Social Networking ROI


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In my previous blog I wrote that online communities have hard ROI associated with them and are logical first steps in any social strategy. I’d like to expand on this and explain the six types of online communities I think will deliver the most significant return on investment for consumer-oriented organizations.

1.  Customer support communities

Most organizations start here.  Customer support communities provide forums for your customers to share ideas, answer each other’s questions and network.  The business benefit of these communities is call and email deflection into your customer care organization.  This application of social networking delivers very tangible cost reduction ROI.

2.  Innovation communities

The second most popular place corporations start with social networking is through innovation communities. These allow subsets of your consumers to submit their own ideas and to vote on ideas submitted by others.  What you get is the best of the best ideas in stack, ranked order.  Generally these innovation communities are focused on product and service improvements and can help your business solicit and vet the best ideas from your customer base.

3.  Market research communities

Market research communicates are used to reduce the cost and increase the speed of market research.  Traditional market research requires focus groups and physical visits.  Community research can be done at a fraction of the cost and much more quickly than traditional market research.  As a result more ideas can be tested or refined faster.

4.  Customer loyalty communities

Customer loyalty communities are much like customer support communities, but tend to be oriented not on call and email deflection but on building community  around a topic of common interest.  For example a shoe company might launch a loyalty community around running marathons.  The business result is increased engagement and brand loyalty; people who participate in loyalty communities tend to spend more with the sponsoring organization.

5.  Product reviews and other user generated content

Consumer supplied product reviews tightly linked with e commerce sites add creditability to your offerings and increases revenue.  Shopping cart conversions increase and average order size can also grow.

6.  Corporate communications and feedback communities

Social networking can also be used as a platform for discussion around company sponsored content – like this corporate blog.  Key elements are the ability for companies to post their content and for consumers to comment on it.  ROI here is softer, but still tangible.  Corporate communications communities allow a company to publically state their position and offer an opportunity to discuss topics of interest that might not always be a fit for traditional communications channels like journalists.

I hope this helps demystify corporate applications of social networking.  In my next blog I will address how social networking fits with our ‘Eight to Great’ methodology for improving the customer experience.

Greg Gianforte
RightNow Technologies
A serial entrepreneur, Greg founded RightNow in 1997 and took the company public in 2004 with one of that year's most successful initial public offerings. Greg has grown RightNow to more than 700 employees worldwide and more than $1 million in revenue.


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