what is online community? - Lithium

superfans: building trust
and commitment through
online reputation

contents
1 intro
3 defining health factors for online communities
5 after peak Facebook
6 what is online community?
8 organizational ownership
10 conclusion
we help companies unlock the passion of their customers.
The Lithium Social Customer Suite allows brands to build vibrant customer communities that:
lithium.com | © 2012 Lithium Technologies, Inc. All Rights Reserved
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intro
Communities thrive or fail based upon trust. Consumers
must have some degree of trust in the hosting brand to make
the community successful, but far more important is the trust
that consumers have in their peers.
There are two key benefits to peer-to-peer trust, each
one required for a brand community to achieve its
business objectives:
If consumers trust that their peers know what they are talking
about, they are more likely to follow their advice, whether that’s
advice about which product to purchase or how to fix a problem
with a product they’ve encountered. The most prolific users
typically create 90% of the content in a brand community, so it
is vital that visitors know who among them is trustworthy.
If new community members see that the community rewards
engagement with higher levels of status and privilege, they
are more likely to invest their time and effort in making the
community successful. In other words, the community is
something like a video game—the drive to move up to the next
level compels members to higher levels of participation.
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Even a customer community with a million members depends
upon a fairly small number of people, typically around 1%, to
generate much of the excitement and interest. Without the
peer trust created by a reputation management system, this
1%—the superfans—will not engage and the community will
not achieve its business objectives. So it is vital to understand
the dynamics of online reputation and use the best available
tools for managing it.
Building this web of trust requires both the right technology
and an understanding of human behavior. Lithium’s approach
to online reputation combines those. Our software and
practices are based upon:
Ten years of social interaction data across several hundred
communities, tens of millions of users, and 50,000
superfans—consumers whose deep engagement with brand
communities drives others to participate.
Research conducted by Lithium’s Principal Scientist, Dr.
Michael Wu, who was recently named (along with Marc
Benioff and Mark Zuckerberg) as one of the most influential
people in CRM. Lithium encourages Michael to share
his research findings in a blog, which you can find on the
Lithosphere, Lithium’s own community.
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Real-world interactions through the communities Lithium
hosts for its clients, including some of the largest, brandsponsored
communities in the world at HP, AT&T, PlayStation
Europe, and Univision. Lithium’s customer success managers
(CSMs) are actively engaged with our clients in designing
reputation and reward programs in their communities.
A well-executed reputation system delivers tremendous
return on investment by empowering the smartest, most
committed members of the community to take on much
of the responsibility of managing the site and driving its
business objectives. A small minority of superfans makes the
difference between success and failure in brand communities.
For example:
Lenovo’s award-winning customer support site is staffed by a
moderation team composed entirely of customer volunteers
from all over the world—US, Australia, Canada, Germany,
India, Pakistan, and Turkey. Initially, the collaboration focused
on the operation of the community—the policies, the rules,
and the content. But in just one year, 30 members who had
earned the trust of Lenovo and their peers helped grow
Lenovo’s knowledge base to 1200 articles.
English mobile telephony provider giffgaff’s remarkable
customer community is both the customer service and
marketing arm of the company, which has fewer than 20
employees! The average time to receive a response in the
giffgaff support forum is under three minutes, and 100% of
technical questions are answered by the community. Giffgaff
members who answer others’ questions effectively and earn
high status also receive free air-time, which they can then
give as gifts to their friends. This makes these high-status
users word-of-mouth marketing agents.
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One user on Logitech’s community has posted 45,000 times
since May 2006, an average of almost 25 times per day! These
answers to technical and purchase questions have been
viewed millions of times, giving him an effective reach larger
and more lasting than the company’s advertising campaigns.
An effective rank and reputation system must
do the following:
Reward members for the full range of socially beneficial
behaviors. This sounds simple, but many systems do a poor
job of it. For example, simple reputation systems confer
status upon users based purely on the number of posts they
create, but this creates perverse incentives. Members post for
the sake of posting in order to “game the system” rather than
focusing on quality posts. Moreover, some members visit the
community every day, but only post when they have something
very important to say. These members may actually be the
glue that holds the community together, but many reputation
systems treat them poorly because they don’t post often.
Motivate members continuously through their engagement
process by progressively making succeeding levels of
achievement more difficult to attain. This concept is
sometimes known as “game mechanics,” and it is critical to
keeping members engaged. Some of Lithium’s long-standing
communities have over 150 different levels because members
keep raising the standard.
Confer meaningful privileges upon superfans. Many systems
display visible badges of status, and this is necessary but not
sufficient. While superfans are motivated by public status
markers, long-standing members are motivated by having
authority, such as the ability to move or delete content, the
ability to edit or write blog or knowledgebase articles, the
ability to post comments without moderation, and the ability
to discipline members of the community who cause trouble.
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defining health
factors for online
communities
Offer multiple paths to success. A brand community is a
complex ecosystem. Some people may be experts in one
product but not in another. Some may be great at starting
discussions, others may be great answerers of questions,
and still others may be friendly and welcoming. The rules
underlying the game must be flexible enough to enable all of
these people to feel as though they are winning. If you make
a domain small enough, every man can be a king. While this
may not be entirely practical, it is an important maxim for
creating participation among diverse audiences.
Lithium’s reputation system has been honed over ten years of
iteration in diverse and demanding environments, from online
gaming communities to the world’s largest brand community
dealing with beauty. Here are some of its key features:
The Lithium platform tracks over 70 behavioral metrics that
can be factored into the reputation system, with more factors
added as new features are built into the system. Moreover,
Lithium can import factors from external user directories, so
customers can be rewarded for loyalty or purchase behaviors
in addition to their actions within the community. No similar
system is as flexible or extensible.
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Lithium’s reputation system allows an unlimited number
of ranks, which are all programmable by business rules.
This means that first-time users can experience immediate
gratification as they move up in rank after they make one or
two posts, while long-time users can be rewarded for a range
of behaviors.
Lithium’s reputation system is linked to its role system, which
has over 100 different permissions. As a result, members who
have earned the trust of their peers can be empowered to
moderate the community, can have their content ratings count
more, and can even make badges displaying their status that
carry over into other sites such as Twitter or Wordpress.
Lithium’s reputation system is granular within the
community, so members can have an “overall” reputation in
the community at large, but a particularly high status within a
specific area of the community. This gives product specialists
or people who are prone to submitting particularly valuable
ideas a higher level of visibility than they might otherwise be
able to achieve.
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Lithium’s Customer Intelligence Center uses algorithms to surface to community managers the most important members
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in terms of the centrality of their connections with other members, the members who are emerging as extremely prolific posters,
and members whose participation is beginning to wane. The value of a superfan is so great that Lithium recommends that
companies proactively reach out to members whose participation is declining, and the Customer Intelligence Center gives them
the tools to do that.
our insights
allow us to identify social
influencers today and predict
who will be one tomorrow.
At Lithium, we have focused on the management of superfans
because all of our experience and data has shown us that if
you take care of the most important users, the rest will follow,
while the converse is not true. We work with each one of our
customers to understand their business objectives and create
a reputation structure that works for them. This is a primary
reason why Lithium communities are more vibrant and
successful than our competitors’.
our gaming science
uses a sophisticated
reputation engine to
inspire influencers to get
deeply involved
our insights
allow us to counsel our
clients on engaging
influencers and bringing better
results to their company
In the whole, respondents rated their communities as more
successful than Facebook at activities that require trust:
peer-to-peer engagement and providing pre-and-post sales
purchase support; Facebook was seen as more successful in
disseminating marketing messages.
The two channels were seen as roughly equal in their ability
to create brand awareness. Clients who have initiated brand
communities see awareness benefits as particularly salient
in the first year, suggesting that “newness” of an engagement
channel is in itself a big driver of awareness.
The ability for customers to submit and discuss ideas for product
or service improvement is the biggest downstream benefit of
social customer engagement for clients who have developed
brand communities. Clients who consider their Facebook efforts
less successful are particularly interested in bringing this
capability to Facebook in a more structured fashion.
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after peak
Facebook
As Facebook itself approaches full penetration of its core
markets and its members start to regularize their behavior,
historic growth rates for participation in corporate Facebook
pages will slow. Call it “peak Facebook.” Recent surveys
have also shown that existing consumers’ engagement with
corporate Facebook pages may be tenuous and fading. For
example, 81% of those who have become fans of a brand
have abandoned at least one such relationship because of
“irrelevant, voluminous, or boring” marketing messages.
This suggests that marketers who are committed to using
Facebook to foster relationships with social customers will
need to invent or adopt sophisticated long-term strategies for
customer engagement. Fortunately, many of the techniques
learned in brand communities can carry over into Facebook.
answer product questions
51.4%
50%
display status or achievements
42.9%
8.3%
submit ideas for service/product improvements
62.9%
50%
search our knowledge base
60%
66.7%
see the best/most useful content that others have submitted
60%
58.3%
identify other customers with similar backgrounds or needs
42.9%
50%
find products their friends or colleagues have recommended
60%
50%
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mentions by respondents who rate their Facebook pages as less successful
mentions by respondents who rate their Facebook pages as successful
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what is online
community?
One of the first questions we see from brands developing
a social customer strategy is, “Do I need both a brand
community and Facebook, and if so, what role does each
one play?”
The answer to this question always depends on circumstances
and business requirements, but given that our audience has
experience with both venues, we have a very good sense of the
role that each one plays.
Figure 1: Overall effectiveness of Facebook and brand
community. Figure 1 compares the brand community’s
perceived effectiveness with the Facebook page’s perceived
effectiveness in 10 different areas.
The first thing to note is that the one area where Facebook
shines is in outbound messaging. Because Facebook offers
outstanding reach and many brands use it as a publishing
platform for periodic updates, its prowess as a vehicle for
disseminating marketing messages is not surprising. Social
media marketing vendor Vitrue has computed that a fan
base of 1 million translates into $3.6 million in equivalent
media per year, and brands such as Coca-Cola already see
more unique visitors to their Facebook page than they do
to their company web site. In these situations, Facebook
represents a means of message dissemination that compares
favorably to advertising on a cost-per-impression basis.
Interestingly, however, Facebook was not cited as significantly
more effective than a brand community in creating brand
awareness, or creating goodwill for the brand in social
channels. Given the Facebook platform’s reach and
answer product questions
47.6%
56%
display status or achievements
52.4%
20%
submit ideas for service/product improvements
57.1%
64%
search our knowledge base
57.1%
64%
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see the best/most useful content that others have submitted
57.1%
60%
identify other customers with similar backgrounds or needs
38.1%
52%
find products their friends or colleagues have recommended
47.6%
64%
mentions by respondents who rate their communities as less successful
mentions by respondents who rate their communities as successful
viral features, one might have expected higher scores for
Facebook’s ability to increase brand awareness, but there are
several reasons why the scores may be lower than expected:
Brand awareness is still largely campaign driven, and a
Facebook page alone does not constitute a campaign.
Even when campaigns drive users to Facebook pages
and increase the brand’s fan base, there is no guarantee
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that these people were new to the brand. Most users who
associate with a brand page probably have a prior affinity for
that brand.
Finally, as we have seen through social media monitoring
studies, “buzz” around brands spikes during successful
campaigns, but typically returns to a steady state after
campaigns end.
One further explanation may be that our community clients
report that brand awareness benefits peak during the first
year, even as other benefits increase over time. If this holds
true across other social channels, it is possible that the
fact of starting a new program in and of itself is responsible
for increased awareness—probably because that program
involves an introductory campaign. When the shock of the
new wears off, what is left?
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As it turns out, brand communities annuitize exceptionally
well. Peer-to-peer engagement and an environment where
users answer one another’s questions emerge as a corps of
devoted users forms and mobilizes. Indeed, scores rise in
these areas as communities move into their second and third
years, suggesting that communities hold their users’ interest
over the long haul.
Figure 2: Anticipated benefits versus realized benefits.
Peer-to-peer buying advice and customer ideation were
two benefits exceeding client expectations. The survey tells
us that benefits clients anticipated when embarking upon a
social customer program are not always the same benefits
that emerge over time. This is particularly true in two areas:
idea development, and peer-to-peer pre-sales consulting.
Customer feedback/ideation was listed as an original purpose of
a community 46% of the time, but a realized benefit 78% of the
time. Peer-to-peer pre-sales consulting was an original purpose
13.5% of the time but a realized benefit 27% of the time.
Both of these “downstream” benefits are most likely to
emerge as byproducts of trust among members of a
community. Brands tend to be more willing to harvest and
discuss rand communities.
The ability to find products or services recommended by
friends or colleagues is also seen as a potential area of
improvement by those who are not particularly satisfied with
their Facebook efforts.
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organizational
ownership
If we see a coming convergence between the way people
interact on Facebook and the way they interact in a
brand community, it is worth asking who will lead that
convergence and how it will take place. Enterprises vary
in their determination of who owns social customer
initiatives. In some organizations, social customer initiatives
are owned by customer support or customer experience
teams. Increasingly, however, they fall under the purview of
marketing or corporate communications functions.
Figure 6: Additional requirements from Facebook by
social program ownership. As we can see from Figure 6,
organizations where marketing owns social initiatives are
demanding less of Facebook in terms of new modes of
customer engagement. In fact, ownership by marketing is
more important than the perceived success of a company’s
Facebook page in determining whether a company is
interested in customers engaging through Facebook in more
involved ways. Customer support and customer experience
groups continue to be more interested in the exchange of
ideas and the answering of product questions.
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Figure 7: Largest challenge with social customer programs,
by program ownership Marketing-led organizations’ biggest
concern with social customer programs is how to scale them.
Figure 7 shows the chief concern as scaling initiatives with
(relatively) less concern about coordination across teams
and departments. 44% of marketing-led organizations cited
“resources to scale our efforts” as the biggest challenge, as
against 34.4% of everyone and (9/34 - 26%) of non-marketing
led organizations. This suggests that one reason marketers
are less aggressively pursuing “deeper” engagement through
Facebook is that, unlike support or customer experience
organizations, they lack human resources—like contact
centers—that are perceived to be required to ensure that
social customers get the satisfaction they require from
engagement through Facebook. Better, perhaps, not to hold
out the promise of a sustained dialog with customers if an
organization cannot make good on that promise.
The survey shows that marketers and customer experience
are equally committed to responding to customers in brand
communities and through Facebook and Twitter. However,
it would not be surprising if Facebook’s reach threatens to
become overwhelming if customer actions on Facebook
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called for a response. Indeed, perhaps one thing that
marketers have learned with online communities that they
have not (yet) learned with Facebook is that customers
themselves can be the solution—not just the cause—of the
scaling problem. Time and again, we have seen that larger
communities with a devoted core of superfans actually
require less intervention from companies than fledgling
communities. The “downstream” trust benefits pay dividends.
There is no reason why this shouldn’t be so on Facebook, but
many organizations are in earlier stages of their experience
with Facebook.
Figure 8: Requirement for ROI measurement by channel and
program ownership. A final area in which brand communities
differ from other channels for marketing-led organizations
is in the need to prove themselves through ROI metrics.
As we can see from Figure 8, marketing-led organizations
generally have higher demands for ROI, but this is particularly
true for brand communities. We suspect this is a function of
the perception that Facebook engagement is free because
a Facebook page is itself free, but also of the maturity level
of Facebook as a technology and a marketing venue. As we
see increasing convergence of social channels, we should
also expect to see demands for more sophisticated Facebook
measurement tools, and growing demands for Facebook to
prove its value.
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conclusion
There are significant synergies between Facebook and brand
communities. Both offer unique marketing advantages, and
we’ve helped customers extend the reach of their brand
communities on Facebook. For its sheer size and viral
features, Facebook is generally considered more successful
at disseminating marketing messages, and is roughly equal in
its ability to create brand awareness. As we’ve seen in online
venues before, however, driving people to a social site without
providing an outlet for their needs invites a peak-and-trough
customer engagement, rather than a sustained, vital and
profitable enthusiasm. A campaign-based wave of awareness
will eventually peak and subside, and may then create
unrealistic expectations for customers. As these channels
evolve and the awareness benefits subside, marketers should
consider Facebook a useful platform for cultivating an online
presence run more like a community than a campaign.
lithium.com | © 2012 Lithium Technologies, Inc. All Rights Reserved
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The dividends of a well-developed Facebook presence will
ultimately depend on marketers inventing or adopting
sophisticated long-term strategies for customer engagement,
such that their Facebook presence derives its value from
peer-to-peer relationships. But those relationships also have
to be based in trust, both among customers and between
customers and the brand. Establishing this trust is a key,
long-term strategy. For instance, fostering productive
peer-to-peer relationships among customers and rewarding
positive behavior helps to create trust, as does identifying,
motivating, and highlighting your brand’s superfans. The
downstream annuities of trust and engagement only grow
when brands cultivate true, multi-directional relationships
with their social customers over the long term. The potential
ROI is tremendous.
Lithium social solutions helps the world’s most iconic brands to build brand nations—vibrant online communities of passionate social customers.
Lithium helps top brands such as AT&T, Sephora, Univision, and PayPal build active online communities that turn customer passion into social
media marketing ROI. For more information on how to create lasting competitive advantage with the social customer experience,
visit lithium.com, or connect with us on Twitter, Facebook and our own brand nation – the Lithosphere.
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