Social Media is the hottest thing in marketing. Everyone wants to build a community with blogs, wikis, forums. But - can they be successful? can they produce real business results? where are the communities that were launched a year or two ago?

1. The hard truth about communities Can Standalone, Customer-Facing Communities Succeed?

2. Let’s build a community! Social media experts told us we should build a community Wikis! Blogs! Profiles! Forums! Ideas! It will be so engaging! We will be the Facebook of our Industry! Our competition will be jealous!

3. But then reality strikes

4. Most Community Sites Fail Why Most Online Communities Fail “60% of the online communities failed to gain traction as measured by the number of members” – Wall Street Journal Lure of “Bells and Whistles” results in over-spending on technology Inexperienced or no community moderationteam Challenge of measuring success of an online community 4

5. Gartner’s Opinion “.About 70 percent of the community typically fails to coalesce.” “Furthermore, of the 30 percent of the communities that do emerge, many revolve around interactions that planners didn't envision, that don't provide business value and that may even be counterproductive” http://www.gartner.com/it/page.jsp?id=758914

6. Community Site Lifecycle Challenge Build a community Develop critical mass of engaged users Develop critical mass of useful content Sustainability Getting users to come back, increase engagement, keep it going Make it valuable How to keep the conversation relevant How do you make UGC valuable for all your users How does your main site benefit your community Determine ROI Awareness, activity, fans and followers don’t pay the bills 6 “Chicken and Egg“ problem

7. Participation and Value 7 Traditional 1/9/90 Rule 90% Majority of Customers don’t know community exists, how it works, can’t find it, or don’t have time. 9% Enthusiasts will find a forum, read answers and vote 1% Experts will blog, answer forum questions, drive community

8. Community Destination Sites Instead of “fishing where the fish are”, standalone communities try to be a destination site Brands want to own the conversation. How many brands can realistically have communities around each topic? How many cooking communities do we need? How many profiles online do real users maintain? On how many sites are they active? 8

9. What about the success stories on the press? We have seen lots of community launch press Companies don’t do publicity about their failed attempts No one has paid attention at the graveyard of communities…

10. Community Graveyard Categories 1/9/90 community fails to impact a significant percentage of site visitors Stale No recent activity, no engagement Launch and Crash Big launch, then no one comes back Dead Communities Community dies, no longer exists Note: The intention of the next few slides is not to discredit or criticize any particular brand, but to illustrate a point and raise awareness about the difficulties of standalone communities.

11. 1/9/90 Only 0.33% of Allstate visitors ever visit the community

14. 1/9/90 14 Less than 5% of Sears visitors go to MySears.com

15. Stale Communities

16. Stale communities Traffic is very low Featured groups have 1 or 2 members

19. Low Engagement MySears.com gets ¼ the Pages/visit of the commerce site Data from compete.com

20. Launch and Crash

21. Launch and Crash

22. Launch and Crash

23. Dead communities Featured community redirects to homepage (RIP)

25. http://zzone.z100.com/ No longer exists

26. http://hotspot.hot995.com/ no longer exists

27. http://connect.kdwb.com/ no longer exists

28. http://kissnation.1061kissfm.com/ no longer exists

30. Intent-driven Community “Communities succeed if they solve a need, share an interest/passion and/or connect me with people I care about.” http://www.bazaarvoice.com/blog/2009/05/31/ghost-town-brand-community/

31. Where can Communities Succeed? Connects me with people I care about Facebook works because most of your and my friends are there — it solves the need to connect and stay up to date, thus carrying more weight as a “social resume.” Facebook, LinkedIn, Google won – you can’t compete with them Solves a real problem Intent-based community Post-Sales peer-support communities – forums mainly “Dell support forums work because they allow asynchronous conversations to solve a technical problem for a frustrated computer user.”

34. People go to your site to make decisions about your products and services Sharing other customer’s Opinions, Knowledge and Experiences to help them buy from you Experiences Opinions “I would highly recommend this mortgage company – superb process, excellent responsiveness, a pleasant experience.” “When I think of Julia Childs, I always smile and giggle a little…she inspired an entire generation of young chefs.” Knowledge Q: “What lamp can I use to replace the 9004 for street glow appicatioos?” A: “The ZX483922u Xenon Bulb can replace it”

35. Create Paths of Continuous Participation 31 Approval e-mail invites customer to answer questions 2 5 1 3 Site offers additional opportunities to participate like sharing photos Customer writes a review Customer writes a story that references products More customers attracted to the participation chain 4 Contextually relevant interactions foster engagement

36. Emotional engagement (helping others, sharing, affinity, badges) Deeper and more meaningful value exchange 83% of online shoppers would make more purchases if sites offer more interactive content Participation creates a sense of community, fosters loyalty and advocacy People who participate visit sites 9x more often and purchase 2x more often Customers helping customers also result in fewer returns and fewer support calls Create Paths of Continuous Participation 32

37. Participation and Value for Every Customer 33 EVERY CUSTOMER BENEFITS MORE ENTHUSIASTS MORE EXPERTS Majority of Users benefit from expertise and enthusiasm Read reviews, opinions, stories and answers Enthusiasts participate in the community Comment on stories, rate content, share with friends More people are enabled to share expertise Answer questions, share stories, write reviews MORE KNOWLEDGE AND MORE PASSION INCREASE PARTICIPATION AND ENGAGEMENT

38. Community that Drives Results On Your Site Increases Engagement Can Help Every Single Customer Proven Business Value It’s called Social Commerce

39. It works. Proven increase in awareness, traffic and engagement but also conversions, SEO, revenue and average order value, reductions in returns, etc. Shoppers who browsed "Top Rated Products" had a 59% higher conversion rate than the site average and spent 16% more per order than other browsers of products. - Bass Pro Shops, June 2008 Consumers were willing to pay between 20 to 99% more for a 5-star rated product than for a 4-star rated product, depending on the product category. -comScore/Kelsey, October 2007 Giving shoppers the ability to sort products within a category by customer rating led to a sales increase of 41%per unique visitor. - PETCO, June 2007 Customer Stories campaign drove13,000 new prospects for La-Z-Boy. -2009 With the use of customer Q&A, JC Whitney experienced a 23% decrease in product return rateson average. - JC Whitney, 2008 25% of search results for the world's 20 largest brands are links to user-generated content. -Socialnomics, August 2009 Consumers who recalled seeing customer reviews on a Web site reported 9% higher customer satisfaction levels, were 9% more likely to make a purchase and 8% more likely to purchase the next time they came to that site. - ForeSee Results, January 2008 27% of users report a spending increase of 5-10%; almost 7% report a spending increase of 20%+ with reviews - Razorfish "Digital Consumer Behavior Study," October 2007 Products with 50+ reviews have a 65%lower return rate - Bazaarvoice PETCO Case Study, 2007 35

40. Tested, Proven, Real The Proof Points Case Studies Industry Statistics Lear more about Social Commerce