
Building trust in online customer communities requires both the right technology and an understanding of human behavior. A well-executed reputation system delivers tremendous return on investment by empowering the smartest, most committed advocates of the brand to take on much of the responsibility of managing the community and driving its business objectives. Dig into the dynamics of online reputation and learn about the available tools and software for managing it. Find out how to find, engage and empower your superfans to drive real business outcomes with social customers.
superfans: building trust and commitment through online reputation share this whitepaper contents 1 intro 3 defining health factors for online communities 5 after peak Facebook 6 what is online community? 8 organizational ownership 10 conclusion subscribe to request a demo SocialMatters we help companies unlock the passion of their customers. The Lithium Social Customer Suite allows brands to build vibrant customer communities that: reduce service costs with grow brand advocay with drive sales with innovate faster with social support social marketing social commerce social innovation lithium.com | © 2012 Lithium Technologies, Inc. All Rights Reserved 2 share this whitepaper intro Communities thrive or fail based upon trust. Consumers must have some degree of trust in the hosting brand to make the community successful, but far more important is the trust that consumers have in their peers. There are two key benefits to peer-to-peer trust, each one required for a brand community to achieve its business objectives: Even a customer community with a million members depends upon a fairly small number of people, typically around 1%, to If consumers trust that their peers know what they are talking generate much of the excitement and interest. Without the about, they are more likely to follow their advice, whether that’s peer trust created by a reputation management system, this advice about which product to purchase or how to fix a problem 1%—the superfans—will not engage and the community will with a product they’ve encountered. The most prolific users not achieve its business objectives. So it is vital to understand typically create 90% of the content in a brand community, so it the dynamics of online reputation and use the best available is vital that visitors know who among them is trustworthy. tools for managing it. If new community members see that the community rewards Building this web of trust requires both the right technology engagement with higher levels of status and privilege, they and an understanding of human behavior. Lithium’s approach are more likely to invest their time and effort in making the to online reputation combines those. Our software and community successful. In other words, the community is practices are based upon: something like a video game—the drive to move up to the next level compels members to higher levels of participation. Ten years of social interaction data across several hundred communities, tens of millions of users, and 50,000 superfans—consumers whose deep engagement with brand communities drives others to participate. Research conducted by Lithium’s Principal Scientist, Dr. Michael Wu, who was recently named (along with Marc Benioff and Mark Zuckerberg) as one of the most influential people in CRM. Lithium encourages Michael to share his research findings in a blog, which you can find on the Lithosphere, Lithium’s own community. 1 share this whitepaper Real-world interactions through the communities Lithium One user on Logitech’s community has posted 45,000 times hosts for its clients, including some of the largest, brand- since May 2006, an average of almost 25 times per day! These sponsored communities in the world at HP, AT&T, PlayStation answers to technical and purchase questions have been Europe, and Univision. Lithium’s customer success managers viewed millions of times, giving him an effective reach larger (CSMs) are actively engaged with our clients in designing and more lasting than the company’s advertising campaigns. reputation and reward programs in their communities. An effective rank and reputation system must A well-executed reputation system delivers tremendous do the following: return on investment by empowering the smartest, most committed members of the community to take on much Reward members for the full range of socially beneficial of the responsibility of managing the site and driving its behaviors. This sounds simple, but many systems do a poor business objectives. A small minority of superfans makes the job of it. For example, simple reputation systems confer difference between success and failure in brand communities. status upon users based purely on the number of posts they For example: create, but this creates perverse incentives. Members post for the sake of posting in order to “game the system” rather than Lenovo’s award-winning customer support site is staffed by a focusing on quality posts. Moreover, some members visit the moderation team composed entirely of customer volunteers community every day, but only post when they have something from all over the world—US, Australia, Canada, Germany, very important to say. These members may actually be the India, Pakistan, and Turkey. Initially, the collaboration focused glue that holds the community together, but many reputation on the operation of the community—the policies, the rules, systems treat them poorly because they don’t post often. and the content. But in just one year, 30 members who had earned the trust of Lenovo and their peers helped grow Motivate members continuously through their engagement Lenovo’s knowledge base to 1200 articles. process by progressively making succeeding levels of achievement more difficult to attain. This concept is English mobile telephony provider giffgaff’s remarkable sometimes known as “game mechanics,” and it is critical to customer community is both the customer service and keeping members engaged. Some of Lithium’s long-standing marketing arm of the company, which has fewer than 20 communities have over 150 different levels because members employees! The average time to receive a response in the keep raising the standard. giffgaff support forum is under three minutes, and 100% of technical questions are answered by the community. Giffgaff Confer meaningful privileges upon superfans. Many systems members who answer others’ questions effectively and earn display visible badges of status, and this is necessary but not high status also receive free air-time, which they can then sufficient. While superfans are motivated by public status give as gifts to their friends. This makes these high-status markers, long-standing members are motivated by having users word-of-mouth marketing agents. authority, such as the ability to move or delete content, the ability to edit or write blog or knowledgebase articles, the ability to post comments without moderation, and the ability to discipline members of the community who cause trouble. 2 share this whitepaper defining health factors for online communities Offer multiple paths to success. A brand community is a complex ecosystem. Some people may be experts in one product but not in another. Some may be great at starting discussions, others may be great answerers of questions, and still others may be friendly and welcoming. The rules underlying the game must be flexible enough to enable all of these people to feel as though they are winning. If you make a domain small enough, every man can be a king. While this may not be entirely practical, it is an important maxim for creating participation among diverse audiences. Lithium’s reputation system allows an unlimited number of ranks, which are all programmable by business rules. Lithium’s reputation system has been honed over ten years of This means that first-time users can experience immediate iteration in diverse and demanding environments, from online gratification as they move up in rank after they make one or gaming communities to the world’s largest brand community two posts, while long-time users can be rewarded for a range dealing with beauty. Here are some of its key features: of behaviors. The Lithium platform tracks over 70 behavioral metrics that Lithium’s reputation system is linked to its role system, which can be factored into the reputation system, with more factors has over 100 different permissions. As a result, members who added as new features are built into the system. Moreover, have earned the trust of their peers can be empowered to Lithium can import factors from external user directories, so moderate the community, can have their content ratings count customers can be rewarded for loyalty or purchase behaviors more, and can even make badges displaying their status that in addition to their actions within the community. No similar carry over into other sites such as Twitter or Wordpress. system is as flexible or extensible. Lithium’s reputation system is granular within the community, so members can have an “overall” reputation in the community at large, but a particularly high status within a specific area of the community. This gives product specialists or people who are prone to submitting particularly valuable ideas a higher level of visibility than they might otherwise be able to achieve. 3 share this whitepaper Lithium’s Customer Intelligence Center uses algorithms to surface to community managers the most important members in terms of the centrality of their connections with other members, the members who are emerging as extremely prolific posters, and members whose participation is beginning to wane. The value of a superfan is so great that Lithium recommends that companies proactively reach out to members whose participation is declining, and the Customer Intelligence Center gives them the tools to do that. our insights our gaming science our insights allow us to identify social uses a sophisticated allow us to counsel our influencers today and predict reputation engine to clients on engaging who will be one tomorrow. inspire influencers to get influencers and bringing better deeply involved results to their company At Lithium, we have focused on the management of superfans In the whole, respondents rated their communities as more because all of our experience and data has shown us that if successful than Facebook at activities that require trust: you take care of the most important users, the rest will follow, peer-to-peer engagement and providing pre-and-post sales while the converse is not true. We work with each one of our purchase support; Facebook was seen as more successful in customers to understand their business objectives and create disseminating marketing messages. a reputation structure that works for them. This is a primary The two channels were seen as roughly equal in their ability reason why Lithium communities are more vibrant and to create brand awareness. Clients who have initiated brand successful than our competitors’. communities see awareness benefits as particularly salient in the first year, suggesting that “newness” of an engagement channel is in itself a big driver of awareness. The ability for customers to submit and discuss ideas for product or service improvement is the biggest downstream benefit of social customer engagement for clients who have developed brand communities. Clients who consider their Facebook efforts less successful are particularly interested in bringing this capability to Facebook in a more structured fashion. 4 share this whitepaper after peak Facebook As Facebook itself approaches full penetration of its core answer product questions markets and its members start to regularize their behavior, 51.4% historic growth rates for participation in corporate Facebook 50% pages will slow. Call it “peak Facebook.” Recent surveys display status or achievements have also shown that existing consumers’ engagement with 42.9% corporate Facebook pages may be tenuous and fading. For 8.3% example, 81% of those who have become fans of a brand have abandoned at least one such relationship because of submit ideas for service/product improvements “irrelevant, voluminous, or boring” marketing messages. 62.9% 50% This suggests that marketers who are committed to using Facebook to foster relationships with social customers will search our knowledge base need to invent or adopt sophisticated long-term strategies for 60% customer engagement. Fortunately, many of the techniques 66.7% learned in brand communities can carry over into Facebook. see the best/most useful content that others have submitted 60% 58.3% identify other customers with similar backgrounds or needs 42.9% 50% find products their friends or colleagues have recommended 60% 50% mentions by respondents who rate their Facebook pages as less successful mentions by respondents who rate their Facebook pages as successful 5 share this whitepaper what is online answer product questions 47.6% community? 56% display status or achievements 52.4% 20% submit ideas for service/product improvements One of the first questions we see from brands developing 57.1% a social customer strategy is, “Do I need both a brand 64% community and Facebook, and if so, what role does each one play?” search our knowledge base 57.1% The answer to this question always depends on circumstances 64% and business requirements, but given that our audience has experience with both venues, we have a very good sense of the see the best/most useful content that others have submitted role that each one plays. 57.1% 60% Figure 1: Overall effectiveness of Facebook and brand identify other customers with similar backgrounds or needs community. Figure 1 compares the brand community’s 38.1% perceived effectiveness with the Facebook page’s perceived 52% effectiveness in 10 different areas. find products their friends or colleagues have recommended The first thing to note is that the one area where Facebook 47.6% shines is in outbound messaging. Because Facebook offers 64% outstanding reach and many brands use it as a publishing platform for periodic updates, its prowess as a vehicle for mentions by respondents who rate their communities as less successful disseminating marketing messages is not surprising. Social media marketing vendor Vitrue has computed that a fan mentions by respondents who rate their communities as successful base of 1 million translates into $3.6 million in equivalent media per year, and brands such as Coca-Cola already see more unique visitors to their Facebook page than they do viral features, one might have expected higher scores for to their company web site. In these situations, Facebook Facebook’s ability to increase brand awareness, but there are represents a means of message dissemination that compares several reasons why the scores may be lower than expected: favorably to advertising on a cost-per-impression basis. Brand awareness is still largely campaign driven, and a Interestingly, however, Facebook was not cited as significantly Facebook page alone does not constitute a campaign. more effective than a brand community in creating brand awareness, or creating goodwill for the brand in social Even when campaigns drive users to Facebook pages channels. Given the Facebook platform’s reach and and increase the brand’s fan base, there is no guarantee 6 share this whitepaper that these people were new to the brand. Most users who As it turns out, brand communities annuitize exceptionally associate with a brand page probably have a prior affinity for well. Peer-to-peer engagement and an environment where that brand. users answer one another’s questions emerge as a corps of devoted users forms and mobilizes. Indeed, scores rise in Finally, as we have seen through social media monitoring these areas as communities move into their second and third studies, “buzz” around brands spikes during successful years, suggesting that communities hold their users’ interest campaigns, but typically returns to a steady state after over the long haul. campaigns end. Figure 2: Anticipated benefits versus realized benefits. One further explanation may be that our community clients Peer-to-peer buying advice and customer ideation were report that brand awareness benefits peak during the first two benefits exceeding client expectations. The survey tells year, even as other benefits increase over time. If this holds us that benefits clients anticipated when embarking upon a true across other social channels, it is possible that the social customer program are not always the same benefits fact of starting a new program in and of itself is responsible that emerge over time. This is particularly true in two areas: for increased awareness—probably because that program idea development, and peer-to-peer pre-sales consulting. involves an introductory campaign. When the shock of the Customer feedback/ideation was listed as an original purpose of new wears off, what is left? a community 46% of the time, but a realized benefit 78% of the time. Peer-to-peer pre-sales consulting was an original purpose 13.5% of the time but a realized benefit 27% of the time. Both of these “downstream” benefits are most likely to emerge as byproducts of trust among members of a community. Brands tend to be more willing to harvest and discuss rand communities. The ability to find products or services recommended by friends or colleagues is also seen as a potential area of improvement by those who are not particularly satisfied with their Facebook efforts. 7 share this whitepaper organizational ownership If we see a coming convergence between the way people interact on Facebook and the way they interact in a brand community, it is worth asking who will lead that convergence and how it will take place. Enterprises vary in their determination of who owns social customer initiatives. In some organizations, social customer initiatives are owned by customer support or customer experience Figure 7: Largest challenge with social customer programs, teams. Increasingly, however, they fall under the purview of by program ownership Marketing-led organizations’ biggest marketing or corporate communications functions. concern with social customer programs is how to scale them. Figure 6: Additional requirements from Facebook by Figure 7 shows the chief concern as scaling initiatives with social program ownership. As we can see from Figure 6, (relatively) less concern about coordination across teams organizations where marketing owns social initiatives are and departments. 44% of marketing-led organizations cited demanding less of Facebook in terms of new modes of “resources to scale our efforts” as the biggest challenge, as customer engagement. In fact, ownership by marketing is against 34.4% of everyone and (9/34 - 26%) of non-marketing more important than the perceived success of a company’s led organizations. This suggests that one reason marketers Facebook page in determining whether a company is are less aggressively pursuing “deeper” engagement through interested in customers engaging through Facebook in more Facebook is that, unlike support or customer experience involved ways. Customer support and customer experience organizations, they lack human resources—like contact groups continue to be more interested in the exchange of centers—that are perceived to be required to ensure that ideas and the answering of product questions. social customers get the satisfaction they require from engagement through Facebook. Better, perhaps, not to hold out the promise of a sustained dialog with customers if an organization cannot make good on that promise. The survey shows that marketers and customer experience are equally committed to responding to customers in brand communities and through Facebook and Twitter. However, it would not be surprising if Facebook’s reach threatens to become overwhelming if customer actions on Facebook 8 share this whitepaper called for a response. Indeed, perhaps one thing that marketers have learned with online communities that they have not (yet) learned with Facebook is that customers themselves can be the solution—not just the cause—of the scaling problem. Time and again, we have seen that larger communities with a devoted core of superfans actually require less intervention from companies than fledgling communities. The “downstream” trust benefits pay dividends. There is no reason why this shouldn’t be so on Facebook, but many organizations are in earlier stages of their experience with Facebook. Figure 8: Requirement for ROI measurement by channel and program ownership. A final area in which brand communities differ from other channels for marketing-led organizations is in the need to prove themselves through ROI metrics. As we can see from Figure 8, marketing-led organizations generally have higher demands for ROI, but this is particularly true for brand communities. We suspect this is a function of the perception that Facebook engagement is free because a Facebook page is itself free, but also of the maturity level of Facebook as a technology and a marketing venue. As we see increasing convergence of social channels, we should also expect to see demands for more sophisticated Facebook measurement tools, and growing demands for Facebook to prove its value. 9 share this whitepaper conclusion There are significant synergies between Facebook and brand The dividends of a well-developed Facebook presence will communities. Both offer unique marketing advantages, and ultimately depend on marketers inventing or adopting we’ve helped customers extend the reach of their brand sophisticated long-term strategies for customer engagement, communities on Facebook. For its sheer size and viral such that their Facebook presence derives its value from features, Facebook is generally considered more successful peer-to-peer relationships. But those relationships also have at disseminating marketing messages, and is roughly equal in to be based in trust, both among customers and between its ability to create brand awareness. As we’ve seen in online customers and the brand. Establishing this trust is a key, venues before, however, driving people to a social site without long-term strategy. For instance, fostering productive providing an outlet for their needs invites a peak-and-trough peer-to-peer relationships among customers and rewarding customer engagement, rather than a sustained, vital and positive behavior helps to create trust, as does identifying, profitable enthusiasm. A campaign-based wave of awareness motivating, and highlighting your brand’s superfans. The will eventually peak and subside, and may then create downstream annuities of trust and engagement only grow unrealistic expectations for customers. As these channels when brands cultivate true, multi-directional relationships evolve and the awareness benefits subside, marketers should with their social customers over the long term. The potential consider Facebook a useful platform for cultivating an online ROI is tremendous. presence run more like a community than a campaign. Lithium social solutions helps the world’s most iconic brands to build brand nations—vibrant online communities of passionate social customers. Lithium helps top brands such as AT&T, Sephora, Univision, and PayPal build active online communities that turn customer passion into social media marketing ROI. For more information on how to create lasting competitive advantage with the social customer experience, visit lithium.com, or connect with us on Twitter, Facebook and our own brand nation – the Lithosphere. lithium.com | © 2012 Lithium Technologies, Inc. All Rights Reserved 10