It’s Time to Flip the Social Media & Community ROI Equation on its Head

It’s no secret that many Brands realize tremendous value from their social media and online community efforts. Value in the form of cost-reduction for support and service, ideas for and feedback on products, product and brand advocacy… the list goes on and on. Most organizations have analytics in place and some form of dashboard that tracks performance, and in many cases, actual financial impact of social and community efforts.

Unfortunately, there is also a problem with the current approach Brands take: it’s unsustainable – unsustainable because it is predicated on Customers doing valuable work for free. 

We need a new social and online community value equation.  Stay with me here. In the early days of community, all brands really had to do was show up. Hosting a discussion forum met pent-up need for customers to connect, share and help each other. The motivation for participation was generally either purely altruistic and/or driven by the desire for enhanced reputation and recognition.

More recently Community Advocacy programs, elaborate reputation systems and game mechanics were introduced to drive contribution to communities. On the one hand, these programs and technologies enhance the Brand community experience. On the other (and more cynical) hand, they could be perceived as an inequitable attempt to squeeze more value from community members.

Further, there is currently an explosion of expertise and talent marketplaces like Maven, PopExpert, Odesk, Google Helpouts and 100s of others, Community experts now have myriad marketplace options and some are starting to charge for their talent and expertise.

To net it out:
1. Brands generally view Communities as cost-saving vs. value producing, and consequently:
2. Brands haven’t truly considered what an equitable value exchange might look like between the organization and the community;
3. Compensation to the community contributors comes in the form of either reputation and / or fulfilling on an altruistic need, with a very small percentage of member getting “MVP” benefits;
4. There is an explosion of knowledge and service marketplaces that allow experts to place financial value for knowledge and expertise.

In short: Brands have to rethink their social and community strategies from an exchanged-value perspective, or risk losing their community.

What to do?
The most critical thing is to rethink the Social & Community value equation, and to move beyond the myopic view of Customer Communities as solely a means to reduce cost. Instead of asking what the benefit is to the organization, real research and critical thinking needs to be applied to the needs, expectations and values of customers who might participate in a community. The range of value received from the the community by participants needs to be broadened – access to communal knowledge and connections are an expected part of the digital experience now. Compensation for Community participation and contribution must evolve beyond reputation and become more tangible, possibly in the form of products, services or even financial compensation.

A few key questions to explore:

  • What if community members knew the explicit value of their attention and contribution to a community? 

  • What impact would this knowledge of value have on the current community?
  • How might we enhance the community experience by surfacing and rewarding contribution beyond rank and reputation?

  • What are the emerging knowledge and service marketplaces that might attract our current key contributors?

  • How might our competition attract our customers with a more valuable community experience?

I’d love to hear other’s perspective on the issue of sustainable participation. Please chime in via the comments below.

7 responses to “It’s Time to Flip the Social Media & Community ROI Equation on its Head”

  1. I agree with many of your points and we are starting to realize this right now in our community. To start the flipping of the equation, we started with a basic poll asking what the value the customer or their company received from participating in our community. It was a nice surprise to see the response. It was not only that they felt more educated about our products/services, but they felt supported and more set up for success in their companies. The overwhelming response was that they purchased more product and implemented more features based on their participation in the community – which implies they are adopting the product further and getting more value. This is the new ROI for us to come up with – a systematic way to capture this information beyond surveys! Interesting stuff! Great blog.

  2. Great article.

    RE: “What if community members knew the explicit value of their attention and contribution to a community?”

    For collaborative communities, I think the more simple signals members can send to each other, the stronger the community gets (i.e. “like”, “thanks”, “+1”, etc).

  3. Great (scary) questions.

    I think it’s quite tricky because, as Dan Ariely beautifully illustrates in “Predictably Irrational”, people act very differently when money becomes part of the equation. If you offer your mother-in-law $100 for Thanksgiving dinner, she’ll be very upset. If you ask someone to complete a task as a social favor, they’ll work harder at it than they will for $5. Money does not equal harder work.

    I think rewards programs – good ones – could be part of this. It’s making the benefits of being “special” and participating a little more concrete, without putting a hard, sobering number on it.

    Lyft mentioned that they pay experienced drivers extra to be “mentors” to new drivers: It scales onboarding without having to create Lyft offices in new cities. That said, I think part of why this works is that they’re already paying drivers.

  4. Great questions Bill! In a community I recently worked on, the strategy was to give super contributors access to engagement metrics about their specific content in the community. The goal was also to provide SEO benefit from the host community’s links back to their own company web sites. In this case, their support community answers would be valued in terms of digital marketing and engagement metrics.

    To take your idea further, it would be an incredible community experience to see companies using big community data to power notifications to users that read: Your answer to x saved our company approximately $. Very dangerous but potentially very rewarding. Possibly more con than pro but it would be a fabulous experiment to do!

    Rachel Medanic

  5. Pandora’s box – I think one of the great dangers is suggesting (or confirming) with super users that you only gauge and value them in financial terms – because they don’t see their participation in that context. In any case, brands are well able to reward superfans financially w/o making it look like a cheap transaction – most of them simply don’t care or don’t want to bother.

  6. Bill, great post!

    Totally agree that in the evolution of brands becoming more aware of online communities, the early stages are mostly around “what can I get from them?” The initial challenge for brands is trying to determine what value a community brings to them, to justify the spend for a community platform and team for example. This initial justification falls on the side of customer support, an easy, early sweet spot to quantify value when starting things up. But as you mention, this is only the beginning, and should evolve into ideation, collaboration and co-creation of products/services. This is a more mature relationship, where mutual benefits are acknowledged, it becomes more a partnership built on trust and transparency.

    On the community side, I think we are starting to see 2 types of experts:

    The first is the traditional altruistic profile that, motivated for different reasons, really enjoy helping others and sharing their knowledge, and are not motivated by money. As Evan points out, per Dan Ariely and Dan Pink’s “Drive,” money can acutally de-motivate these folks.

    What we are now seeing though is the evolution of crowd/collaborative experiences, where individuals become their own brand and contractor – this is the second group and they may be motivated by income more strongly than or in addition to altruism (great example is where the brand actually becomes a bridge between customers who have a need and are willing to pay experts to get it, in their home). Not to say this 2nd group won’t be as potentially helpful, but their motivations are different.

    Bottom line is to understand the person’s motivations for participating, and not “game” them, but rather develop genuine relationships that are of real value to them and to your brand.

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