Do You Need An Online Community For Your Customers?

1. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & Confidential 1Customer Intimacy On Steroids:The Value of B2B Online CommunitiesA Discussion with Vanessa DiMauroCEO, Leader Networks

2. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAgenda1. Define online customer communities: What they are, how they work,what value they can generate2. Examine five successful communities: LexisNexis, Palladium, SAP, Taleo,and Sage, and the value they generate3. Offer ways to help you determine whether you (and your customers)need an online community4. Discuss lessons from the pioneers on how to build thriving communities2

3. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialTHE QUEST FOR CUSTOMER INTIMACY:A BRIEF HISTORY OF B2B CUSTOMERENGAGEMENT TECHNIQUESFrom the Industrial Age to the Internet Era3

5. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialBut in the Last 10 Years, the World Has Profoundly Changed• Competition is truly global• Customers’ problems are farmore complex• Innovative products havebecome table stakes• B2B company misstepsbecome known quickly viasocial media• Competing solely on price againstoffshore firms is a losing game• Customers need much more helpto solve their mandates• Companies need to understandcustomers’ changing needs muchfaster and better• Lack of sophistication in socialmedia is starting to hurt5

8. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialOnline Communities Can Mean Many Different Things• Depending on yourindustry, profession andeven your age, the term“online community” canevoke multiple and oftencompeting perceptions8

9. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialDefining the Phenomenon• What we mean by online customer community– An interactive, often gated website that a company sets up forcustomers to collaboration on topics of mutual interest• Examples of what we are talking about– Business information provider LexisNexis Martindale Hubbell’sConnected community for attorneys– Software giant SAP’s Community Network (SCN)– Consultancy Palladium Group’s community for strategypractitioners of the Execution Premium Methodology andBalanced Scorecard approach– Online ad placement and tracking firm Clickable’s community foronline 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 research9

10. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialThey’re Starting to Take Off49%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 clientrelationships in 2011-12.[Leader Networks New Symbiosis of Professional Networks study, 2010]10

11. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialFrom Research and Experience, We See Six Reasons Why B2BFirms Launch Online Customer Communities11ProductGroupsProductDevelopmentSalesCustomerServiceMarketingTo help customersget more value fromtheir products andservicesTo improve theway theyenhanceproducts andservicesTo develop betternew products andservicesCustomer-FacingBusiness FunctionsTo market andsell moreeffectivelyTo reduce the cost ofpost-sale serviceOnlineCustomerCommunityTo get control of thesocial mediaconversationsabout their firm

12. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialOnline Customer Communities: 3 Models12Shop Talk• Goal: Helping customers troubleshoottransactional problems with yourproducts/services• Methods: Organized discussion forumsthat allow viewers to share knowledge• Typical community hosts: IT companieswhose customers help other customerssolve technical problemsInformation Dissemination• Goal: Keeping customers informed onyour products/services and how to usethem• Methods: Company-written blogs withcomments; using Twitter and other socialmedia tools to broadcast information• Typical community hosts: Regulatedindustries, topics where engagement isunlikely to be highProfessional Collaboration• Goal: Helping customers solve longer-term issues that involve yourproducts/services• Methods: Participation in studies;providing white papers and otherarticles; holding webinars; etc.• Typical community hosts: Firmswhose customers are professionals whoneed to share information to staycurrent in their fields

13. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialHow an Online Community Can Create Significant Customer Value131. Member has an idea2. Member seeks advice3. Member evaluates options4. Member builds plan & budget5. Member makes purchaseGoes to discussions or contentAccesses advisory serviceJoins buying pack or transacts onlineSurfaces buying needsSupport opportunity emergescreate valueget benefit© 2010 Leader Networks

15. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialHelping Customers Get More Value from Your Products and ServicesThe Case of LexisNexis Martindale-Hubbell’s Connected Community15Community Fast FactsSponsoring Company: LexisNexisMartindale-HubbellAudience: Global legal professionalsSize: More than 40K registered membersLaunch date: June 2009Product GroupsProductDevelopmentSalesCustomerServiceMarketingOnlineCustomerCommunity

16. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout 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 ReviewRatings• Launch and grow legal industry’s premier online community• Make Martindale.com more interactive for its 1 million lawyers and law firmcustomers• Retain existing clients and gain new ones• A global online community for corporate counsel, law firm attorneys and otherlegal 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 othercontent contributed by members• Members can tap LexisNexis information and other legal data: statistics,research, news, law firm profiles, marketing trends, ratings, polls and clientreviews• Integrated 37M LinkedIn users from the legal profession16CompanyBackgroundCase forCommunityWhat TheyBuilt

17. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout 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 membershave participated in community webinars• Improved value to Martindale customers: Martindale is sending morequalified visitors to law firm websites than Google search results (average4% 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 beinvolved in my cases and to advice clients….It is the most trusted way tolocate attorneys (especially out of town).” -- Neil Rose, Partner, Willcox &Savage17Results to DateExecutiveComments

18. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialImproving the Way You Enhance Your Products/ServicesThe Case of Palladium Group’s Execution Premium Community18Community Fast FactsSponsoring Company: Palladium Group(founders of the Balanced Scorecardapproach to corporate measurement)Audience: Senior strategy professionalsfrom organizations worldwideSize: More than 2,700 companiesLaunch date: April 2010Product GroupsProductDevelopmentSalesCustomerServiceMarketingOnlineCustomerCommunity

19. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout Palladium Group’s XPC• Palladium Group is a consulting and conference firm whose foundersinvented the Balanced Scorecard measurement system (Robert Kaplan andDavid Norton)• Positions itself as the global leader in helping organizations execute theirstrategies.• Services include consulting, technology, conferences, communities, andcertification.• Designed Execution Premium Community (XPC) to help practitioners of theBalanced 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 forworldwide strategy professionals from around the globe to access resources,participate in research, share in discussions and work with Palladium groupstrategy consultants.• Before launch, conducted beta testing with ~700 Palladium clientsworldwide to determine content and social interaction model19CompanyBackgroundCase forCommunityWhat TheyBuilt

20. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialThe Case of Palladium Group XPC (cont’d.)• Global online community with more than 50% of the membership fromnon-US countries, deepening Palladium’s market reach• Membership from over 2,600 organizations worldwide• Drives conference attendance, consulting projects and publishing arm ofPalladium• Revenue-generating in first 6 months• Over 15% of new members come from peer referrals• "Collectively, we will advance the science of strategy management andhelp organizations achieve execution premiums with XPC."-- Dr. David Norton, Palladium Group Founder and Director• “Palladium’s Execution Premium Community (XPC) provides those of usdedicated to improving the strategic performance of our companies theability to exchange best practices with peers and access the expertise ofthe pioneers of performance management.”-- Takehiko Nagumo, SVP & Strategic Performance Manager, Union Bank20Results to DateExecutiveComments

21. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialBoosting Product DevelopmentThe Case of SAP’s Community Network21Community Fast FactsSponsoring Company: SAPAudience: SAP customers, partners,employees and experts.Size: 2.3 million membersLaunch date: 2004Product GroupsProductDevelopmentSalesCustomerServiceMarketingOnlineCustomerCommunity

22. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout the SAP Community Network• $17 billion enterprise software company (based in Walldorf, Germany)• Worlds 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 theWeb) called NetWeaver. Convincing customers and business partners to upgrade to itwas not easy• SAP executive board member Shai Agassi’s idea: Let SAP customers, integrators andISVs teach each others about their experiences with NetWeaver through an onlinecommunity• 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, businessprocess experts, EcoHub, universities, and Business Objects customers)22CompanyBackgroundCase forCommunityWhat TheyBuilt

23. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout 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 17minutes• 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 qualitythrough 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 ofrelationship which can translate into customer satisfaction and success – and I would guessthat would translate into customer loyalty. I know that these communities have brought SAPtremendous financial and non-financial benefits.” --Mark Yolton, SVP of SAP CommunityNetwork“It has allowed us to save a lot of time and resources and … to get to a deliverable solutionmuch faster than we would have otherwise without the community.” -- David Hull, ITInfrastructure Architect, Walt Disney Company23Results to DateExecutiveComments

24. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialMarketing and Selling Your Offerings More EffectivelyThe Case of Taleo’s Talent Grid Communities24Community Fast FactsSponsoring Company: TaleoAudience: customers, partners and jobseekersSize: 200,000,000 candidates and 5,100customersLaunch date: September 2009Product GroupsProductDevelopmentSalesCustomerServiceMarketingOnlineCustomerCommunity

25. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout Taleo’s Talent Grid Communities• Founded in 1999, Taleo (NASDAQ: TLEO) is a $200M provider of software thathelps companies automate the process of reviewing resumes and jobapplications, as well as monitoring and improving employee performance overtime (so-called “talent management solutions”)• More than 5,000 organizations use Taleo’s products (including nearly half theFortune 100) in 200 countries and territories• > 3,600 small and medium-sized companies also use its products• By pairing social networking with talent management, Taleos Talent Grid isbringing together thousands, and potentially millions, to share knowledge, offerinsights and solve problems• In September 2009, Taleo launched three online communities: The KnowledgeExchange (an online customer community); the Solution Exchange (a partnerecosystem); and the Talent Exchange (for recruits).• Collectively called the Talent Grid• Customers share best and "next" practices, discover innovative solutions andinteract to match up the worlds top jobs with the best talent25CompanyBackgroundCase forCommunityWhat TheyBuilt

26. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout Taleo’s Talent Grid Communities (cont.’d)• 200 million job candidates; 500,000 new job postings per quarter; 5,100global 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 communitieswith 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 worlds largesttalent management ecosystem -- Taleos customers, partners andcandidates -- to collaborate, strategize and streamline their talentdecisions through the Talent Grid since its launch in September.”-- Michael Gregoire, Chairman and Chief Executive Officer, Taleo26Results to DateExecutiveComments

27. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialGetting Control of the Social Media Conversation About Your FirmThe case of Sage Group ACT! Community27Community Fast FactsSponsoring Company: Sage GroupAudience: Customers and developersSize: 24,000Launch date: March 2008Product GroupsProductDevelopmentSalesCustomerServiceMarketingOnlineCustomerCommunity

28. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout the Sage Group ACT! Community• Sage Group PLC is a $2 billion software company with 13,000+ employees and >6million customers• Focuses on financial, CRM and other applications for small and mid-sized businesses• Company has millions of customers (small businesses), which makes getting andacting on customer feedback difficult (vs. a software company with many fewer butlarger customers)• The company’s North American business unit created the ACT! Online Community toincrease interact with its contact management software customers• The community is an open forum for customers to share positive and negativeexperiences with Sage products, and interact with other customers and ACT!developers in a variety of communication forums to support each other and improvefuture versions of the product.• Community lets Sage better listen to the needs of its small and mid-size businesscustomers and better serve them, so they in turn can better serve their customers28CompanyBackgroundCase forCommunityWhat TheyBuilt

29. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialAbout 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 loyaltyscore (as measured by the Satmetrix Net Promoter score)• Experienced 300% increase in participation in its product beta program, and receivedcustomer feedback that has resulted in highly impactful product, organization andprocess 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 continueto embrace the online community, using it to give feedback that Sage actively utilizes tobuild a better product. In fact, the release of our newest ACT! 2009 (11.0) product wasaided by the participation of ACT! users within the community. We conducted a betacustomer participation program, in which ACT! users tested the product and Sagedevelopers used feedback to make immediate enhancements to the product build, oftenin less than 48 hours.” -- David van Toor, ACT! General Manager29Results to DateExecutiveComments

30. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialOnline Customer Communities Change Business As Usual…For The BetterDeepen clientrelationships toincreaseretentionBuild greaterbrand equityProvide bettercustomer careShorten productinnovation cycleDeliver improvedfinancial returnsExtend accelerateproduct &services delivery30Social CapitalIn-person + onlineEnhancing the brandbecause the onlinecommunity can’t bequickly duplicated bycompetitors – it takestime to build a vibrantcommunityLowering the cost ofcustomer service byhaving customers solveeach other’s problemsIdentifying nascentcustomer needs beforecompetitors recognizethem – and beforecustomers have well-articulated themProviding a largeand ongoingcustomer researchpanelEnabling customers toeasily share detailedinformation on how they’reusing their offerings withone another, whichincreases their value

33. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialMany Companies are Responding Chaotically to all the Social Chatter33WikiB2BB2CTwitterFacebookLinkedInBlogWeb 2.0YouTubeRSSOn-lineCommunityThoughtLeadershipCustomerRetentionUnstructuredInformation

34. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialOnline Communities Enable B2Bs Firm to Monitor, Coordinate,Respond to and Influence What Customers Say About Them34DistributionProductGroupsProductDevelopmentSalesCustomerServiceMarketingInternalSocialMediaActivitiesExternalSocial MediaActivitiesSocialNetworkingSitesCommentsRetailers’OnlineCustomerForumsOnlineMediaDiscussionGroupsConsumerAdvocacyOnlineCommunitiesTwitterChatterA Firm’s B2BOnlineCustomerCommunityInvestorOnlineCommunities

36. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialWhich Companies Need Online Customer Communities the Most?Common Characteristics of the Early Community Builders36Customers• Willing to shareinformation with othercustomers because theylargely don’t compete orfast moving industry• Have purchased a platformproduct and need tocommunicate with eachother about how tocapitalize on it• Willing to participate inoff-line user groups or inperson customer summitsCustomerproblems(which their products or servicesaddresses)• Critical, ongoing and ever-changing• Knowledge for solvingproblems becomesobsolete quickly• Customers gain majorvalue by learning from theexperiences of othercustomers• Urgent need to shareexperiencesProducts/services• Customers use B2B firm’soffering as a platform tosolve bigger problems• Customers need thesupplier to make continualenhancements to product• Key revenue source forB2B firm is product/service upgrades

39. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialBuilding a Vibrant Community: 9 Key Success FactorsWhat?1. Unanimity that community must provide big valueto 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 beforelaunch4. Creating a steady stream of content that stimulatesmembers and addresses their key problems5. Value and respect all members6. Building the community in an evolutionary way7. Actively keep your finger on the pulse8. Attracting members to the community9. Making it feel like THEIR community, not YOURSHow?Create a strategy that defines the target member, keyproblems, and how the community will address themConduct interviews with target members to surface keyunfilled needs that an online community could addressDeciding whether customers have strong connection to yourfirm; whether you help them solve key issues, etc.Create thought leadership content on site, in part thrucollecting, dissecting and aggregating their experiencesCreating Golden Rules for integrity and transparencyErecting Sherpa tents instead of MausoleumsMonitoring and measuring to know and grow; and thread keyinformation through-out the organizationNot using old marketing tactics to drive membersGetting members to take ownership of community discussionsand enforcing the culture

40. L E A D E R NETWORKSCopyright © 2011 Leader Networks, LLC Proprietary & ConfidentialWho We AreLeader Networks• Leader Networks is a strategic research and consulting firm thatpartners with its clients in developing social media strategies andcreating on-line B2B communities of interest.40