Building Customer Communities: Powering Engagement to

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1 Building Customer Communities: Powering Engagement to Increase Registrations, Growth & ROI Companies are widely deploying customer communities to connect with customers. Spending on community technologies is expected to reach $1.3 billion by the end of However, in an age where customer attention is divided by multiple channels of media and technology, less than a third actually log in to communities and 70% of communities are predicted to fail. To nurture engaged users that sustain and grow customer communities, companies can use gamification to identify, reward and analyze the user behaviors that bring value to community members and encourage them to return. The strategic use of game, reputation, and social mechanics inspires contribution, sharing, and content advocacy move the needle on engagement and creates more customer advocates. Marketo, a global leader in marketing automation software, realized significant improvements in customer engagement within their customer community through such measures, including: 2x more behaviors, 67% more engagements, 51% more active members, and 10% more engagements per member. Building Customer Communities: Powering Engagement to Increase Registrations, Growth & ROI The Double-Edged Sword of Communications Technology Gamification Stimulates Engagement What Behavior You Drive Depends on Where You re Trying to Go Marketo s Community-Building Success

2 The Double-Edged Sword of Communications Technology The explosion of connectivity, media and technology that defines our current landscape is great for consumers, providing them with unprecedented amount of choice in the way they spend their time. It has also shrunk the average consumer s attention span down to a measly eight seconds. This presents an immense, paradoxical challenge to marketers and brands: with so many ways to talk to people, how do you get them to pay attention long enough to hear what you re saying? The answer for many companies has been to create online communities for their customers. Communities have become such a popular solution that spending on community software such as Jive, Lithium, Bazaarvoice, Drupal and others is expected to reach $1.3 billion by the end of Yet there s a problem: despite the fact that so many companies are turning to online communities, on the whole, consumers aren t. Research shows that only 28% of them actually log in to communities. 2 That s one of the reasons Gartner predicts that 70% of online customer communities will fail by Why aren t people using the community resources that companies have invested so much money in? The crux of the problem is that a community s value comes from customer participation yet customers won t participate unless communities provide value. (There s a chicken-and-egg problem for you.) Overcoming this paradox can be particularly valuable, because healthy communities provide four major benefits: energized members, loyal customers, more sales opportunities and lower costs. And in order to maximize these, you need an engaged user base. Engagement encompasses Forrester s four I s : INVOLVEMENT INTERACTION INTIMACY INFLUENCE Companies often wrongly assume that they just have to build a community and it will magically attract customers, who will interact with each other and self-sustain the community. So the real question companies need to answer is, How do we motivate customers to engage in communities so they become vibrant and valuable? 1 U.S. Online Community Software Forecast: Strong Growth Despite Recession. IDC, Michael Krigsman, Who s accountable for IT failure? (part one), ZDNet, (April 16, 2012). 2 Top 10 Issues With Proprietary Web Communities. Gartner, November, The 3x5 Approaches to Peer-to-Peer Communities for Social CRM. Gartner, February 7, 2012.

3 Gamification Stimulates Engagement One of the best ways to improve the four I s is through gamification, the insertion of game dynamics and mechanics into non-game behavior. Gamification as a marketing strategy involves more than just slapping some badges on a user interface and calling it a day. It involves a combination of game mechanics, to provide instant feedback and rewards to customers for performing valuable behaviors; reputation mechanics to allow customers to elevate their status through things like leaderboards, levels and tracks; and social mechanics, to give customers context about the people and content that matter most to them. To increase involvement, or participation, you want to encourage return visits and new registrations through reward systems such as those that incentivize reading, commenting, rating products, uploading, and asking and answering questions in a discussion, to name a few examples. To boost interaction, rewards must encourage visitors to spend more time with community content and brand offerings. Increasing intimacy involves immersing users in real-time interactions with one another and with the brand. Gamification can raise influence levels by, for instance, encouraging word-of-mouth referrals through group competitions and rewards for sharing content with social networks. The idea is to create an engagement loop of motivations that drive actions performed in exchange for rewards that, when earned, are signalled by achievements, which reinforce the motivations and so forth (see Figure 1.0). Figure 1.0 MOTIVATIONS Things like the desire for status, access, power or physical items; altruism; or the desire for selfexpression ACTIONS The valuable behaviors you need your community members to perform in order for you to meet your business goals (such as uploading content, sharing content through social media, completing surveys, watching ads, participating in events and more) ACHIEVEMENTS signal the completion of actions and earning of rewards they can be things like badges, trophies, recognition on leaderboards, VIP access to community areas or services or virtual good displays REWARDS Can be redeemable (such as discounts on products/services or physical prizes) or compiled over time to represent status or progress

4 What Behavior You Drive Depends on Where You re Trying to Go So what actions do you foster in your community to make it thrive? That depends upon your business goals for the community and what you want your users to get out of it. For an example, let s take B2B marketers. As you can see the accompanying graph, their activity in communities depends upon whether they re using the community as a shopper (searching for a solution to a business problem) or as an existing customer (already engaging with a solution to their problem). Whereas shoppers are much more likely to consume information and content within a community, existing customers are more likely to contribute of their own along with rating and sharing other people s content. Clearly, getting existing customers to create, circulate and promote content is going to be the primary driver of growing and sustaining a community of B2B marketers, for two reasons: first, because they provide the fodder for fellow customers to interact within a community, and second (perhaps even more importantly) because they create the content that brings new members prospective customers into the community. So if your customers are B2B marketers are you re designing an engagement program for your customer community, you re going to want to motivate them do the things that lead to their creating content and interacting with and sharing others content.

5 Marketo s Community-Building Success This is precisely what Marketo, a global leader in marketing automation software, did in trying to foster engagement within its customer community. Marketo s award-winning products, used by over 2,500 customers, enable companies to streamline their marketing processes, deliver more campaigns and effectively nurture leads. They had launched their customer community in 2010 to give their users (customers and partners) a place to connect, leverage each other s expertise and share best practices. Though they saw success with their community, they wanted to make it even better. As a company they wanted to generate revenue, increase customers skills, drive customer maturity, reduce support costs, and foster user portability. They wanted their customers to be able to grow their reputations, build their networks, receive rewards and gain knowledge. On top of their existing gamification program, powered by The Behavior Platform by Badgeville, they designed and implemented new advocacy rewards for community members to earn and contests in which they could participate. THE ADVOCACY REWARDS: Submit a Revvie Award Refer a Friend Review Marketo Sign up to be a Reference THE CONTESTS: Photobomb 2nd Birthday Refer a Friend RESULTS HAVE BEEN IMPRESSIVE: 2x more behaviors 67% more engagements 51% more active members 10% more engagements/member Review Marketo Customer Referral Marketo Review Conclusion Customer communities can be incredibly useful solutions for corporate brands, allowing them to bring customers together to connect with and learn from one another, deliver the company greater customer loyalty and brand advocacy, more sales opportunities and lower support costs. The solution is gaining widespread and rapid adoption among companies. But a functioning, worthwhile and valuable community requires engagement from customers. Gamification provides that engagement by giving companies the tools to incentivize, reward and analyze the user behaviors that lead to community growth and sustainability. ABOUT BADGEVILLE Badgeville, the #1 gamification and behavior management platform, enables companies in virtually every industry to influence and measure user behavior. World-class businesses in more than 20 countries use Badgeville s Behavior Platform, an award-winning Platform-asa-Service (PaaS) solution, to increase customer loyalty, user engagement, and employee performance across an organization s websites, mobile apps and enterprise applications. With over 200 customers, Badgeville brings Game Mechanics, Reputation Mechanics, and Social Mechanics to industry leaders and innovators including Deloitte, EMC, Oracle, Autodesk, Bell Media, NBC, Universal Music, Recyclebank, VMware, and more. Founded in 2010, Badgeville is based in Menlo Park, California and has offices in New York and Europe. To learn more or visit