Budgets in 2020 are…probably what you are expecting
Unstable. Some 90% of marketers say their budget commitments have been delayed or are under review, and Communities are also experiencing a budget crunch with layoffs happening in many industries.
A way to prepare for a possible competitive budget cycle is to know the value of your community. The problem is that calculating the business value of a community is both variable and complex. Every community has a unique purpose, goals, and architecture that make it difficult for everyone to agree on the economic impact to the business.
We at Khoros are lucky to have Community customers since 2001 and to serve more than 400+ live communities currently. That experience allowed us to capture a variety of ways business value is realized from many practitioners and from our own community of experts. The knowledge assembled allowed us to produce a high-level approach on quantifying value, that you can access here for free if you like. We also have a much more in-depth version that our Sales and Business Value Consulting team ( @GrigorK and @JakeR ) are happy to help you dive in.
Why Business Value?
Most Community Managers will tell you that focus is one of the most strained resources when it comes to running a community. New stakeholders come in all the time, especially this year, asking for help to engage the community in a new way. Having a Business Value framework and simple story to point to makes it easier to say “no” flat out or provide guidance to how that new effort can be channeled to something that adds value for both the community and the business.
The Khoros Model: Briefly
Our high-level Khoros Framework is detailed in this white paper if you want to learn more or get in touch with us. The 4 most frequent business value levers we have captured are as follows in our Khoros high-level framework.
Contact Deflection : It is the most common way to attribute value to a community because answering questions is the most common activity. The general idea is that every post is at least part of an answered question that would have resulted in a support case, so therefore every post has some value at deflecting calls.
Customer Retention: Engaging in a community is a better experience than other support channels, and therefore increases customer satisfaction and loyalty. We have a number for this in our model: it is a modest 1%. But studies show that a 5% increase in retention increases profit between 25-95% , because acquiring new customers can be 5-6x more expensive than keeping your existing ones.
Customer Growth: Beyond retaining customers, community members tend to spend more - at Dr. Pierre Ricaud in France community members are twice as likely to return to shop again. Our model is more conservative, with a similar 1% number for growth in revenue from customers buying more.
Crisis Mitigation : We have many stories in our community where members act like early warning systems for issues that could escalate quickly in more public forums. If a brand is active with these leading issues, it can lead to huge savings down the road. This is also marked as 1% because it is 1% of a HUGE number - the brand’s value.
A few parting words about Business Value
There are many ways to measure the value of your community, but everyone agrees that you should have one of your own and that you should start quantifying it ASAP.
Having an agreed-upon way to measure the business value of your community is one of the surest ways to guarantee both longevity and success for your community. It not only helps you quickly explain the value to a wide array of busy executives, but it also helps you set priorities and maintain focus on what matters in a time of uncertainty.
Make sure to check out these links - and add any in the comments that you think should be included in our future research and calculations!
Free Khoros Business Value Calculator
Khoros ROI Model Brief
Thanks for reading!
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To me, Gamification speaks to the best part of communities: the people who manage communities REALLY enjoy their work, because their job is making people happy! This is usually making people happy by answering questions and connecting people with peers, but Gamification directly increases happiness by recognizing them for their efforts with points, badges, ranks, and Swag!
The whole thing was really great, but here are my key takeways for those who think TL;DR.
Gamification is fun!
Like, really, really fun. I just want to highlight a few of the ways people incentivize engagement in their communities.
Literal karate belts with custom embroidering
Towels (but in a more fun way than you are thinking)
What are your favorite community ranks and rewards? Add some comments below. One of my favorites is National Instruments super users, AKA the Knights of Ni .
When people feel recognized for their efforts - they do more. Chris Hemedinger at SAS has the largest community on the panel and a ton of SuperUsers - and they have amazing stats to back it up.
>60% of questions on their forum are answered within 1 HOUR!
It takes strategy, effort, and time
Gamification is the most direct representation of your culture in your community. Dani Weinstein at Domo talked a lot about how the ranks and badges are customized to match the Domo culture and philosophy. Domo community members can go from Yellow Belt to Black Belt. When they achieve the top rank, they receive an embroidered physical belt and a framed certificate - great wall decoration for video conferencing. SAS uses inside jokes to rank their users as SuperUsers, PROCstars, or SuperFREQs (my favorite).
You don’t have to create a comprehensive listing of badges and ranks with all the explanations behind them, but it does seem to help according to Videotron.
The way these guys talked about their programs definitely indicated it was time well spent. All of them had special events in real life to meet their users, and you could literally hear their voices swell with pride and happiness.
It is extremely cost-effective
The super-user program at Videotron increased registration and the number of super users by creating an aspirational goal for every community member - and people who have not joined yet. All it costs is a little budget for swag and events, but the payback is tremendous. For these big brands, it only takes one person to effectively manage a super-user program.
And the payback goes way beyond answered questions; it comes in the form of community growth, feedback to increase innovation, and general advocacy. Although, the ROI for questions answered cannot be ignored.
Super users generate 15% of new topics but 60-80% of replies at Videotron!
Watch it now!
If you want to learn more about gamification from these three masters of...the game. Click on this link to watch the video .
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This webinar was an hour that was absolutely packed with great information, frameworks, and anecdotes to understand and implement better engagement strategies.
What is Engagement?
Engagement is the set of actions that people take to solve problems. Specifically, in an online community, engagement is the set of actions that create value for members. It’s hard to directly measure problems solved and customer happiness, so engagement is the key proxy metric that we all use to measure the value of our communities.
That can mean a lot of things, so Rachel and the Community Roundtable team created a framework to help organize the subject.
Engagement is also empowering! People engage when they feel safe and confident. When they put themselves out there, receive positive feedback, and connect with peers they are more likely to help engage with and empower others - creating a virtuous cycle of positive value.
Engagement is Contextual
“ If you brought alcohol to work that would be frowned upon, and if you discussed spreadsheets at a dinner party, that would also make you the party pooper. ” - Rachel Happe
Determining what kinds of engagement you want to increase and measure really depends on what kind of community you want to build. If you are driving for customer support like Cloudera, then you are probably looking for Ask and Validate activities. If you are building an advocacy program, then you definitely want Share and Explore activities.
What is the impact?
This is the bulk of the webinar, so I can’t really do it justice in this blog post. Suffice it to say that Engagement usually has a pretty definable ROI in terms of cost avoidance or value created. For example, every support question answered corresponds to some level of case/ticket/call deflection - which has direct monetary costs for a business. Other types of engagement like new ideas, peer connections, and other posts also have value. I heard another community manager once talk about how they assigned value for blogs posted in a community by comparing it to how much they would pay a freelance writer to create a blog on their website (between $100 and $500).
How to Measure
This was my favorite section, but I am a bit of a numbers geek (it’s the Minor in Math I got in college). Claire and the team at Cloudera are data-driven, and they have one of the most sophisticated and intelligent reporting programs out there. However, the details she gives about response times and engagement across the segments of her community (prospects, customers, partners, and employees) are a gold mine for anyone looking to deliver reports to their executive stakeholders that will earn them a promotion and grow their community support.
Watch it now for yourself!
Or if you are more of a reader - you can get the full eBook on Engagement from Community Roundtable.
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Failure to Plan is Planning to Fail
It’s not just something your parents would say when you wait until the night before your project is due to start working on it. It was definitely the #1 message from this panel of experts – if you don’t take time to plan a strategy and roadmap for your community, then you will not achieve good results. It’s really that simple.
However, it can be challenging to find the time and space to actually think about a plan, write it down, and then create momentum with key stakeholders. This one hour recorded session includes some stories and advice on how to determine your strategy, create plans, and set metrics to keep you on track.
Communities can go deep or wide
Everything that is done in a community should be done with the objective of solving customer/member problems - not solving your own business problems. That being said, there are many members with many different problems. In general, communities can grow through two different philosophical approaches:
Solving more problems for existing members; AKA “Going Deeper” for the existing audience
Solving the same problems, but for people who are not members; AKA “Going wider.”
Going Deep: Upwork
Upwork is the largest community and marketplace for professional freelancers. So it is unique in that not only is it a place for people to connect and answer questions, but they are also basically auditioning for work through the community. Community is actually one of the four Core Values for Upwork, and Jennifer Sanchez has been at the forefront of building an extremely valuable community. In this session, she shared a lot of information about the growth of the Upwork community, but the strategy they followed from day one was to be focused on solving more problems for their members.
For Upwork, this meant focusing on advocacy and success for their members in all forms - from feedback about their work to childcare and career advice. One of the big trends in our society today is the incredible growth of the “gig economy.” Upwork has been leading the charge to advocate for fair treatment of the original gig workers for years now, and it is very interesting to see how their community has grown thanks to a well thought out strategy that focuses on helping their members.
Going Wide: Microsoft
Microsoft has built a strong base of users for their PowerApps family of products by focusing on the similar audiences that each product in the group has. They started with a Support-centered community for their first PowerBI product, and quickly started connecting the dots across their other products by syndicating content across each community.
Now, super users can help select which content gets promoted into other communities, and many of the community members have become experts on multiple products. This helps Microsoft grow, but it also provides the members with powerful skills in adjacent spaces that help them provide more, better data to their businesses. And everyone knows that data is now the most valuable commodity in business today.
Getting Started on your Strategy: Feverbee
One of the biggest challenges that Richard sees in Community Management today is being trying to “fly the plane while serving drinks.” Almost a third of communities are run by one person. This makes it really hard to take time off from moderation and interacting with members to figure out what you want your community to be in 3-5 years.
If there is one thing to take away from this session and this blog, it is this:
TIME SPENT ON STRATEGY IS WORTH IT!
When you focus on a strategy that is just about answering more questions, faster - then you end up with increasing costs for decreasing returns. Creating a strategy to go broader or deeper for your audience is how you scale the value of your community.
If you want to find out more - watch the full video now!
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