Boosting Acquisition, Sales and Product Adoption with a User Community Program
Investing in a community program pays off
In 2011 and 2013 I was co-organizing a global summit for the members of the Google Top Contributor Program. We invited and flew-in around 600 community program members supporting all Google products from Gmail, Maps to AdWords from 46 countries. These users spend 3 days at Google headquarters in Mountain View with plenty of attractions and training organized specially for them. All paid by Google. I won’t be revealing the exact numbers but you can imagine that this must have been quite a significant cost for Google, who is investing in organizing such an event on a bi-yearly basis.
Google is not the only company investing in community programs. In 2013 I have also attended the HP’s Social Support Summit where 200 of the top HP community users were invited to Disneyland in Orlando, while in 2015 Airbnb hosted its Airbnb Open event for 6000 hosts in Paris, and Salesforce is offering their Salesforce MVPs (the selected members of Salesforce’s community program) first row and a VIP treatment at their yearly Dreamforce conference.
So why would companies like Google, Salesforce, Airbnb or HP invest hundreds of thousands of dollars in making their power users happy? The answer is simple — they know it pays off.
If you think about the accomplished internet and SaaS companies you will quickly realize that building a strong user community program can be largely attributed to their success. Amazon’s community of Amazon Vine reviewers helped them to attract 300 million users and 86% of all online shoppers, Dropbox grew its user base by 3900% in just 15 months with the help of their referral program. Both Quora and Reddit grew their value to~$1.8 billion while Airbnb to ~$31 billion, by placing a community at the core of their business.
From acquisition for marketing, revenue for sales, support-cost reduction for operations to product optimization and adoption for the product, community programs can deliver a value across various departments at your company. Let’s take a closer look at some examples.
Brand awareness and acquisition through social proof for marketing
“88% of customers trust online reviews as much as personal recommendations ” — Search Engine Land
88% of customers trust online reviews (source: Search Engine Land) and 63% are more likely to make a purchase from a site that has user reviews (source: vendesta.com). Others opinions about the company and product commonly referred to as the “social proof”, have a significant impact on attracting additional visitors to your website and converting them. On top of that, online reviews help your company to improve the SEO. This is the reason why many companies offer pre-paid Mastercards or Amazon vouchers to the customers willing to leave a review about them on one of the popular software review pages like G2Crowd, CrowdReviews or Capterra. However, engaged and properly nurtured community members will probably do more than just a review for your company.
A good example could be Spellbinders. From the beginning, they have invested in building an influencer program, where they influencers would create online content about the company, that within a period of 6 months helped Spellbinders to grow their brand awareness by 167%.
Another example is related to the previously mentioned 2013 summit that I have co-organized at Google. Four of our Google AdWords Top Contributors from Spain launched an initiative together and created a YouTube channel featuring a series of 22 videos focused on online advertising tips. As a result, they helped Google to drive awareness about AdWords across SMBs in Spain and traffic to the Google Partners Academy. Google Partners Academy saw a 232% increase in certified individuals on the Spanish market in 2014 and the training efforts recorded a 91% cost saving per attendee.
Reduced support cost for operations and increased revenue for sales
“Customers in customer communities spend on average 19% more ” — University of Michigan
The most commonly know and easy to estimate are the benefits that community generates for support and sales departments. Online communities have an impact on decreased support costs thanks to the 1:many effect. Your users provide answers to commonly asked questions and thousands of people can read these answers instantly online reducing the number of the same queries received through 1:1 channels like phone, chat or email. Communities also contribute to the improvement in the support turn around time since many of your users are available online on the weekends and as such can provide a more timely response to any incoming questions. As the research shows, your most engaged users also have a tendency to spend more than any other average user. Two good examples that come to my mind are from Barclaycard and Google AdWords.
In 2012 Barclaycard launched the Barclaycard Ring MasterCard, which was a regular credit card with community aspect added to it. The members of this specific card program had a say in the improvements to the product, were invited to join a dedicated community of card users, and had a close relationship and online discussions with Barclaycard company. As a result in just 10 months, this contributed to more than a $ 500k increase in gross income for Barclaycard. Barclaycard also identified that their community members were less likely to close their account and cancel the card than their non-engaged users.
In 2013 together with the Lithium Technologies, I have developed an ROI tracking framework for Google AdWords Community. We wanted to estimate the cost savings that online community was generating for us in terms of the support costs. The estimation that we came up with was that in one year the community generated $7.5 M in support cost savings.
We used two methodologies to come to that result: Force Multiplier and Successful Answer. For the Forced Multiplier (calculated as pageviews x resolution rate x cost/case) we took the benchmark resolution rate for B2B communities using Lithium Technologies as their community platform, which was at 20% (our actual resolution rate was between 45–60%, but we didn’t want to be over-optimistic, so we went with a benchmark instead). When using Successful Answer as the indicators (calculated as threads x % accepted solutions x cost/case) it was around $500k in savings but when using Forced Multiplier it turned out to be way more!
Increased product adoption and decreased product testing time
72% of companies use online communities to get product feedback and 67% to collect ideas for new products & features” — Get Satisfaction
Beyond marketing and sales, communities generate also significant benefits for the product department by helping to drive product adoption, improve access to product insights, optimize product development, and decrease the overall product testing time. In 2014 GetSatisfaction (one of the top 3 providers of community platform) surveyed 800 companies and identified that 72% of them use online communities to get product feedback and 67% use it to get ideas for new features. At my current company, SimScale, we engage our power users into the UX testing of any new features and gather their suggestions for the product improvements.
Two examples of how a community can have a significant impact on the product can be PayPal and Salesforce. PayPal started a community for small business owners with the goal of increasing PayPal usage across a group of 6 countries. They came up with and started promoting “ask an expert” campaign as part of which businesses could ask other experts (community power users) for advise and win an AdWords advertising coupon. As a result, they saw a 2.5% lift in the number of businesses making a first successful transaction with PayPal and almost a 2x increase in the number of transactions for the business segment that had activated PayPal in the last 3 months since the community launch. In just 2 weeks they had over 500 new posts and 100 000 views of these posts. 75% of respondents indicated they were able to find the information they were looking for and 66% of those respondents indicated they would have phoned or emailed if they had not found their answer in the community (support cost-saving).
When it comes to Salesforce, Erica Kuhl, who is the Senior Director of Community at Salesforce was actually able to prove the value of community across all their departments. At the beginning Salesforce community was part of their sales department, then marketing and later on it was finally moved to the product. The Salesforce product team needed a place to share their product ideas, collect feedback, and also quotes and testimonials for new releases. Erica was able to prove that the members of the Salesforce MVP program have a 33% higher product adoption rate and also spend 2x more than any other customer.
As you can see from the examples mentioned above, community delivers benefits across your whole business and actually can be a booster for the cooperation across the departments, connecting them into one ecosystem, where the benefits are shared.
I would love to hear about other successful community stories. Share them in the comments.
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