Despite Maturity, Social Media Success Eludes Some Enterprises

October 26, 2009

This article is included in these additional categories:

Analytics, Automated & MarTech | Brand Metrics | Social Media

Though enterprise investment in online communities and other social media tools remains strong, many companies are still struggling to find ways to effectively leverage such vehicles to meet their business and marketing goals, according to a survey from Deloitte, Beeline Labs and the Society for New Communications Research. The “2009 Tribalization of Business Study” found that 94% of companies currently sponsoring online communities say they plan to maintain or increase investment in these communities and in other social media tools.

But while some respondents agree wholeheartedly that communities have helped them successfully increase word-of-mouth and boost customer loyalty and brand awareness, many others report that social media has fallen short on helping them reap bottom-line benefits, such as increased sales or decreased acquisition costs.

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Market Shows Signs of Maturation

Despite this spotty success, several data points from the study indicate that large companies’ continued use of communities and social media is beginning to mature, a development that may well prove beneficial in the long run because more of an emphasis may eventually be placed on fine-tuning and measurement.

For instance, this year’s survey points to an evolution in the way in which companies are tracking and engaging with both active and inactive members. While the number of active users and their level of participation have been considered the top measures of success for an online community, this year’s survey respondents are paying close attention to non-active users or “lurkers” – people who observe the community, but don’t participate in the discussion. Nearly one-third (32%) of respondents are capturing data on how these individuals derive value from the community.

Additionally, 20% of survey respondents have set up formal “ambassador” programs, which give outsiders preferential treatment in return for being more active in the community. Nearly four in 10 (39%) of respondents also indicated that more full-time people are being deployed to manage the communities.

“While we are seeing signs of maturation in this year’s study, there are still plenty of companies who do not realize the power of communities, and others who have not yet figured out the proper approach for leveraging communities as part of their business,” said Francois Gossieaux, partner with Beeline Labs and a senior fellow with the Society of New Communications Research.

Rethinking Community Success

Survey respondents report that the biggest obstacles to creating a successful community are getting people to join (24%), stay engaged (30%) and getting them to keep returning (21%).

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However, results indicate that very few companies are taking the steps necessary to overcome these challenges, according to the study’s sponsors. While 58% of respondents evaluated partnering with existing communities, complementary vendors or end users when developing their community, 55% of the companies that evaluated a partnership did not actually partner.

Goals, Measurement Disconnect

The survey also revealed significant gaps between community goals (such as generating word of mouth, customer loyalty and brand awareness) and how success is being measured.

The top two analytics for measuring success are the number of active users (34%) and how often people post/comment (32%), which indicates that participation is still considered to be the biggest measure of success.

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On the other hand, more potentially useful measures – such as increase in search engine rank and citations/links on other sites – are less often used, pointing to a mismatch between the desired outcome and how that outcome is measured, the study found.

“To realize the full benefit of social media and online communities, business leaders must move beyond viewing them as “bolt-ons” to their corporations,” asid Ed Moran, director of product innovation, Deloitte Services LP. “Companies need to integrate the new information flows associated with the communities with those that already exist within their companies. New management strategies and practices will be critical, including redefining the scope and role of alliances as well as the overall boundary of corporations.”

About the study: The “2009 Tribalization of Business Survey” evaluates the perceived potential of online communities and identifies how enterprises believe they may better leverage them. The survey measured the responses of over 400 companies, including Fortune 100 organizations, which have created and maintain online communities today. The communities ranged from fewer than 100 members to more than one million members.

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