Do You Need An Online Community For Your Customers?

L E A D E R NETWORKS
Copyright © 2011 Leader Networks, LLC Proprietary & Confidential 1
Customer Intimacy On Steroids:
The Value of B2B Online Communities
A Discussion with Vanessa DiMauro
CEO, Leader Networks

Copyright © 2011 Leader Networks, LLC Proprietary & Confidential
Agenda
1. Define online customer communities: What they are, how they work,
what value they can generate
2. Examine five successful communities: LexisNexis, Palladium, SAP, Taleo,
and Sage, and the value they generate
3. Offer ways to help you determine whether you (and your customers)
need an online community
4. Discuss lessons from the pioneers on how to build thriving communities
2

THE QUEST FOR CUSTOMER INTIMACY:
A BRIEF HISTORY OF B2B CUSTOMER
ENGAGEMENT TECHNIQUES
From the Industrial Age to the Internet Era
3

Over the Last Century, B2B Companies Have Created Distinct
Ways of Interacting With Their Customers
4

But in the Last 10 Years, the World Has Profoundly Changed
• Competition is truly global
• Customers’ problems are far
more complex
• Innovative products have
become table stakes
• B2B company missteps
become known quickly via
social media
• Competing solely on price against
offshore firms is a losing game
• Customers need much more help
to solve their mandates
• Companies need to understand
customers’ changing needs much
faster and better
• Lack of sophistication in social
media is starting to hurt
5

Over the Last Century, B2B Companies Have Created Distinct
Ways of Interacting With Their Customers
6

THE EMERGENCE OF B2B ONLINE
CUSTOMER COMMUNITIES
7

Online Communities Can Mean Many Different Things
• Depending on your
industry, profession and
even your age, the term
“online community” can
evoke multiple and often
competing perceptions
8

Defining the Phenomenon
• What we mean by online customer community
– An interactive, often gated website that a company sets up for
customers to collaboration on topics of mutual interest
• Examples of what we are talking about
– Business information provider LexisNexis Martindale Hubbell’s
Connected community for attorneys
– Software giant SAP’s Community Network (SCN)
– Consultancy Palladium Group’s community for strategy
practitioners of the Execution Premium Methodology and
Balanced Scorecard approach
– Online ad placement and tracking firm Clickable’s community for
online advertisers and their agencies
• What we’re not talking about
– Customer service websites
– E-commerce sites where goods and services are bought and sold
– Online publications that let readers comment on articles
– Blogs, twitter and general use of social media broadcast tools
– Online customer panels that focus on customer research
9

They’re Starting to Take Off
49%of businesses reporting having a customer community.
[Business.com Business Social Media Benchmarking study, 2009]
34% said they planned to create a customer community in 2011-12.
[Leader Networks New Symbiosis of Professional Networks study, 2010]
24% plan to use an online community to support senior-level client
relationships in 2011-12.
[Leader Networks New Symbiosis of Professional Networks study, 2010]
10

From Research and Experience, We See Six Reasons Why B2B
Firms Launch Online Customer Communities
11
Product
Groups
Product
DevelopmentSales
Customer
Service
Marketing
To help customers
get more value from
their products and
services
To improve the
way they
enhance
products and
services
To develop better
new products and
services
Customer-Facing
Business Functions
To market and
sell more
effectively
To reduce the cost of
post-sale service
Online
Customer
Community
To get control of the
social media
conversations
about their firm

Online Customer Communities: 3 Models
12
Shop Talk
• Goal: Helping customers troubleshoot
transactional problems with your
products/services
• Methods: Organized discussion forums
that allow viewers to share knowledge
• Typical community hosts: IT companies
whose customers help other customers
solve technical problems
Information Dissemination
• Goal: Keeping customers informed on
your products/services and how to use
them
• Methods: Company-written blogs with
comments; using Twitter and other social
media tools to broadcast information
• Typical community hosts: Regulated
industries, topics where engagement is
unlikely to be high
Professional Collaboration
• Goal: Helping customers solve longer-
term issues that involve your
products/services
• Methods: Participation in studies;
providing white papers and other
articles; holding webinars; etc.
• Typical community hosts: Firms
whose customers are professionals who
need to share information to stay
current in their fields

How an Online Community Can Create Significant Customer Value
13
1. Member has an idea
2. Member seeks advice
3. Member evaluates options
4. Member builds plan & budget
5. Member makes purchase
Goes to discussions or content
Accesses advisory service
Joins buying pack or transacts online
Surfaces buying needs
Support opportunity emerges
create valueget benefit
© 2010 Leader Networks

EXAMPLES OF SUCCESSFUL ONLINE
COMMUNITIES AND WHY THEY WERE BUILT
14

Helping Customers Get More Value from Your Products and Services
The Case of LexisNexis Martindale-Hubbell’s Connected Community
15
Community Fast Facts
Sponsoring Company: LexisNexis
Martindale-Hubbell
Audience: Global legal professionals
Size: More than 40K registered members
Launch date: June 2009
Product Groups
Product
Development
Sales
Customer
Service
Marketing
Online
Customer
Community

About the Connected Community
• Martindale-Hubbell a 140-year-old international business unit of LexisNexis
($3B+ firm)
• $190M revenue and 27,000 clients in legal market (law firms, corporate counsel)
• Especially known for Martindale-Hubbell Legal directory and Peer Review
Ratings
• Launch and grow legal industry’s premier online community
• Make Martindale.com more interactive for its 1 million lawyers and law firm
customers
• Retain existing clients and gain new ones
• A global online community for corporate counsel, law firm attorneys and other
legal professionals, beta launch in June 2008
• Lets them network and collaborate in a trusted environment
• More than 270,000 pieces of counsel-created research, online events and other
content contributed by members
• Members can tap LexisNexis information and other legal data: statistics,
research, news, law firm profiles, marketing trends, ratings, polls and client
reviews
• Integrated 37M LinkedIn users from the legal profession
16
Company
Background
Case for
Community
What They
Built

About the Connected Community (cont’d.)
• Has grown to >40,000 members (10X growth in 1 year)
• Members from over 120 countries
• 700 active groups, 110,000 blog posts by members and 2,500 members
have participated in community webinars
• Improved value to Martindale customers: Martindale is sending more
qualified visitors to law firm websites than Google search results (average
4% bounce rate vs. 83% bounce rate from Google)
• Winner of numerous awards and focus of many articles
“I regularly use Martindale to learn more about attorneys that will be
involved in my cases and to advice clients….It is the most trusted way to
locate attorneys (especially out of town).” -- Neil Rose, Partner, Willcox &
Savage
17
Results to Date
Executive
Comments

Improving the Way You Enhance Your Products/Services
The Case of Palladium Group’s Execution Premium Community
18
Sponsoring Company: Palladium Group
(founders of the Balanced Scorecard
approach to corporate measurement)
Audience: Senior strategy professionals
from organizations worldwide
Size: More than 2,700 companies
Launch date: April 2010
Product Groups
Product
Development
Sales
Customer
Service
Marketing
Online
Customer
Community

About Palladium Group’s XPC
• Palladium Group is a consulting and conference firm whose founders
invented the Balanced Scorecard measurement system (Robert Kaplan and
David Norton)
• Positions itself as the global leader in helping organizations execute their
strategies.
• Services include consulting, technology, conferences, communities, and
certification.
• Designed Execution Premium Community (XPC) to help practitioners of the
Balanced Scorecard share knowledge and experience
• Increase customer intimacy and raise awareness of products and services
• Tap into leading trends in strategy execution
• Create a new revenue-generating service line for Palladium Group
• Launched XPC in September 2009 as a private, gated online community for
worldwide strategy professionals from around the globe to access resources,
participate in research, share in discussions and work with Palladium group
strategy consultants.
• Before launch, conducted beta testing with ~700 Palladium clients
worldwide to determine content and social interaction model
19
Company
Background
Case for
Community
What They
Built

The Case of Palladium Group XPC (cont’d.)
• Global online community with more than 50% of the membership from
non-US countries, deepening Palladium’s market reach
• Membership from over 2,600 organizations worldwide
• Drives conference attendance, consulting projects and publishing arm of
Palladium
• Revenue-generating in first 6 months
• Over 15% of new members come from peer referrals
• "Collectively, we will advance the science of strategy management and
help organizations achieve execution premiums with XPC."
-- Dr. David Norton, Palladium Group Founder and Director
• “Palladium’s Execution Premium Community (XPC) provides those of us
dedicated to improving the strategic performance of our companies the
ability to exchange best practices with peers and access the expertise of
the pioneers of performance management.”
-- Takehiko Nagumo, SVP & Strategic Performance Manager, Union Bank
20
Results to Date
Executive
Comments

Boosting Product Development
The Case of SAP’s Community Network
21
Sponsoring Company: SAP
Audience: SAP customers, partners,
employees and experts.
Size: 2.3 million members
Launch date: 2004
Product Groups
Product
Development
Sales
Customer
Service
Marketing
Online
Customer
Community

About the SAP Community Network
• $17 billion enterprise software company (based in Walldorf, Germany)
• World's largest business software company (more than 52,921 employees)
• Offices in more than 50 countries worldwide
• In 2003, SAP was introducing a crucial upgrade of its software (to be delivered via the
Web) called NetWeaver. Convincing customers and business partners to upgrade to it
was not easy
• SAP executive board member Shai Agassi’s idea: Let SAP customers, integrators and
ISVs teach each others about their experiences with NetWeaver through an online
community
• Goals were to use the SAP Community Network to:
– Increase awareness of NetWeaver and other SAP products and services
– Generate more leads for the firm’s offerings
– Accelerate adoption of NetWeaver
– Help channel partners (ISVs, etc.) sell their services
• Launched the SAP Community Network (SCN) in 2003
– Today, SAP has five online communities for different audiences (developers, business
process experts, EcoHub, universities, and Business Objects customers)
22
Company
Background
Case for
Community
What They
Built

About the SAP Community Network (cont.’d)
• >2 million members from 200 countries (30,000 new members/month)
• 6,000 forum posts every day, and the median time before the first reply is 17
minutes
• More than 20 million total visits and 400,000 bi-weekly newsletter subscriber
• Net Promoter score in the 60% range. A good score would be in 30-35% range
• Generate partner program leads to > 2M members globally
• Value to SAP: Faster uptake of new products and enhancements
– Faster product/service adoption and market ramp-up
– Higher customer satisfaction and loyalty
– Up-sell and cross-sell
– Better products and customer experiences from external feedback
• Value to SAP’s customers and partners:
– Helps individuals and companies accomplish their jobs faster and with higher quality
through feedback from surveys, comments to blogs, discussion forum replies
– Lower cost of operations
“Being engaged in community and social media has brought SAP tremendous benefits,
including product adoption, market penetration, and so on — and also richness of
relationship which can translate into customer satisfaction and success – and I would guess
that would translate into customer loyalty. I know that these communities have brought SAP
tremendous financial and non-financial benefits.” --Mark Yolton, SVP of SAP Community
Network
“It has allowed us to save a lot of time and resources and … to get to a deliverable solution
much faster than we would have otherwise without the community.” -- David Hull, IT
Infrastructure Architect, Walt Disney Company
23
Results to Date
Executive
Comments

Marketing and Selling Your Offerings More Effectively
The Case of Taleo’s Talent Grid Communities
24
Sponsoring Company: Taleo
Audience: customers, partners and job
seekers
Size: 200,000,000 candidates and 5,100
customers
Launch date: September 2009
Product Groups
Product
Development
Sales
Customer
Service
Marketing
Online
Customer
Community

About Taleo’s Talent Grid Communities
• Founded in 1999, Taleo (NASDAQ: TLEO) is a $200M provider of software that
helps companies automate the process of reviewing resumes and job
applications, as well as monitoring and improving employee performance over
time (so-called “talent management solutions”)
• More than 5,000 organizations use Taleo’s products (including nearly half the
Fortune 100) in 200 countries and territories
• > 3,600 small and medium-sized companies also use its products
• By pairing social networking with talent management, Taleo's Talent Grid is
bringing together thousands, and potentially millions, to share knowledge, offer
insights and solve problems
• In September 2009, Taleo launched three online communities: The Knowledge
Exchange (an online customer community); the Solution Exchange (a partner
ecosystem); and the Talent Exchange (for recruits).
• Collectively called the Talent Grid
• Customers share best and "next" practices, discover innovative solutions and
interact to match up the world's top jobs with the best talent
25
Company
Background
Case for
Community
What They
Built

About Taleo’s Talent Grid Communities (cont.’d)
• 200 million job candidates; 500,000 new job postings per quarter; 5,100
global customers of all sizes (including 48 of the Fortune 100);
19,000,000 users
• Taleo has a 95% customer renewal rate due, in part, to communities
with 18% of customers choosing Taleo because of the communities
(Taleo Value and Customer Satisfaction Study by CedarCrestone, 2010)
• Over 2 million jobs have been posted in the past year
• Recently launched a new business unit to support online communities
• "We are delighted at the early, powerful response by the world's largest
talent management ecosystem -- Taleo's customers, partners and
candidates -- to collaborate, strategize and streamline their talent
decisions through the Talent Grid since its launch in September.”
-- Michael Gregoire, Chairman and Chief Executive Officer, Taleo
26
Results to Date
Executive
Comments

Getting Control of the Social Media Conversation About Your Firm
The case of Sage Group ACT! Community
27
Sponsoring Company: Sage Group
Audience: Customers and developers
Size: 24,000
Launch date: March 2008
Product Groups
Product
Development
Sales
Customer
Service
Marketing
Online
Customer
Community

About the Sage Group ACT! Community
• Sage Group PLC is a $2 billion software company with 13,000+ employees and >6
million customers
• Focuses on financial, CRM and other applications for small and mid-sized businesses
• Company has millions of customers (small businesses), which makes getting and
acting on customer feedback difficult (vs. a software company with many fewer but
larger customers)
• The company’s North American business unit created the ACT! Online Community to
increase interact with its contact management software customers
• The community is an open forum for customers to share positive and negative
experiences with Sage products, and interact with other customers and ACT!
developers in a variety of communication forums to support each other and improve
future versions of the product.
• Community lets Sage better listen to the needs of its small and mid-size business
customers and better serve them, so they in turn can better serve their customers
28
Company
Background
Case for
Community
What They
Built

About the Sage Group ACT! Community (cont.’d)
• In first 12 months of operation, community has had >8.9 million page views and
>266,000 searches
• As a result of the community, ACT! has seen a 20-point increase in its customer loyalty
score (as measured by the Satmetrix Net Promoter score)
• Experienced 300% increase in participation in its product beta program, and received
customer feedback that has resulted in highly impactful product, organization and
process changes.
• Additionally, the ACT! community has become one of ACT!’s top marketing assets.
• “We have seen a significant decrease in negative online reviews as ACT! users continue
to embrace the online community, using it to give feedback that Sage actively utilizes to
build a better product. In fact, the release of our newest ACT! 2009 (11.0) product was
aided by the participation of ACT! users within the community. We conducted a beta
customer participation program, in which ACT! users tested the product and Sage
developers used feedback to make immediate enhancements to the product build, often
in less than 48 hours.” -- David van Toor, ACT! General Manager
29
Results to Date
Executive
Comments

Online Customer Communities Change Business As Usual…
For The Better
Deepen client
relationships to
increase
retention
Build greater
brand equity
Provide better
customer care
Shorten product
innovation cycle
Deliver improved
financial returns
Extend accelerate
product &
services delivery
30
Social Capital
In-person + online
Enhancing the brand
because the online
community can’t be
quickly duplicated by
competitors – it takes
time to build a vibrant
community
Lowering the cost of
customer service by
having customers solve
each other’s problems
Identifying nascent
customer needs before
competitors recognize
them – and before
customers have well-
articulated them
Providing a large
and ongoing
customer research
panel
Enabling customers to
easily share detailed
information on how they’re
using their offerings with
one another, which
increases their value

And online customer
communities provide one
more major benefit …
31

Shifting from Social Media Chaos To Focus
32

Many Companies are Responding Chaotically to all the Social Chatter
33
Wiki
B2B
B2C
Twitter
Facebook
LinkedIn
Blog
Web 2.0
YouTube
RSS
On-line
Community
Thought
Leadership
Customer
Retention
Unstructured
Information

Online Communities Enable B2Bs Firm to Monitor, Coordinate,
Respond to and Influence What Customers Say About Them
34
Distribution
Product
Groups
Product
Development
Sales
Customer
Service
Marketing
Internal
Social
Media
Activities
External
Social Media
Activities
Social
Networking
Sites
Comments
Retailers’
Online
Customer
Forums
Online
Media
Discussion
Groups
Consumer
Advocacy
Online
Communities
Twitter
Chatter
A Firm’s B2B
Online
Customer
Community
Investor
Online
Communities

SO DO YOU NEED AN ONLINE
CUSTOMER COMMUNITY?
35

Which Companies Need Online Customer Communities the Most?
Common Characteristics of the Early Community Builders
36
Customers
• Willing to share
information with other
customers because they
largely don’t compete or
fast moving industry
• Have purchased a platform
product and need to
communicate with each
other about how to
capitalize on it
• Willing to participate in
off-line user groups or in
person customer summits
Customer
problems
(which their products or services
addresses)
• Critical, ongoing and ever-
changing
• Knowledge for solving
problems becomes
obsolete quickly
• Customers gain major
value by learning from the
experiences of other
customers
• Urgent need to share
experiences
Products/services
• Customers use B2B firm’s
offering as a platform to
solve bigger problems
• Customers need the
supplier to make continual
enhancements to product
• Key revenue source for
B2B firm is product/
service upgrades

IF YOU NEED A COMMUNITY , HOW
SHOULD YOU BUILD IT?
37

Building a Vibrant Community: 9 Key Success Factors
What?
1. Unanimity that community must provide big value
to members (not just to your firm)
2. Agreement on what member problems it will solve
(and they must be big ones)
3. Having key assets and conditions in place before
launch
4. Creating a steady stream of content that stimulates
members and addresses their key problems
5. Value and respect all members
6. Building the community in an evolutionary way
7. Actively keep your finger on the pulse
8. Attracting members to the community
9. Making it feel like THEIR community, not YOURS
How?
Create a strategy that defines the target member, key
problems, and how the community will address them
Conduct interviews with target members to surface key
unfilled needs that an online community could address
Deciding whether customers have strong connection to your
firm; whether you help them solve key issues, etc.
Create thought leadership content on site, in part thru
collecting, dissecting and aggregating their experiences
Creating Golden Rules for integrity and transparency
Erecting Sherpa tents instead of Mausoleums
Monitoring and measuring to know and grow; and thread key
information through-out the organization
Not using old marketing tactics to drive members
Getting members to take ownership of community discussions
and enforcing the culture

Who We Are
Leader Networks
• Leader Networks is a strategic research and consulting firm that
partners with its clients in developing social media strategies and
creating on-line B2B communities of interest.
40

Do You Need An Online Community For Your Customers?

Recommended

Recommended

More Related Content

More from Leader Networks

More from Leader Networks (20)

Recently uploaded

Recently uploaded (20)

Do You Need An Online Community For Your Customers?