Posted by : Amitha Amarasinghe Monday, June 21, 2010
One key objective for companies to participate in social media is to create an online community around their brand. Most brands do it right at the initial stage, when spotting the long-term advantages of building a hive of brand evangelists online, but the most common pitfall is at the selection of expected outcomes. Are you expecting a direct monetary benefit (cash/profit) by creating your community? Alternatively, are you just expecting increased brand awareness, which later may (or may not) convert into a monetary outcome? Your choice between these two options remains very important, when you measure the success or failure of your online community. In my opinion, most brand communities do not fail. Instead, they measure the success with a wrong yardstick. In the end, it boils down to a matter of “managing expectations”, rather than measuring the success or failure of the brand community. If you set expectations for one thing, and measure success with another thing; the answer would be crystal clear; you fail.
Knowing what your target outcomes are is essential before you invest in building an online community around your brand. This is where you have to draw a clear line between ‘social media in ecommerce’ and ‘social commerce’. As I pointed out in this article, there exist a common myth that, usage of social media in ecommerce as a definition of social commerce. I believe ‘social commerce’ is one-step ahead of merely using social media in the context of e-commerce (as per Wikipedia definition). Social commerce involves adopting social media as your core business strategy, as against using social media as a yet another component of your communications mix. To adopt social media as your core business strategy, you need to visualize a sound revenue model, which will generate a strong flow of cash to your business, resulting from the social interactions of the community you build. In other words, more the members interact with each other, more money your business will get. This is what exactly happens with online communities like Lulu.com and CafePress. Their revenue model does not depend on advertising revenue or sale of a product, which would have been marketed in a different channel also. Products on Lulu.com and Cafepress.com are total “social creations” and commerce is an integral part of the community. Because of the fact that ‘commerce is an integral part’ of the community; the brand owner does not have to worry about the million dollar question of “how can I monetize my brand community?”
If you have clearly defined your expected outcomes at the outset, you would not have to worry about monetizing your community. First, answer the question “is social engagement going to be part (or whole) of my core business strategy?”. If your answer for this question is “yes”, then find yourself a sound social commerce business model like Lulu.com or Cafepress, which will generate you additional money for increased community interactions. Remember that, your core business strategy will always get more than 70% of your resources, because ultimately that is what going to achieve you your vision. If you are not confident how your community (which is going to consume more than 70% of company resources, because of it being the core business strategy) going to achieve your monetary goals, you better either find a one or change your answer to this question as “no”. (Of course, this applies only if you are a for-profit entity. This does not apply for charities) .
If your answer for this question is “no”, then that means you are taking ‘community engagement’ only as a part of your brand building strategy, but not directly expecting to monetize the community. Just like, you sponsor some offline community event to get more “social approval” for your brand; here also you are not expecting a one-to-one “cost-benefit” relationship.
The moment you decide, whether you are going to adopt “community engagement” as your core business strategy or not; you can easily set targets for your expected outcomes. As mentioned above, if you take the community as an integral part of your strategy, you have to engineer an innovative business model to generate you revenue, without disrupting the community. Because, community and money are not comfortable bedfellows. You have to design it in such a way that, creation of wealth is the core activity of the community, but with much more sense of self esteem for the community members than taking part in a “get rich quick” multi-level marketing scheme. If you find this type of a blue ocean territory, you can set monetary benefits as expected outcomes of your community without any hesitation. Examples? Lulu.com and Cafepress are classic!
If your decision was to take community engagement only as a part of your communications mix (but not adopting it as the core business strategy), then the implied meaning is that, you already have a sound business model, which runs the machines (and heads) of your business without a trouble. You only take your brand community to keep your customers engaged online. Then it makes it easier for you to leave the monetary objectives outside the equation (you already have a business model, which works, so you do not have to worry too much about how to monetize the brand community). This is the ideal environment for a brand community, when the uncomfortable bedfellows (money and community) are set apart from each other. You set goals only for community engagement, brand awareness, brand mentions etc and you measure the success based on these criteria. Members of the community will never feel that they are being “marketed”, so naturally the level of engagement will rise. Instead, they happily engage in the community, which will increase their positive attitude towards your brand. This positive attitude may convert into positive word of mouth, both online and offline, which may bring you a step ahead advantage when they make their purchase decisions.
In summary, to answer the question raised by the title of this post; most brand communities fail, because they don’t define success the right way. If you define success the wrong way, you lose focus of what you are doing and what you really want from your community, and you mess up everything.