Enterprise Social Media: Top-and-Bottom Line Benefits

I recently had an oppor­tu­nity to sit down with Lyle Fong, the CEO of Lithium. Lithium recently part­nered with Omni­ture to pro­vide a holis­tic view of user behav­ior on social net­works. This post is the sec­ond in a three-part series.

Chris: What is the most impor­tant aspect that enter­prises should be think­ing about with regard to social media?

Lyle: What social media really boils down to is break­ing down some of the old walls that com­pa­nies had cre­ated and engag­ing with cus­tomers online. The sta­tis­tics show that cus­tomers are already online, look­ing for a place to voice their opin­ion. Com­pa­nies need to embrace that fact and change the way they think about mar­ket­ing. Instead of lob­bing press releases and tra­di­tional cor­po­rate mes­sages to cus­tomers, it’s now about lis­ten­ing to them and giv­ing them a voice. Iden­ti­fy­ing the best cus­tomers and under­stand­ing where they are online is a key part of social media strat­egy for any busi­ness. Fun­da­men­tally, there is a cul­tural shift that must occur for com­pa­nies to actu­ally start engag­ing in dia­logue with these cus­tomers so it’s a real two-way con­ver­sa­tion. That’s why some com­pa­nies have had a harder time with this concept.

Chris: I like the notion of engag­ing in a dia­logue with the cus­tomer rather than cre­at­ing a one-way “spew” of infor­ma­tion. Social media really brings about the con­cept of “accel­er­ated Dar­win­ism.” Given the fre­netic pace of our online ecosys­tem and the abil­ity of any­one to now explore the com­pe­ti­tion, brands can lit­er­ally be tran­si­tioned at the click of a but­ton. Com­pa­nies now need to have a height­ened focus with regard to cus­tomer engage­ment. What are you see­ing with regard to cus­tomer engagement?

Lyle: You’re exactly right. Con­sumers today are grow­ing more dis­trust­ful of larger insti­tu­tions.
Con­sumers are now look­ing to their peers to tell them what they should buy. For exam­ple, peo­ple buy lap­tops based on what their peers rec­om­mend. They are actu­ally more will­ing to trust them than even an expert from PC World. The chal­lenge is that this infor­ma­tion is now out there and is now acces­si­ble to every­one. This lev­els the play­ing field and cre­ates an oppor­tu­nity for smaller companies.

The cause of this shift is that peo­ple are look­ing for oth­ers with sim­i­lar inter­ests . They are out there talk­ing about what they like and don’t like. If the com­pany doesn’t have a com­mu­nity, they join another one. They believe their peers and switch brands and products.

A good exam­ple of this is with AT&T wire­less (one of our cus­tomers). They found that one woman spends 7–8 hours a day help­ing oth­ers by answer­ing ques­tions about the best rate plans, phones to pur­chase, and more. Recently she achieved the high­est level sta­tus on the com­mu­nity. The funny thing is, she is not even an AT&T Cus­tomer! Because she built up a rep­u­ta­tion on the AT&T site, she is now count­ing down the days until her con­tract with the com­pe­ti­tion is up so she can switch to AT&T. This same thing is hap­pen­ing with sev­eral large com­pa­nies like Cisco.

Chris: Inter­est­ing. Can you describe how this con­cept of a “social peck­ing order” works within these communities?

Lyle: This is the fun­da­men­tal thing that Lithium does best. We have iden­ti­fied over the years that the way you build suc­cess­ful, vibrant com­mu­ni­ties is not nec­es­sar­ily by cater­ing to the “masses.” Rather, cater to the hard-core users. These can be your evan­ge­lists– the users that influ­ence oth­ers to use your prod­ucts. The big prob­lem is that many com­pa­nies don’t know who these peo­ple are. Our approach to social media was heav­ily influ­enced by the online gam­ing indus­try. We actu­ally built our soft­ware as if it were a game such as “World of War­craft” or “Quake.” The same rea­sons why peo­ple play these games for hours and hours a day can be applied to enter­prise soft­ware communities.

For exam­ple, the con­cept of online rep­u­ta­tion can be a pow­er­ful cat­a­lyst for cre­at­ing active par­tic­i­pa­tion within a com­mu­nity. We track over 100 dif­fer­ent met­rics for any given users. For exam­ple, the num­ber of posts, page views, how long they visit the site, what peo­ple think of them, etc.

We build for our cus­tomers a rank­ing sys­tem that is hier­ar­chi­cal, not lin­ear. It takes all of these met­rics into account to build rep­u­ta­tion. In the case of the woman on AT&T, when she started in the com­mu­nity she was a “new­bie” and her name was in black like most of the other com­mu­nity mem­bers. As she built her rep­u­ta­tion by help­ing other users, her name changed to red, then appeared in bold, then had an icon next to it. With each of these rep­u­ta­tion “upgrades,” she received more priv­i­leges, was invited to give beta feed­back, got access to exclu­sive parts of the site, and more.

This rank­ing is power and sta­tus within the com­mu­nity. She might have a nor­mal job like any­one else, but when she goes on this com­mu­nity, she is revered by her peers. Com­mu­nity mem­bers look up to her and ask her spe­cific ques­tions. In an online com­mu­nity, every­one starts out equal. It doesn’t mat­ter if you are a CEO or a high-school stu­dent. The only thing that sets peo­ple apart is the rep­u­ta­tion they have earned and the con­tent they pro­vide. Now that you can iden­tify these super-users, you can reward them and give them incen­tives so they will stay. By build­ing up a base of super users that will help evan­ge­lize your brand, you tap into an extremely moti­vated group of peo­ple that will do much of the mar­ket­ing for you.

Tomor­row: Super Users, and how they can help drive cus­tomer loyalty…