Yet more evidence of online community benefits

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A couple of days ago I blogged about some of the emerging analysis of online communities and their benefits from the Deloitte and Beeline Labs 2008 Tribalization of Business Study. I’ve  now seen the full slide deck and have posted this below.

For me, perhaps the most shocking statistic in this study continues to be that 34% of the communities studied did not have somebody charged with managing them. One of the things that people can easily overlook with online communities is that, although technology is important, these are social environments and so the social structure needs to be set up and then managed correctly. A good community manager is critical and when paired with an effective strategy and good technology it can make a community really fly.

I should also add that whilst the social aspects are important, so is technology. In fact another revealing statistic from the study is that almost one in ten of the communities studied had more than ten community managers. With good technology and an effective strategy you can really make this process more efficient. Meaning that a community can grow significantly, without a concomitant increase in bodies managing the community.

Anyway, here are the slides

  • Do Branded Online Communities Fail?
  • Companies failing with social networks
  • Why (most) online communities fail
  • Building your Community Strategy
  • Some Evidence of Online Community Benefits

Some evidence of online community benefits

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So here’s another post on the Deloitte / Beeline Labs 2008 Tribalization of Business Study that everybody seems to be talking about (including me here and here).  They are running a webinar next week on the study and I came across some slides they will be talking about thanks to Awareness Networks.

Here are a couple of slides that start to show the benefits identified of online communities. The first shows what companies are doing with online communities and the second shows the benefits they are getting.

It is clear from this that amplifying word of mouth, innovation and online research communities that are the most frequent use of online communities in the study. This mirrors our experience of working with clients and talking to people in this space. All three of these can be uses of the online community and this medium of engaging people is great for achieving them.

Perhaps of more interest for me is the second slide that looks at the benefits people are seeing of online communities. Greater awareness (including through better organic SEO) is something that is a clear benefit for brands of a community, as is generation of new ideas. What is interesting is that almost 25% of firms reported that the online community led to each of: increased sales, more referrals and more leads. This shows the clear and immediate business benefit of the communities and so the more immediate (as well as the longer term) benefits they bring.

These slides are great and start to show some of the real benefits of online communities that the study found. Adding depth and detail to the reports that came out when this study was first released.

Usage of online communities

Business measures of success

  • Do Branded Online Communities Fail?
  • Corporate Social Networks Are A Waste of Money, Study Finds
  • Social Networking in the Enterprise
  • How Internet Marketers Can Create an Extra Revenue Stream
  • Companies failing with social networks
  • Why (most) online communities fail
  • WeAreMedia Module 5: Encouraging Online Participation - Some Tips from Nonprofits
  • OCRN: The Online Community Marketing, Growth and Engagement Report
  • Why Does Corporate Social Networking Fail?
  • Corporate Social Networks Are A Waste of Money, Study Finds
  • The Art of Conversation - It’s About Listening Not Marketing
  • Requirements for a social media network

More clarity on branded online communities ‘failing’

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There has been a lot written this last week about the Deloitte report into online communities (the 2008 Tribalization of Business Study), in particular driven by a Wall Street Journal blog entry discussing how online communities fail. I wrote about this on our blog (here) and that article was also republished by FutureLab and Experientia.

At FreshNetworks we build online communities for brands, we help clients with their strategy, technology and platform. I have to say that my experience of working with clients and of online communities jarred with some of the things the Wall Street Journal blog seemed to be suggesting as it’s analysis of the report. In particular the fact that so many communities were ‘failing’ and the cost cited. The latter figure was later clarified as a mistake (6% and not the initially reported 60% of firms studied had spent in excess of $1 million on their communities). The former has been clarified thanks to Francois Glossieaux at EmergencyMarketing.

The study included a large number of cases where the community had been running for less than a year - a relatively short period. Whilst we see and help clients to realise some direct benefits of having an online community they take time to build and to develop. This changes the analysis of the Deloitte report quite a bit. At FreshNetworks we take communities through a process from infancy to maturity. For different audiences, different brands and different communities this process takes differing amounts of time. One thing that is common, however, is that considerable effort (on the part of all parties) is needed to build the community to a stage where it looks mature.

I would venture that although a business or brand may see siginificant and tangible benefits of the community from the very early days, running an evaluation of a range of communities that are less than a year old may lead to perverse conclusions. Maybe it isn’t that many online communities fail, as the Wall Street Journal blog suggested, but that many online communities are in their infancy. This is a conclusion I could relate to.

Online communities can have an impact on the business from the beginning, especially those built by brands are designed with specific business objectives in mind. But any longer-term evaluation of success really needs to allow for these communities to develop and mature and then take place.

I would be interested in any data that judges ROI or success of online communities against the stage of development for the particular community. This more detailed and segmented approach to success would have greater insights for those of use who build and manage online communities and advise clients on how best to engage with their consumers or stakeholders in this way.

  • Online community effect proves tricky to pin down, claims survey
  • Social Networking in the Enterprise
  • Corporate Social Networks Are A Waste of Money, Study Finds
  • Online Community Numbers that Don’t Add Up
  • Why (most) online communities fail
  • Corporate Social Networks Are A Waste of Money, Study Finds
  • Some Q&A; on virtual private communities

Looking forward to NESTA Innovation Edge

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On Tuesday I’m attending NESTA’s Innovation Edge conference in London. The programme looks great and it should be a packed day. I’m going to be blogging throughout the day on as many sessions as I go to as possible and you can follow the posts here.

I’m particularly looking forward to:

  • A conversation with the ‘Inventor of the Web’, Sir Tim Berners-Lee
  • Bob Geldof, Jonathan Freedland and Helen Alexander of the Economist debating innovation as either a saviour of the world or another neo-colonialist tool
  • A seminar on whether social networks are the new cities with Charles Leadbeater and Michael Birch from Bebo amongst others
  • A fringe event by Channel Four on creativity beyond television

Should be a great day.