A recent benchmarking report from Demand Metric on Customer Lifecycle Marketing illustrates the impact of aligning marketing efforts around a customer journey model. The report also illustrates a number of blindspots that are derailing Customer Lifecycle Marketing efforts.
The missing ingredient? Community Management.
First, highlights from the report (direct quote):
The analysis of this study’s data provides these key findings:
- The study found that less than 20% of organizations are currently marketing across the entire customer lifecycle.
- Participants spend twice as much of their marketing budgets on acquiring new customers as on retaining existing ones. (Yet most of their revenue comes from existing customers!)
- Almost 90% of the study participants indicate that marketing currently owns the understanding and management of the customer lifecycle.
- Of the lifecycle stages – Awareness, Consideration, Purchase, Retention and Advocacy – Awareness enjoys the greatest clarity of ownership, with marketing owning the stage 88% of the time. Retention is most fragmented, with few organizations defining clear ownership of this stage.
- The Awareness and Consideration stages enjoy “adequate” or “ample” levels of investment for over 70% of study participants. Retention and Advocacy both fall at the “minimal” to “none” level of funding for 55% of study participants.
- The greatest benefit to executing a customer lifecycle marketing strategy is greater customer engagement.
- The greatest challenge to marketing across the customer lifecycle is understanding customer content needs.
- 72% of strategy adherents are experiencing a revenue lift from customer lifecycle marketing.
- Over three-fourths of participants plan to increase their commitment to and investment in customer lifecycle marketing.
Clearly Customer Lifecycle Marketing is incredibly valuable when all stages of the lifecycle are addressed. So what is the problem? Based on my direct experience and years of studying the intersection of marketing and online community, I would assert that building meaningful relationships at scale is still an undeveloped function in the majority of most organizations. Further, as the data from the report shows, the “ownership” for customer retention is scattered among many departments. Add to the mix the eternal debate about “who owns social / community” and things get even more messy.
So what is a modern marketing organization to do? Consider three things:
- Community Drives Customer Lifecycle
A modern definition of online communities expands the location of “community” to be any on or offline touchpoint where customers can meet and form relationships. A modern definition also expands the concept of community management to include any form of relationship building and nurturing. Modern online communities produce a range of value for customers and businesses. Peer to peer support is the classic example, yet modern approaches include a range of deep collaboration on new product development to expansive crowdfunding campaigns – and everything in between. Community can play a valuable role in every stage of the customer lifecycle, and can often be the connective tissue to hold the entire experience together.
- Treat Engagement & Retention as a Community Management Opportunity
The practice of building and nurturing customer relationships is a job modern community managers understand very well. In particular, Community Managers can be very effective as resources in Customer Nurture campaigns during the consideration phase. I had my community management team at Autodesk reboot a nurture campaign that supported a 30 day product trial, and the results were amazing.
Further, Customer Advocacy programs grew (at least partially) out of Community Advocate / MVP programs. It is a relatively straightforward process to scale current Advocacy programs to include different customer types. There is also a massive opportunity to harmonize Influencer programs (which typically look outside of existing communities) with Advocacy programs. These are essentially two sides of the same coin – Advocates have typically been nurtured through a hosted community and Influencers have established their own communities and networks. A modern Community Manager treats these contexts as part of the larger community ecosystem.
Treating engagement and retention as a community management opportunity allows the staff with the skills to manage relationships at scale do what they do best. This is a huge missed opportunity in marketing.
- Get Real About Digital Transformation & Social Business
A modern approach to online community takes into account the entire digital ecosystem, not just single online touchpoints. A modern approach to community management nurtures engagement across the digital ecosystem. So if Community Managers know how to address the key gaps illustrated in the Demand Metric report, what’s the problem? Why isn’t it happening? There are many answers, but one factor that has had a huge negative impact is the trend of Digital Transformation initiatives absorbing (or in some cases, abandoning) Social Business efforts. I expand on (and in some ways, rant about) this in my 2015 recap post. Most Digital Transformation initiatives have focused on technology at the cost of customer engagement. Many Social Leadership teams and organizations have been disbanded or fractured and embedded to the point of being ineffective. Customer Experience initiatives often focus on superficial and in the moment customer engagements at the cost of growing the life long relationship.Bottom Line: We need a new Leadership model that addresses not only the Company : Customer relationship but also the complex network of Customer : Customers : Company relationships.
Netting it out:
- To create successful Customer Lifecycle Marketing initiatives, modern marketers must include online community and community managers.
- Community Managers can help address the current engagement and retention gaps in Customer Lifecycle Marketing programs.
- Organizations need to renew focus and investment in Online Community Leadership to drive growth via Customer Lifecycle Marketing
I am working with a portfolio of clients on evolving their community and marketing programs (lifecycle, influencer & advocacy, community management). I am also kicking off the year by offering a complimentary consultation session (for a limited time & very limited slots). If you would like to get feedback and guidance on your 2016 plans, feel free to register for a consultation here.
There seems to be a wave of bad advice and misguided thinking regarding where and how brands should engage with their communities. Examples include pundits advising brands to prioritize social efforts “off domain”, being passive observers in their communities instead of active hosts, and a general sentiment that hosting a brand-based online community is high effort and low return.
This is really unfortunate, as I’m convinced many organizations are missing key opportunities to realize value from online communities. The reasons for the bad advice and thinking are myriad and may include legitimate causes like: steady pressure from a slowly recovering economy, increased demands for customer attention online and competition for prioritization amongst a growing list of places to play in social media. Unfortunately, the lack of direct experience and ego play a role as well.
So, what’s at stake? Your network of customer relationships. Said another way: you can rent this network on Facebook (along with other tenants), or you can make the investment in hosting, growing and managing the network yourself. Renting is cheaper in the short term. Building and hosting the network creates a business asset that is generative in value if managed properly.
The Role of Host
When I say “host”, I am specifically talking about on-domain, brand-hosted communities that are built on a community platform (like Lithium or Jive) and housed under the brand’s domain. Examples include Autodesk’s AREA, SAP’s Community Network , Dell’s TechCenter and Lego’s CUUSO . The value of these communities is multi-dimensional, but hosted brand communities are generally a “clean, well-lit place” for a company to:
- offer customers peer to peer support, lowering support costs and increasing customer satisfaction;
- co-develop product and service ideas with customers, lowering research costs and creating products with a built in market;
- give special access to and content from insiders (like product developers) in the company, increasing the value of the community for members;
- share special content to enhance the use of (or use in) the products;
- discuss improvements or extensions to products and services;
- facilitate niche communities of practice around specializations;
to name just a few in the long list of possible activities that produce value for both the brand and community members.
Being a Good Host
The web is littered with failed attempts by brands trying to kickstart communities. Many remind me of the famous Bette Midler quote “but enough about me… what do YOU think about me”. Many early failures hit the wall simply because they made the simple mistake of being selfish. Brands need to be able to come up with a simple value equation as part of the strategic development process for community that accounts for both their business needs as well as that of the community member. If both parties can’t win, there is really no sense in playing. I offer the examples I gave earlier as proof that this can be done – Lego, Autodesk, Dell and others have been and are successful in their efforts. A few reminders on etiquette for being a good host (and there are many others):
- Be present and attentive
Ensure that staff are available to participate, answer questions and respond to feedback.
- Be engaged
Actively manage the community, ensuring basic moderation is happening and that there is a regular cadence of content and activity.
- Be respectful
Ensure that communications, content and activities are geared towards shared value, vs one-sided discussions about the host organization. Being respectful goes beyond generally being civil and includes the expectation that the community hosts will form relationships with members and support the community over the lang haul.
Brands as Networks
One definition of brand is “the collectively held perceptions about an organization shared amongst its stakeholders”. I find this fascinating because the statement implies that a brand can’t manifest unless it is in a networked environment. Brands need networks in order to exist. Online (and offline) Communities are a living, breathing expression of a brand.
- Online Communities should be a focal point of brands social strategy, and a “center of gravity” for social presence;
- Brands should not shy away from the role of active community host – it’s not an option, it’s a responsibility
- To be a good Community host, approach the task with the attitude that *everybody can win* instead of a zero sum game of Brand vs Customers
Online Communities: Thriving in the Economic Downturn Webinar
A FREE webinar sponsored by Forum One Networks
May 7, 2009 @ 11:00 am PDT
Register here: http://thrivesurvive-rpm.eventbrite.com
The economy is in a state of flux, but interest in and use of online communities and social media has never been higher. Hear from a panel of experienced community executives about how they are guiding their community-based businesses through the economic challenges, and hear about the opportunities they see on the horizon.
I’ll be leading an incredible panel that includes Thor Muller of Satisfaction, Chris Kenton of SocialRep and Scott Wilder of Intuit for an in-depth discussion around social media and online community strategies and tactics for surviving and thriving in the economic downturn. Session highlights will include:
– Buffalo culture as a new metaphor for your online business
– How stakeholder attitudes are changing in light of economic pressures
– Why solid community engagement strategies have never been more important (or valuable)
– Rethinking “ROI”
– Advice on how to navigate the downturn
– Budget & staffing implications during the downturn
Please note: Attendance is limited to 200 people. Register early to reserve your spot!
Thor Muller – CEO & Co-founder, Satisfaction
Thor Muller is CEO & Co-founder of Satisfaction, a startup delivering “people-powered customer service for absolutely everything.”
He is also the co-founder and former Managing Director of Rubyred Labs, a San Francisco-based web apps firm. Since its founding in 2005, Rubyred has developed social software for a range of startups and leading portals.
Prior to Rubyred, Thor was a first generation Web entrepreneur, creating Web success stories for companies such as Yahoo, Dell, Bank of America, Intel, Virgin Records, Fujitsu, Discovery Channel, and Sony. In 1995, he started and ran one of the early Web development boutiques, Prophet Communications, later acquired by Frog Design where he served as VP Digital Media. He subsequently founded Trapezo, a venture-funded company that made Web software for syndicating content, acquired by Perfect Commerce in 2002.
Christopher Kenton – CEO & Founder, SocialRep
Christopher Kenton is founder and CEO of the enterprise social media SaaS startup SocialRep, and cofounder and consulting partner at MotiveLab a social media marketing agency. Chris was formerly Senior Vice President of Corporate Strategy at the Chief Marketing Officer’s (CMO) Council, and its corporate parent, the international PR firm GlobalFluency, where he managed global business development, client consulting services and program development for business communities including the CMO Council, the Business Performance Management (BPM) Forum and the Forum to Advance the Mobile Experience (FAME).
With an extensive background in strategic marketing and software development, Chris specializes in market development, competitive positioning, marketing effectiveness and measurement, with a special emphasis on marketing technology and social media.
Scott K. Wilder, Group Manager, Intuit
Scott K. Wilder is currently the Group Manager of Intuit’s QuickBooks Online Community and User-Collaboration Web site. Previously, he served as Vice President of Marketing and Product Development at KBtoys.com and eToys. He also has held numerous senior management positions at America Online, Apple Computer, Borders.com, and American Express. While working at America Online, Scott helped create the first Web-based online advertisement and commercial Web site. Wilder has a Master degrees from The Johns Hopkins University, The New York University Leonard Stern School of Business and Georgetown University’s Leadership Coaching Program.