In episode #1 of our web series, ProCommunity, I spoke with Vanessa DiMauro, CEO of Leader Networks. We discussed how business-to-business companies are using online customer communities to strengthen customer relationships and spur innovation.
We also covered the differences between business-to-consumer and business-to-business online communities, the process for creating a business-to-business online community, and how to get the most out of your online community metrics.
ProCommunity #1 Transcript: Business-To-Business Online Communities
Josh: Welcome to episode #1 of ProCommunity, the show where online community meets business performance. I'm Josh Paul and I'm very pleased today to have with me, for our very first episode, Vanessa DiMauro, Founder and CEO of Leader Networks, a research and consulting firm that helps clients create social strategies and online communities for business. Thank you for joining us, Vanessa, and welcome.
Vanessa: It's my pleasure to be here. Thank you for having me.
Josh: You speak to large crowds, hundreds, sometimes thousands of corporate executives, quite often. I'd like to know, is there a certain level of pressure you feel being our very first guest on Pro Community?
Vanessa: Absolutely! It's very exciting to have been included, and it's always wonderful to start to experiment with these new mediums. I know that we've had things like Google+ and Skype around for a while, but now we're starting to really use them for business communications and purposeful use. It's really exciting to be part of the ongoing experiment.
Josh: Good, we're thrilled to have you here. I know one of the areas that you've done a lot of work in is with B2B communities and customer communities. How do B2B online communities differ from other types of online communities in the overall social business conversation?
Vanessa: That's a great question. It's very common for communities to be considered one general giant thing. One of my jokes is that communities are like world peace. It seems like a great idea, but it means something different to each person. B2B communities are pretty specific, and there are some differences between business and consumer communities.
With business-to-business communities, some of the critical differentiators, or things that are unique, is that they often have a very defined audience as a business-to-business is engaging with a specific audience. It might be a development group, a leadership team. It might be an executive counselor. It might be a gathering around a topic or a subject matter expertise. You typically know your audience quite specifically. They're commonly gated, meaning that, again, the identity is pretty persistent and most often you need some tracer of identity. Maybe it's a log-in or maybe it's a membership profile.
The intention is very specific. Usually, it's around peer to peer exchanges of knowledge and information exchanges. It's usually not typically about marketing or broadcasts, but really about bringing together a group to solve a common problem or to explore a topic in greater detail over a longer period of time. Those are some of the differences between business-to-business communities and consumer based communities.
Consumer communities tend to collaborate and evaporate. Perhaps, you have a particular problem or issue, like solving your printer problem, or research the best restaurant, and maybe you move on and don't go back there until faced with the same question again. With B2B communities, and you blog quite a bit about the persistent nature of the relationship with the organization and that being one of its critical success factors.
Josh: Absolutely. The way I've always described it is they bring customers, employees and partners together for the success of the customer with that particular product or service. It's not a one-off thing, it's not a one week thing; it's an ongoing relationship. The stronger that relationship is, the more successful the customer will be and the more beneficial it is to the organization.
Vanessa: That's really an excellent way of phrasing it, the idea that the customer is the center of that universe. I think I alluded to that, but when you compare against a consumer community, yes, the goal is to get them to buy or explore or share, but it's not with the same sort of dedicated success metric. I think that's really well said. That's really neat.
Josh: You mentioned most B2B communities or customer communities are gated. Some are public and some have a hybrid component where parts are private and parts are public. What are the differences between a public, private and hybrid online community, and why are they all important?
Vanessa: Right. Many communities, as a share point, have many facets of each. There might be a public component, but there usually is an area that's fairly secure or private. To talk about some of the differences, I think about it in terms of goals, benefits and then measurements of success. With public communities, in many ways the goal is to be pretty large, typically. That's part of the reason why the public strategy has been determined; so that you can attract as many participants and members as possible. In many ways, the need for it to be, or the desire for it to be public in large really gets to market visibility and reach. The ability to broadcast information, maybe, help customers troubleshoot problems with products and services, learn about new offerings, things like that.
Those benefits are really around getting market penetration. You get the message out there. You can help people solve problems more directly. Very often, it's for cost reductions. We're seeing a lot of public communities, especially in the B2B space, emerge as a call center alternative. If you can get customers to solve each other's problems and self-serve, especially in the middle of the night, or when there's a specifically complex problem or even a very simple one that the call center doesn't need to address, a public community is a brilliant opportunity to enable customers in that way. Again, size mattering distinctly.
You measure that differently in terms of SEO and page rank. Things of that nature tend to be some of the major success factors. Am I reaching the audience I need to? Am I getting the information I need to get them so the broadest amount of people is possible? With private communities, member intimacy tends to be the primary goal. We see these a lot with organizations or even in the share function, but I'll talk about that in a moment, where an organization really wants to get closer to their customers. It could be an association; it could be a corporation, a not-for-profit, or an NGO. It can take many faces.
Here, there's a long standing relationship that wants to be furthered, and a peer to peer desire to communicate. There's more flexibility with the private communities in terms of the kind of information that you share with the members. You might be able to put up product road maps, or have a fairly open and transparent discussion about future directions of the organization or solicit member feedback, or all sorts of things that you might not want to engage in a public forum because it might be co-creation and thinking with members about different topics; R & D, for example. Some of the biggest benefits we see coming out of these types of communities is really speed to market.
When organizations co-create with their customers, maybe, get new ideas, do research and development, they're able to serve the market with products and services that the customers ask for directly. That kind of directional privacy is really important. We find that the more senior the audience is in a community, the less likely they are to participate in a public forum. We've built communities, everything from the FDI to the legal markets to physicians and doctors, and it's fairly consistent that the more closed the profession or the more senior the audience, the less likely they are to engage in the public space. Here, the metrics become less about public face and things like clicks, views, and page ranks, and a lot more centered on customer renewals, net promoter scores, customer intimacy values, and product use increase, things of that nature.
And then, with hybrid communities, those are usually communities that have a public face so you can optimize and get the benefits of the SEO and the sharing of the market information, but have an area where customers can log into and have those private discussions and access private information. It takes many different forms. The majority of the software is geared towards one of these models or the other, and it's quite a find to be able to service a tool that enables both.
Josh: You mentioned some of the goals that companies achieve using online communities and B2B communities. We've always broken it out into the marketing and sales categories; creating brand advocates, increasing your prospect to close ratio, decreasing the sale cycle. Then there's the customer support, customer retention, customer satisfaction aspect, and the product management and product innovation categories. There are three areas that we see companies and membership organizations getting the most benefit. You're an expert in B2B communities and B2B social business. In what capacity do B2B companies use online communities within those three categories, or beyond those three categories? Do you see something larger coming down the pike that extends beyond those boundaries?
Vanessa: It's been an interesting journey. Recent research revealed that about 47% of all B2B organizations are thinking about or have an online community to service their customers. We're starting to see a big shift. I'd be curious to see what your experience is, too, because we're in the same space in many ways. We're seeing more organizations starting to think about the impact of the community data on their core operations. They started out as marketing channels in many ways. Brand development opportunities and brand awareness opportunities; your first bucket. It's the second and third bucket where we see they're more likely to be able to determine the ROI and see the return for the effort. Impact in some of the core operations is starting to pick up more frequently. What do you see? What do you think?
Josh: I'm seeing everything falling within those three categories, but the data and analytics is so flexible that it's not the technology or communities that haven't evolved yet, it's different business units are just starting to understand how this can have an impact on their business level goals. As they come around, the data is there, the community is there, it's just a new way of doing business, a new way of managing customers. Even large organizations can only handle a certain number of initiatives at one time. We also see a lot of companies focused on internal communities, employee collaboration and employee productivity. Mainly, large companies are focused on that because they have the numbers. Do you think marketers and support executives and product managers, people with external facing responsibilities, customer facing responsibilities, do they get community? Are they starting to? Where are they on that life cycle of understanding?
Vanessa: Absolutely. Your point earlier about the metrics dovetails pretty directly into the executive level understanding of the value communities can sometimes bring to the organizations. Up until recently, we didn't have the analytics and a lot of the computing power to be able to mine the data and surface trends from the community participation. In many ways, a lot of organizations fell back upon counting that which they could count. This must be successful, because 427,000 people liked it. But did it lead to sales? Did it increase the footprint within the organization? Did it help the member feel a greater connectiveness or intimacy with the organization? We didn't know.
Now that the analytical power is there, a lot of the tools before us, but more importantly, organizations are starting to understand that unstructured data. Those that can be surfaced from the discussions, from the exchanges online are just as powerful and useful in this larger social business context. When organizations mine both the structured and unstructured data they can surface trends and see returns, and even identify whether a customer was positively or negatively impacted through their participation in the community. That's where the communities are starting to be more strategic within the organizations. The combination of the data and skill sets to mine the data and leverage it in appropriate ways is starting to raise communities into the awareness of the strategy executives, product and development, and even R & D. It's moving out of being only a marketing activity into many other areas of the organization as well.
Josh: I think what you said about the unstructured data is a really valuable point. I have a background in product management and product strategy, and every organization that I've worked with has pretty much relied on surveys. The better process is to start with interviews in getting that qualitative, unstructured data. You get a lot richer feedback about your product even though you're getting fewer responses. The data within that unstructured feedback is a lot of the times a lot more valuable, especially when you're starting to gather data and figuring out the direction that you need to ask further questions is really important. We start with interviews, and then process those interviews, and turn those into surveys to confirm that data rather than starting with surveys. That applies within communities and analyzing that unstructured data as well.
Vanessa: One great example that comes to mind was even as early as, I think, it was 1997. I was running a large online community for Cambridge Technology Partners called Cambridge Information Network. We had about 10,000 CIOs from larger organizations as part of this community. They started sharing information about this problem they were starting to have. It was the year 2000 problem. We knew there was an issue with the numbers, and they kept talking about the number conversions and some of the issues they were going to have in the client-server environment. They didn't have a name for it, but through word of mouth everyone became pretty poignantly aware that not only would they have to slash their innovation budgets, but they needed to address this burgeoning problem. We also learned that even though a lot of hoopla was around the year 2K problem, it was 1999 that was really the problem, not year 2K. Those set of numbers, while it wasn't as evangelized in the popular media because it wasn't as sexy, was more important.
We were able to mine those data and share with the larger organization, as the system integrator, that your buyers and our members are going to have this problem soon. Not only are they cutting expenditures, but gosh, they need a little bit of help. We were able to solve their problem and roll out a new service to CIOs in a way that they wanted it, as defined by them, before names were made and trends were identified. That's just one simple example of how an ear to the ground can become a win-win for everybody with the workers at the center.
Josh: That's a great example. We're just at the beginning of senior strategists and senior management beginning to understand how getting better market driven data can impact profitability and the roles that communities play in collecting that data and validating that data. Let's dive into the trenches for a second and talk about process. There are a lot of decisions that are made when you're planning an online community or an online customer community, and much of the community's success rides on making the right decision for that specific organization. How do you take a company from understanding that they need an online community to developing and launching an online community that's going to have an impact on their bottom line? What does that process look like?
Vanessa: Actually, our starting point is just to assume they may or may not need an online community. They're fashionable these days, and there are some criteria and behaviors that you want to look for in assessing whether an online community is right for your organization. I've actually published a couple of articles on the topic that can be downloaded from our website. In a nutshell, the ability to solve an evergreen problem, having customers who want to connect, there are a number of different criteria. We start by helping explore the strategic footprint with the company to see if it's a good fit by looking at some of the core business objectives that the organization wants to solve for a community, and making sure that they have what we like to call the "gimme." Every company is really great at identifying what's in it for them for a community, but unless there's value for the members and a dedicated focus to serve them, the community often doesn't work. It needs to be a two way street and a little heavily skewed towards serving the members.
First, we think it's very important to be able to identify the gives and the gets and really understand that they're there for the members. Then, we believe it's important to identify what that straw model for the community is. Who are you going to serve? In what ways? What do you have to offer them? We believe that the who dictates the how, when, where and why. You have to really understand the audience and what you're going to deliver. Then, we assume that, as a group, we probably have about 60, 70, 80% right, whatever you think you're going to build for the community, but until you vet with the community members, with your customers, with your prospects, whoever you're trying to serve, to find out not what they want in an online community, but what are their points of pain or what do they need from each other and from the organization to be valuable. It's the combination of developing straw models with an organization and vetting it with the members that you really have an accurate picture of what that community could look like from a behavioral and a featural perspective.
From there, you can identify what it's going to take to make this operational, what's the impact, what's the content requirements, what's the staffing and budget. Really identifying what you think is the value proposition and checking it with members. Unlike consumer communities, and we talked about this a little bit in the beginning, business-to-business communities need to take away pain or solve people's needs in order to be well used. You have to get that equation absolutely perfect, or else the rest doesn't follows suit. People don't use it, they don't value it, they don't want to spend their time there. That's a critical nut to solve. Finding the right online community software and then rolling out in a phased way, beta programs and giving some thought to member on-boarding and sustaining the community and conversations overtime, are absolutely critical.
Josh: Who typically owns the online community before, during the launch and after the launch? Which departments? Which executives?
Vanessa: We're seeing a shift. It used to be marketing all the time. Marketing always owned community. Now, we're seeing more product management, product development, even the office of strategy management and sometimes customer centers. There's a lot more variety as of probably six to nine months.
Josh: Speaking of shifts, what has surprised you the most about how social business has evolved over the past three years?
Vanessa: That's an excellent question. It's a really exciting time, as I'm sure you're seeing, too, to be in social business. There's so much opportunity and there's so many joys with this field. I think the biggest surprise, however, has been how much organizations have struggled with the metrics. In many ways, we forget that this is just good business, and any metrics or ROIs that we would apply to a normative line of business should apply in this context as well. If you can't make a business case, if you can't really understand the core value and understand the benefit, those types of things need to be really identified more and worked out. In a lot of ways, because the tools are free people perceive them to be free, and in many ways young people are leading the charter,it's easy to forget that this is a business and can have enormous returns for an organization, but it's not dabbling in tools. It has strategic value and returns for an organization. It should be taken with a strong degree of seriousness.
Josh: I like what you said about really making sure that the core of good business, or the core of social business, is helping people and helping them succeed with your products and services, helping them succeed in their jobs. If you don't get that right, the rest of it falls apart. Bringing it back to metrics for a second, you've done a lot to help large organizations better understand online community metrics. What are some of the big mistakes that people make, and how can organizations avoid them?
Vanessa: The metrics, in my opinion, need to serve the larger organizational strategy. Community and social business works when it reinforces or supports a larger organizational strategy. If you've got a new product or service and you need to get it out to market, if you need a deeper penetration of your product set for customers to understand, or more customer loyalty, that really needs to drive all of the social initiatives. Really keeping them in the same bucket, you look at your core strategy as an organization, where can social, where can community support, reinforce, or accelerate this. That's, I think, one of the most important things that we try to teach and try to work with organizations to understand. It's not about clicks, likes, and thumbs up if they're not traceable to supporting the larger goal. Putting it in context is really important.
Josh: That makes a lot of sense. It's just like any other business initiative in that regard. One last question for you, Vanessa. It's evident to many business people that communities can unlock an enormous amount of potential performance and profit in many areas across an organization. However, many people are not focused on that trend for any number of reasons. If you're speaking to a room full of executives, as you do often, what is the one thing that you would want them to understand about online communities?
Vanessa: We've talked a lot about the business and the metrics and things like that. At the end of the day you have to serve the members. The members are the most important part of the equation. When I think about online communities, the image that is very evocative in my mind, and the communities I've run that have been most successful, are really designed as membership organizations where processes, activities, and things that work in the face world. If you have a customer event, for example, that happens in person, there's an opportunity to extend that into the online community and support the members before, during and after activities.
If your customers tend to rely on their account reps or service call-ins to get information, think about using a community to support them and extend any in-person mile. Any way that communities can really accelerate and help the members is really what they need to be focused on. The technology, the tools, a lot of the metrics, they're important as well, too, but keep the member at the center and support them maniacally for it to reap the value and yield the returns that you're looking for for everyone.
Josh: It's interesting that that's not a social business concept. It's just good business, like you said. Vanessa, I want to thank you for sharing your insight and experience today. I hope we can do this again sometime.
Vanessa: Thank you.
Josh: Before we go, can you tell people where they can find you on the web?
Vanessa: My blog is blog.leadernetworks.com, and our website is leadernetworks.com with an "s". There's an active download section. We do quite a bit of research and case studies and things like that, to help service the industry. There's a mini-library of sorts that might help current and future community builders have metrics and processes and frameworks and case studies and stuff. Go shopping and enjoy. Thank you for having me.
Josh: Thank you. Vanessa, I want to thank you once again, and wish you a great day.
Vanessa: You, too. Thank you, and thanks everyone for listening.