Social Network Styles: What Models Can You Choose From? - Customer Relationship Management

There is no one form or style of social network. Kids use social networks through Club Penguin and Webkinz by the hundreds of thousands. Baby boomers and seniors can use TeeBeeDee to meet their generational needs. Members of the real estate industry (not just agents) use ActiveRain, which had more than 150,000 members in July 2009. SAP has SDN, run by the talented Marco ten Vaanholt, with over 1.3 million SAP software developers. There is even a social network ensconced on Facebook for Victoria’s Secret PINK line of clothing that went from 390,000 fans in June 2008 to 1,252, 714 fans in June 2009—the increase presumably mostly male who got a glimpse at the photo gallery.

male who got a glimpse
Kids use social networks like Club Penguin and Webkinz (Source:Morgane
Murawiec, Hannah Hartley, Jenna Hartley)

The use of social networks is mainstream—time to get used to it. According to the Pew Internet Study on American Life, as of December 2008, over 35 percent of all adults had a profile associated with one or another social networking site. More germane, Nielsen Online in their March 2009 study “Global Faces on Networked Places” found:

  1. The fastest growing sector for Internet use is communities and blog sites, with a 5.4 percent increase in a single year, more than any other category.

  2. Member communities reach more Internet users (66.8 percent) than e-mail (65.1 percent).

That’s remarkably important data because, though still a primarily young-generation phenomenon, this reflects how we are experiencing the transformation of how we converse, with a profound impact on business communications with customers.

As I’ll show you posthaste, there are several classifiable types ofnsocial networks you should be aware of when contemplating a CRM strategy. Some are for dealing with customer issues, some are for marketing or the creation of sticky loyal customers, and others drive revenue directly. Each of them is potentially worthy of inclusion in someone’s business model—possibly yours. But don’t just assume any are worthy. Decide whether or not a social network is in your interest and which ones work for you, given your strategy.

“Participating in the Community of the Consumer”
I love that phrase. That’s the way Jim Keyes, Blockbuster CEO, described their Facebook group, which is, for the most part, the kind of community that you see most commonly right now. There are dozens of businesses using the most popular social networks to create groups, or pages, or fan sites to develop an external (beyond their own firewall) community. They are going to where the customer lives, but not necessarily where they shop. E-commerce is not Facebook’s strong suit.

In creating a Facebook group for your organization, you’re bankingn on a number of things:

  • That your customers actually use Facebook
  • That they can be informed via the Facebook tools of the existence of your group, in addition to your own normal communications channels
  • That they will find what you are providing to be of enough interest to make your community a regular stop when they are logged in to Facebook
  • That they will opt in to being updated about the continuing activities of your community
  • That they have no objection to Facebook owning the knowledge of their activities in your group as an asset and as part of their Facebook “customer record, ”also known as their profile

The benefits of these external community pages can be well worth it if you are willing to accept that you don’t control the source—in this case, Facebook. Marketing and loyalty are areas that profit from this kind of external community. Customer service can be served by these communities, though Facebook pages are not necessarily the best vehicle for that. There are sites like GetSatisfaction that provide external customer service communities created by either the customer or employees of the company. Additionally, companies like TiVo have seen the value in Facebook as a supplementary site for garnering and capturing customer service issues and data.

Things Go Better with Facebook:Coca-Cola’s Fan Club
Coca-Cola established their Facebook fan page in September 2008 and as of July 2009 they have recruited 3.4 million fans. Actually, this isn’t entirely accurate. What they did was find a page that had been created by a couple of 29-year-old Coca-Cola fans and, rather than sue them (which is what one of the youngsters feared), instead worked with the two fans to build the page up. But this wasn’t a case of buying the page.The creators became an intimate part of the continued development of the page. Coca-Cola had a savvy understanding of the benefits and the limitations of a Facebook group. They understood that Facebook was a site that their customers used, not one that the company owned. Coke wanted to be unobtrusive and leave it as a “fan club.” While I’d say that they aren’t unobtrusive any longer, they have been entirely successful because of their understanding of how Facebook works andtheir intelligence when it comes to collaborating with their fans.

While the founding fans still use the pages, Coca-Cola has a wide range of interactions on the page. They use it for promotions. They track the conversations of their customers through the postings to the Facebook wall and to the discussion groups. They give fans “exclusive sneak peeks” at things like he Coca-Cola iPhone Facebook app, which makes those fans feel like they are on the inside of something.

When it comes to the visual arts, they don’t just have generic or random photo uploads. They wield photos like artists use brushes. One album is an archive of historic Coke photos evoking nostalgia. Another is an album of Coca-Colaemployees celebrating a birthday—Coca-Cola’s—but as informal shots at a beach. They also allow fans to upload their own Coke-related photos to the site.

Think of what kind of brand image is projected in just the way the photo archives are used. In essence, it says, “We are a company with an immensely proud tradition that not only can stay current with the contemporary trends, but are alsopersonable and intimate with you, our customers. We want you to know us and we want to know you.”

The brilliance of the fan page doesn’t stop with photos. If you look at the Wall updates, they are in Italian, French, English, Spanish, two or three languages I can’t figure out, and even when in English, reference Coke in Macedonia, Thailand, Romania, and France. “I’d like to teach the world to sing, in perfect harmony.”

What the brand leaders at Coca-Cola, particularly the director of worldwide interactive marketing, Michael Donnelly, realized is that if you let the fans control their own conversation and support it, you can build something substantial and engender advocacy in ways that weren’t even a glimmer several years ago. What that translates to is 3.4 million fans, the second largest fan “club” onFacebook, second only to President Obama with over 6.4 million.

Facilitated User Communities
These are managed communities. The setup, administration, and facilitation are done by a third party. They are private. The membership is mostly invited. These are not the “damn the torpedoes, full speed ahead” kinds of sites that many of the others are. Even those behind the enterprise walls are often open and public, just administratively controlled by the company that created them. These aren’t those. These are planned neighborhoods, often whose primary purpose is to gain insight into customers.

Typically, they are organized around a specific topic. They can be communities that exist for an explicit time and delimited purpose or communities of interest for a longer duration. Their differentiator is that these private communities are carefully managed. Some of the characteristics:

  • The size of the membership is restricted.
  • The members are specifically chosen according to segmentation or other demographic or even psychographic information.
  • The community is moderated by experienced facilitators who, while not
    intrusive, are still managing and directing the conversation, though not to any particular conclusion because that would taint the purpose.
  • The community’s owner can be visible or not. The moderators always are visible.

Facilitated communities can be expensive because of the labor time involved in moderation of the community. The upside is that they are remarkably good for either providing long-term support for networks that need the interaction and some direction on how that interaction should occur or for short-term insights into particular areas or problems. The latter use facilitated discussions to capture the data they need to make key product or services decisions.

But that’s also where the most significant downside comes in. Pharmaceutical companies have been known to create these facilitated private social networks around a disease they have some drug treatment for or around the drug itself. But rather than let it be known that they own the community, they instead stay in the background observing, something like using one-way glass in an interrogation. The question arises, is that ethical? Would you want to be watched and your discourse harvested without knowing that there is an interested company behind that one-way glass? Not me.

That said, don’t rule this form of community out—either as a longterm option or an outcome-based social network. The ethical issues aren’t applicable to the bulk of them. The value is clear if they meet strategic needs.

National Comprehensive Cancer Network
The National Comprehensive Cancer Network (NCCN), an alliance of 21 cancer care centers, initially collaborated with premier facilitated community builder, Communispace, to build a private network that was for first-time cancer patients at all stages. The idea was to provide a mutually beneficial environment—a community—where cancer patients could express their worries, concerns, and ideas without fear and without being judged, while also providing a place where the care centers could learn how to improve their care to the patients. There were 350 patients chosen for this private network, based on studies that identified what it would take to optimize the discussion and provide the strongest mutual support.

The community was designed to calm—the colors of the site being soothing, for instance—and to develop intimacy between the caregivers and the patients, and the patients with each other. There was 24/7 access, so no one was ever alone. At first, the site itself was administered and facilitated by Communispace, which is what Communispace does.

Insights gained from the caregiver-patient and patient-patient discussions led to dramatic changes at the 21 centers. The range of improved patient experiences go from preadmission testing to clinical trial participation to oral therapy compliance and on to psychosocial programs. This was so successful that NCCN launched two more communities, one for late-stage cancer patients and another for early-stage cancer patients.

NCCN is important because the success was based on mutually derived value, the hallmark of Social CRM strategy and purpose of an enterprise social network. The patients were supported by each other, and they had access 24/7 to experts so that they were never unsupported. As someone who has been through the process with my wife’s successful fight against breast cancer in 2004–2005, the value of access to information and support is an almost incalculable benefit in the fight to beat that horrible disease. The more you know, the better the chance to beat it.

This is a somewhat dramatic but important example of how communities can provide value to both sides—even when they aren’t Facebook or LinkedIn.

Community-Based Businesses
The growth of communities and social networks has been instrumental in supporting the development of new business models that have objectives based on the growth and evolution of the communities rather than the more traditional numbers that you see from accounting departments. The concept is directly in line with Social CRM’s fundamental tenet:value and values are given, and value and values are received. The scions of the new social networks have often had trouble figuring out what kind of business model will yield them revenue and profits. Witness Facebook’s constant struggle for revenue. However, community-based businesses, such as community-based retailing, have no such issue. They have proven to be immensely successful, as we can see in the case of Karmaloop.

Karmaloop
Karmaloop is one of the most innovative clothing retailers in the world. Founded in 2005 by Greg Selkoe, they have grown to well in excess of $20 million for reasons that will become apparent. Rather than an e-commerce site, they callthemselves, rightfully, a “community of style.”

More of the data first. They have their own clothing line called the Sons of Liberty. They have only one store that I think, given the name of the clothing line, you can make a reasonable guess as to its location. No, not Philly. Boston. They have a community of nearly a million members as of 2009. Their community is skewed toward young, hip Gen Yers who are web-savvy and love to buy stuff—which is just about all of them.

Karmaloop gets community-based business. They are masters of how to implement community retailing with enough success to be the poster child for a contemporary Social CRM success story—without using any CRM software, though they do use software, obviously.

Karmaloop engages their community. They provide a location to get the hippest big brands like Adidas and Nike, and they also use a significant amount of their web real estate to give independent designers a place to hawk their ideas and their wares. In June 2006, they created the Kazbah, a mini-mall of 45 “stores” chosen by Karmaloop that gave their customers a place to sell their independent brands. Selected customers can peddle their wares, and Karmaloop provides an e-zine that highlights the independent vendors to the Karmaloop community.

If that’s all there was, it would be cool, but it goes so much further. They have KarmaloopTV, a web TV show devoted to fashion trends. In 2008, they created an invitation-only network for trendsetters in fashion, Jungle Life. While I think they could have done better with the name, the idea is spot on. You become a trendsetter in a private social network within a community. Acceptance into Jungle Life guarantees you reputation and influence as a trendsetter (at least within Karmaloop), which of course was the plan from the get go.
Community-Based Businesses
Karmaloop community-based retailing

But the ne plus ultra for Karmaloop is their street teams. Street teams are usually teenaged kids who get paid for slapping up posters for concerts or other events all over town. But Karmaloop has taken the idea of street teams to another realm entirely. Their street teams are 1 percent of their community members, roughly 8, 000 young souls, who function not just as evangelists/advocates but as part of an extended sales force.

When a community member becomes part of the street team, they are given a unique identifier that they will use for all transactions, including purchases they make, or purchases they convince others to make, or uploading a video. Not only does the street team member help sell, they are providing rich user-generated content for the Karmaloop site and adding to the discussion by uploading those videos, pix, and comments on the styles, techniques for selling, great stories of their street team work, and questions they need answered. In other words, they have an unadulterated sense of community which has been translated into rewards for both company and customer. Interestingly, in this model, the company and the customer are symbiotic extensions of one another.

In return for this yeoman work, they get discounts and points that can be redeemed for cash and clothes. They don’t only get them for the sales, but also for recruitment to the community and community participation.

The street teams, the 1 percent of the community who actively participate in Karmaloop sales and recruitment, have been an enormously important part of Karmaloop success. If you include what the street team members buy themselves in combination with the sales they generate, the 1 percent generates 15 percent of all Karmaloop revenue. That’s eye-opening stuff.

You’ll note that, so far, I haven’t mentioned software. However, that isn’t to say that they don’t use software to support this new business model. After all, what would Social CRM be without software? Karmaloop uses MyBuys, which generates personalized offers based on customer preferences and browsing behaviors. For example, if you indicate a preference for Adidas, personalized offers will be sent to you via e-mail or RSS. If you’re on the site and you (thank you, cookie) come in from Canada and have spent time looking around at T-shirts, you might see personalized offers and panels on the right side of the screen for Canadian T-shirt companies’ offerings. There was an increase in successful e-mail conversion of 220 percent in 2007 and according to Greg Selkoe, a lift uptick of 3 percent. Software can help.

Community retailing isn’t only done by Karmaloop. It’s done with a great deal of success by like-minded T-shirt company Threadless, skewed to the same Gen Y demographic and similar in concept. What it proves is that communities and social networks are not only about marketing and customer service;they can be part of a successful sales and revenue model if you think outside of the box.

DIY, No Not DUI, Communities
I’m not going to dwell on this kind of community. They are the do-ityourself communities best exemplified by Ning. Their idea is simple. Come in, sign up, and you have the tools made available to create a community/social network according to your heart’s or business’s desire. Ning in particular, headed up by the extraordinary Gina Bianchini, had, by March 2009, over 200,000 active social networks (out of 700,000 total created networks), with 2.4 million members. Other numbers that just make Ning’s success all the more obvious:also by March 2009, each day 2.6 million individual pieces of content—photos, blog posts, etc.—are added. The site had 2.7 billion page views that month and nearly 3, 500 new social networks were created each day. They had 83 social networks using the keyword “CRM” alone. However, most of them had between 15 and 50 members.

Ning itself wasn’t that immediately profitable. In early 2009, they were making $55 per month from each of the 12, 000 social networks who bought premium feature access. While they have enough data to make it very interesting to advertisers, they don’t discuss much about their financial model or their plans.

Is this where you’d want your enterprise social network to reside? Probably not. Ning lacks the administrative and security features and the controls you’d need to establish a truly robust social network for your customers or for internal collaboration. But this model can have business value. Jay Dunn, the VP of marketing at Lane Bryant, created a Ning social network that he calls SuperGroup with roughly 200 approved members. While it isn’t an official corporate social network, (Lane Bryant has Inside Curve) the members who represent retail industry leaders and other key parties can converse, link to other sites, push their feeds into the community, track each other’s activities if they want to, see what each other are reading, blog—you name it. While this is Jay’s network, what makes it valuable to Lane Bryant is the ability of the members of that network to get to know a member of the senior management of Lane Bryant and to provide an informal channel to Lane Bryant on preferences in clothing, for example, or issues of marketing in the retail industry or to just break down formality. What makes it valuable to Jay is that there is a forum for retail leaders to discuss how to improve their businesses that provides an informal channel where there is no competitive stress to talk over the ideas and to get to know each other. Lane Bryant by inference becomes known as a leading edge company and Jay as a cutting edge thinker. All in all, a win-win for Jay and Lane Bryant.

By the way, there is a CRM at the Speed of Light 4 social network on Ning if you want to participate in the discussion, currently by invitation only, though I may open it up soon. E-mail me at paulgreenberg3@comcast.net or go to the McGraw-Hill site for the book and let me know you want to be a part of it and I’ll send you the invite you need. Access is everything, isn’t it?

Outcome-Based Social Networks
Even though the name outcome-based social networks (OSN) is of my own creation, I have to give credit for the concept and inspiration to Anthony Lye, Oracle’s CRM SVP, whom you met in the electronic chapter on CRM leaders and will see more of in the chapter on Sales and Marketing. I had a conversation with him on the phone in 2008 and he said something very close to this:

We shouldn’t distinguish between corporate and consumer social networks. Social networks are containers for a series of activities by people—a container across social, geographic, company, and other boundaries. They can exist for years, or for a few minutes, hours, or days. It can be around a marketing event, a service request. Basically, a social network is a container that drives meaningful outcomes.

This is a really important concept. Most people see social networks as something that has permanence and at the same time involves investing in long-term efforts to add to content or to increase membership. But that isn’t necessarily the way they always work. Motivations for the creation of the social networks are different, and the benefits derived by business from the social networks can vary widely.

Outcome-based social networks are often organized around an opportunity in sales, an engagement, or a particular transaction or interaction that has a limited lifespan. Lotus Connections provides their wiki-like functionality around what they call activities, which are not wikis with permanence but outcome-based social networks that are used for a project and, when done, archived.

Don’t underestimate the value of this kind of network. Bad thinking about how you are going to engage your employees—or more germane to this book, your customers—leads to communities in a dead zone. For example, Ning has 700,000 communities of which 200,000 are active, which means 500,000 are either whimsical or unsustainable. I’ve built communities that had a specific purpose using wikis as the vehicle;one was for the definition of Social CRM. When that’s defined to the community’s satisfaction, the planned outcome will have been accomplished and the community members will disperse.

It’s really no different from an audience at an event. I spent 72 hours at Woodstock in 1969 and listened to all 28 concerts. I suffered the rain, loved the music, didn’t sleep (even without drugs) for a second, met all kinds of people, had excited discussions around the music being played, offered undying fealty to my new friends and vows of permanent friendship after the festival were made. Then when it ended, I went home, slept for 14 hours, and never again saw anyone from there I didn’t already know before. The outcome-based social network of 600,000 at Max Yasgur’s farm was archived in my memory.

These networks are very valuable to business if conceived strategically. They should be used to support a specific time-delimited occurrence that needs to have intensive structured conversations to improve the possibilities of the success of the outcome. The value of the network is that the data from the conversation becomes part of the permanent knowledge base in addition to its efficacy while active. Plus it is part of a lasting record that can be pointed to as an example of best practices and success.

YouTube Symphony
One extraordinary example of an outcome-based social network was the YouTube Symphony Orchestra. This was an effort sponsored by Google, which worked with the SanFrancisco Symphony’s music director, Michael Tilson Thomas, and the London Symphony Orchestra. Composer Tan Dun wrote an original piece to be performed for the occasion. The idea was to create an orchestra that would not only perform live at Carnegie Hall in New York, but also on YouTube. The orchestra would be wholly recruited through YouTube auditions. Using a channel on YouTube for the aggregate community, videos of the potential members performing were uploaded;comments on everything from musical styles and technical aspects to the performance selections were posted. YTSO artistic coordinator Bill Williams, one of the critical on-the-ground drivers of this outcome-based social network and a principal trumpeter with ensembles such as the San Francisco Symphony and Santa Fe Opera, pointed out that until they did the physical dress rehearsals at Carnegie Hall in April 2009, they had never played together. One unique feature of this OSN was a mash-up of selected video entries of Tan Dun’s musical piece into a single video ensemble piece, which resides on the landing page of the symphony.

By June 2009, there were over 8.8 million views on the channel and nearly 40,000 subscribers. The interaction among the orchestra members and the subscriber/members was incredible and deep. One of the flautists, Nina Perlove, wrote, along with a video, “Nina Perlove looks at some of the places music was heard during the YouTube Symphony Summit . . . even after 8 hours of rehearsals! Please rate and subscribe and visit me at realfluteproject.com.” She had 3, 300 views and dozens of comments. Also note that this is linked to her own site/ network. It uses rating tools and RSS feeds to expand the connectivity of this social network. Often when you click on a subscriber’s picture it takes you to the individual member’s own YouTube channel or MySpace page.

Even though the community continues to exist, its short-term outcome was the April 2009 concert at Carnegie Hall. Its longer-term strategy was to use contemporary tools to introduce an audience not predisposed to classical music to that music. On all fronts it has succeeded.

Now do you see the benefit of outcome-based communities? These need to be a part of your strategic arsenal when it comes to a customer engagement strategy. The proof is in the strings, the winds, and the brass.

Communities of Interest
These kinds of communities pepper the socnet landscape. For the most part, they’re dedicated sites organized around a common interest. Television shows such as HGTV’s Rate My Space user community are representative. Rate My Space is a TV show run by Home and Garden TV that does makeovers for rooms in chosen homes. The Rate My Space community provides the forum for members to upload the photos of a room in their house they are proud of or not so fond of. The rooms are rated by members and commented on by members. Low rated rooms are chosen to be given a major makeover on the Rate My Space TV show. Members then can rate the makeover.

These communities can be as simple as a threaded forum, which, while missing a lot of the new social capabilities, are still places where customers congregate around a specific interest, whether it’s a social issue or a car they love or a service they hate or a team they root for. They can be as complex as HGTV’s community, which not only rates rooms but also provides tools to design and buy a kitchen or bathroom as part of “my space.” This is very much in the same vein as the innovative work done by Kohler for kitchens and bathrooms, designing, building, and financing a room—with Kohler products, of course.

These can be immensely successful communities if managed well. They can provide you with customers who want to congregate at your site and who will provide you with substantial data to enhance your knowledge of those customers.

KLM Clubs China and Africa have figured out how to make communities of interest work on behalf of their business.

KLM Club China and Club Africa
I haven’t had any occasion to fly on KLM, but they’ve been on my radar for a few years now. They’ve become one of my favorite airlines without having ever been on them, because of their award-winning communities of interest, Club China and Club Africa.

Clubs China and Africa go well beyond the ordinary service club that many airlines have. Typically, a service club will provide concierge services for VIP fliers. So, for example, if you’re a 1K flyer for United, you get increased miles for flying, priority check-in, complimentary upgrades, and so on. If you’ve flown 1 million miles over your life on United, then you get other things. But what you don’t have is access to communities of interest, which is precisely what Clubs China/Africa are.

What makes these clubs unique is that they appeal to a specific group of travelers who fly KLM to a specific location, and give the travelers the means to interact with each other in multiple ways. Take a look at Figure.

KLM Club China and Club Africa
KLM Club China provides value to and from the members

The benefit to the customer is wide and deep. Besides traditional services and free stuff, they rely heavily on the customers interacting with each other. As a member:

  • You can subscribe to their Twitter feed, which has over 2, 300 followers. What makes Twitter interesting is how KLM uses it, broadcasting Club China events (or Club Africa) on their Twitter feed, as well as information from other members such as “seeking employment” or “seeking local partner to do business.”
  • You can learn from the best practices on doing business in China that are posted to the club by other members.
  • You can look at the calendar and see what members are going to be where in China when.
  • You can arrange meet-ups in China or at any other locations where more than one member is congregating.
  • You can share your experiences on doing business in China by posting stories.

The business benefits for the members are obvious. KLM has benefited as well. The numbers support that. They now have over 15, 300 members from 100 countries in the two clubs combined. Their traffic is steady and consistent and, most important, sticky. For example in May 2009, Club China had 7, 000 unique visitors accessing 36, 500 pages and spending 3 to 5 minutes on the site each. KLM didn’t stop with this kind of success, though. The next month, they implemented video chat on the site. The customer’s and KLM’s mutual benefit was highlighted by a comment from one of the Club Africa members that said pretty much all that needed to be said, “I really appreciate it. It is beneficial to the airline and the travelers, has made Africans feel recognized as important to the KLM strategy and has helped businesses get new worthwhile contacts. Getting to know a person you would have not have had an opportunity to meet.” This is mutually beneficial business from a community of like-interested people. Social CRM indeed.

That’s the bulk of your community options. But that’s only about half of what you need to know. What else? How about what practices work to manage the community once you’ve realized that it is an important part of your Social CRM strategy?


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