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Social Media’s Tough to Measure
Current benchmarks are "typically the wrong ones"
For the rest of the November 2011 issue of CRM magazine please click here
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After surveying 33 marketers and five community platform providers to determine what makes a winning branding campaign, Forrester Research concluded that current benchmarks are "typically the wrong ones."

Marketers are making two big mistakes, says Melissa Parrish, an analyst at Forrester and lead author of the study report, titled "Community Benchmarking Metrics," which tried to nail down standard measures of success in marketing. "On one end, you've got marketers setting no goals at all," she says. That's a problem because "if you're not measuring anything, how can you know when you’re successful?" she asks. "Or, worse, how do you know when you're not successful and how would you determine what to do about it?" 

The second mistake is that marketers are "so focused on quantitative measurements that they forget to deliver value to their members," Parrish says. "Communities are a type of social media, so whether or not there are conversations is only one piece of the puzzle. Whether or not those conversations are any good should be another piece."

The report details best practices that allow average community participation. "Even average performance doesn't magically happen," the report says. "There are a handful of basic practices interactive marketers must implement to ensure their efforts will perform on a par with the majority of branded communities."

Among the best practices to consider are the following:

• Have a persistent link to the community in the main navigation of your Web sites. According to the report, 19 of the 33 companies provided visibility for their communities by including a clear link in the global navigation of their Web sites. "This ensures that no matter where a user is on your Web site, the community is accessible," the report says.

• Use social media and email to promote your communities. Only 10 of the 18 companies with "average" results promoted their communities using social media. Eleven employed email as a promotional tool. "To determine if a brand should be in social media, we always start by understanding how or if the brand's audience is using social media," Parrish says. "At this stage, most brands will find at least some of their customers on social media, but then the brand has to figure out what their objectives for engaging in social media are." Parrish adds that brands should not be on social media just for the heck of it; they need to have a plan.

• Spend less than $5,000 on promotion. Forrester reports that 12 of the 33 companies surveyed spent less than $5,000 on promotional costs during the first three months of their community launches. Eleven did not exceed $5,000 for the whole first year.

Moreover, for the average branded community, only 10 percent of unique visitors to a company's Web site will visit the community, and only 5 percent of those people will become members, the report says. Those statistics support the 90-9-1 rule, which posits that "90 percent of community participants are casual members or lurkers, 9 percent are active, and 1 percent are super-active," the report notes. "The percentages will have variance in a given community, but more than half of the companies in our study track active members in the 6 percent to 10 percent range and super-active members in the 1 percent to 5 percent range."

Researchers also examined "extremely healthy communities," defined as those with well-above-average results. Those communities demonstrate the following characteristics:

• They have at least one dedicated community manager. Although the majority of companies had resources that are only "partially focused on managing the community," extremely healthy communities had at least one full-time employee primarily focused on the community. 

• They go beyond social media email. Online display ads and contests were the most common other channels used.

• They spend more than $10,000 each on promotion in the first year. Of the five companies that raised their promotional investment to that level, all of them surpassed average community visitor and registration rates. Four reported shifting the 90-9-1 average to about 80-15-5. "It's visibility and promotion of the community, overall traffic to your Web site, and other non-industry-specific measures that matter most," Parrish says.

• They all define and measure active and super-active members. Of the eight communities that report reaching "critical mass," six have measurements for active and super-active members that they track regularly. "When marketers see their active and super-active memberships starting to slip, they're able to review the data to understand what particular activities are waning and causing the slip. Then they know where to focus their efforts to get activity measures back on track," the report states.

"I was surprised to see what kinds of things some marketers aren’t tracking," Parrish says, noting that 28 percent of respondents didn't define an active member. "To me…when you're launching a community, you can't base your expectations solely on the performance of other communities in your industry. Those communities may have performed on a par with averages, but the averages we found cross industry boundaries."

• They all have extremely passionate affinity audiences. Forrester found that brands that reported small but extremely passionate audiences tend to define critical mass as "the number of active members necessary for conversations to be self-sustaining. Though only two enthusiast communities of this type participated in our survey, they both report having reached critical mass within one year of launch."


What Not to Do
In addition to defining industry-wide community benchmarks for success, Forrester included the wrong questions that marketers ask. They include the following:

• How many members do I need for my community to be successful? While membership goals could be used as "guideposts," these numbers alone should not define success.

• What do other communities in my industry look like? Researchers found that community data within industries varies so widely that it is essentially ineffective to use for establishing goals.

• How long should it take for the community to reach critical mass? A universal definition does not exist. "Regardless of the definition, achieving critical mass has more to do with particular steps taken by the marketer than simply a measure of time," the report says.


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