Tribe vs. market segmentMuch of the discussion up to this point has been within the context of advocacy—we have attempted to show how and why fundamental social, economic, and technological forces are combining to change the nature of companies, and how companies engage with their customers, employees, members, and business partners. We have presented all manner of evidence (behavioral science, economics, history, and logic) to make the case that the Hyper-Social shift is inevitable for businesses, and is therefore important to understand and master.
Indeed, during the course of our research, we have encountered many companies (hundreds, as a matter of fact) that have already begun the Hyper-Social shift. For many of the reasons discussed earlier, these companies have reached just the same conclusion, and have confidently and wisely begun to craft their visions of what Hyper-Social organizations might look like.
And, in the course of studying these companies in our Tribalization of Business research, we have determined that there is a disturbingly high rate of incidence of certain mistakes. Indeed, it almost seems as if the companies making these mistakes are reading from the same playbook, given the striking preponderance and repetition of their missteps. We’ve studied all the bad advice floating around regarding the Hyper-Social shift, and in doing so, we’ve noticed several patterns of thought. There are seven main myths on the subject that many well-intentioned companies act on, to their detriment. Several of these myths are in direct conflict with the Four Pillars of Hyper-Sociality:
Tribe vs. market segment
Human-centricity vs. company-centricity
Network vs. channel
Social messiness vs. process and hierarchy
In this chapter, we will discuss each of these myths in order to highlight and flag philosophies, attitudes, and biases that can hamper your successful Hyper-Social shift, and to provide some alternative solutions. So without any further ado, here are the seven key myths we’ve discovered that lead to Hyper-Social pitfalls.
The mere presence of an online venue does not automatically create a community to populate it. That’s why the Internet is littered with communities that are devoid of any recent activity and blogs with no comments that were last updated months ago. You surely have seen some of these virtual ghost towns. After a while, they fail to meet the expectations of the companies that set them up, and they are usually taken down. Examples of defunct communities abound; our research indicates that “getting people to come back” is one of the key challenges companies face. There are also plenty of examples of projects that have not been taken down, even though they are clearly not experiencing much success. One such community at the time of this writing is a computer manufacturer’s small business community, which has been around for years and has attracted only a little over 600 members. Another is a large bank’s community, also focused on the small business market, with 4,700 members who seem to have nothing to say to one another in the forums.
Organizations make this mistake all the time—they think that if they build online communities for their target customers, people will show up and populate the forums, the blogs, and other content-related areas. What they miss is something that we reviewed in Chapter 4: the need for high-quality content. You need valuable content in order to get your communities going, and in most cases, you also need professionally developed content in order to keep them going. People are much better at reacting to existing content than they are at creating original content. Also, a typical community consists of 90 percent lurkers, and while lurkers may benefit you in some ways, as we saw in Chapter 11, they do not participate in the public forums and don’t help you create content that might provide value for the rest of your members.
The “build it and they will come” vision fails to materialize for other reasons as well. Because of a number of predictable (and correctable) mistakes that are chronicled in our Tribalization of Business Study, simply “building it” does not guarantee that anyone will show up. The first key attribute of successful communities is that they tap into a shared passion. Has the company identified a passion that users will want to tap into, or is it the passions of the company (its products and services) that it wants people to tap into? The ability to help others, according to the 500 companies we polled, is the second most effective community feature. In our experience, it is a rare management team that intuitively builds in this feature from the start. Should we, the company, be able to help customers? Sure. But what about customers helping one another? Well, that’s more unlikely, because then the company typically begins to worry about liability for giving wrong answers, or starts to get focused on who owns the solutions if it wants to sell them one day. Notice that the top handful of most effective community features are really Human 1.0 features, not things that a company typically thinks of when it starts to “build” a community.
This myth also includes a little bit of organizational hubris: we will build it because no one else was smart enough, or big enough, or rich enough to build it. News flash: there’s a huge online encyclopedia that, at last count in 2010, included more than 3.2 million articles in English alone, and that wasn’t built by any one person or company. It was built by a global crowd, and it didn’t need any company on whose behalf to build it. So think about the value you are really trying to deliver to your tribe, and then build accordingly. Maybe it is a platform for discussion, maybe it is a place to access great content, or perhaps cocreation is another option that the tribe would appreciate. Put up a lot of good content and information about the motorcycles that they love or the small entrepreneurial companies that they run, and then let your visitors add to it, change it, and take it over.
This is probably the second-largest cause of Hyper-Social program failures. In a typical “not invented here” scenario, company executives first read or hear about the amazing benefits that other companies have gained by leveraging social media and communities (of course, they never hear about the failures). Then they get the sense that their company is falling behind, and they “empower” their marketing team or their IT team to initiate Hyper-Social programs. The knee-jerk reaction of those who are given the task of setting up the Hyper-Social programs is to build it on their platforms—the company Web site or the e-commerce site. They never bother to do an ecosystem scan to see whether the tribes that they might want to engage with are already congregating somewhere else.
If your tribes already have a home, trying to get them to move is akin to focusing your whole go-to-market strategy on switching customers who use competitive products. It can be done if your competitor is offering subpar products, but it is rarely a successful stand-alone strategy. Similarly, trying to get an existing community to move to the site you’ve provided is not likely to be successful. The endowment effect, a well-documented Human 1.0 trait wherein we overvalue what we have and undervalue what we don’t have, can be blamed for that stubbornness.
The independent TiVo customer support community is a perfect illustration of the not invented here syndrome (http://www.tivo community.com). While the community had thousands of fanatic users early on, TiVo never really put this amazing word-of-mouth engine at the center of its customer-facing efforts (it had more than 40,000 members in 2003, and at the time of this writing that number had grown to over 215,000). TiVo did not ignore it—some of its employees participated in the community activities, and TiVo derived many product enhancements and innovations from it. But it never built on this enviable Hyper-Social customer foundation, making you wonder whether it truly understood the power of Hyper-Sociality.
Recent developments point in a direction suggesting that TiVo probably never really got it. For some reason, it decided to set up its own customer support community (http://forums.tivo.com/pe). We estimate that this community, which is more than a year old now, has fewer than 2,000 members. The place is devoid of passion and, in a lot of ways, devoid of the social element that makes the other community so vibrant. Why did TiVo feel the need to create its own community and, in effect, compete with its most avid fans, who were doing a superb job of providing online support? Was it to have more control? Was it so that it could mine more insights from the community? If so, it clearly didn’t meet its goal. Most people barely fill out their profiles, and the place clearly lacks the social interactions needed for great ideas to flourish.
If you ask your IT department to set up Hyper-Social programs, chances are that it will default to setting them up in its own environment. It’s in an IT department’s genes to want to control access, manage policies, protect the company from nefarious comments and malicious hackers, remain in charge of the data, and above all provide a secure environment for its users. It is also likely to start your Hyper-Social project the same way that many failed projects start—by first deciding on which technology to use. Technology, as we saw in Chapter 4, is not one of the four forces of increasing returns that make for successful communities. Rather than deciding on the technology to start with, companies should focus their energies on members, content, member profiles, and ease of executing transactions, as we saw in Chapter 4.
One company that avoided the not invented here syndrome early on was the $8 billion technology retailer CDW. At first it had its own customer community initiatives. Fortunately, it quickly realized that the people it was trying to reach were already hanging out together somewhere else. It closed their own initiatives and instead started engaging with the tribes where they were already hanging out. When we spoke with Mark Gambill, CDW’s CMO, he told us: “So, the evolution of what we did is that we’re now going to places where customers are engaging. We know where customers typically go in the small business community, and we’ll tap into those existing communities and understand how to get involved with them.”1
Sometimes your tribes will form into self-organized Hyper-Social environments, like the TiVo customer support community that we just discussed. Sometimes they will hang out in places that are hosted by vendors, as is the case with the American Express Open Forum (http://www.openforum.com), one of the few successful small business communities. If you are MasterCard or Visa, chances are that you will not want to engage in American Express’s small business community. But if you are FedEx, Intuit, HP, or Staples, why wouldn’t you engage with small business customers alongside American Express? Together you could provide more value to the community members. Your chances of success would also increase compared to going it alone.
Partnering is something that every Hyper-Social company should evaluate, because in most spaces, there is no room for multiple tribes with the same purpose. You see, people have limited attention, and they typically will not belong to more than one community with the same purpose. If there are multiple communities in the same space, the forces of increasing returns that we discussed in Chapter 4 will cause one of them to grow at the expense of the others, creating insurmountable barriers to getting off the ground for other similar communities. We are not suggesting that there will be only one successful small business community—on the contrary. You could have niches, such as a women-owned small business community, an independent bookstore small business community, or a small business community centered on common technology usage, like Intuit’s Partner Platform. What we’re saying is that unless you can further subsegment the tribe, we don’t believe that you can have multiple successful independent bookstore small business communities.
Companies are increasingly looking at the possibility of partnering. In the Tribalization of Business Study, we found that many organizations considered partnering with existing communities (25 percent), complementary vendors (13 percent), or fans (20 percent). Of those that considered partnering, however, only 45 percent ended up doing it. We expect that number to grow as more dominant communities emerge on the horizon and executives start realizing that they cannot be Hyper-Social without partnering.
Many Hyper-Social efforts are too small to make a difference to the business processes that they are supposed to support. We can think of two main reasons for this. First, some companies have a culture of using test or pilot programs before launching broadly—it’s just something we have been trained to do in business for ages. The second reason why companies fail to scale is that they are chronically underfunding their Hyper-Social projects—especially from a human resources point of view.
Take the Marriott Rewards Insiders community as an example.2 It has a little over 10,000 community members out of 30 million Marriott Rewards members—a whopping 0.03 percent participation rate. Does anyone at Marriott seriously believe that a community with a 0.03 percent customer participation rate is going to make a difference in the business? Of course not. What if Marriott were to spend 5 percent of its advertising budget on the initiative—surely there would be a lot more people buzzing about the program. Travel, of course, is a tricky space, with TripAdvisor, a division of Expedia, looming as the elephant in the room. The point we are trying to make, however, is that most large companies would not think twice before dropping millions of dollars on an ad campaign. Yet they probably hesitate when it comes to their Hyper-Social plans—even though those plans have the potential to become predictable word-of-mouth engines.
For most organizations, it gets worse when it comes to allocating human resources to those projects. They forget that if they ask their customers and prospects to spend some of their social capital with them, those same people will expect reciprocity. Of course, if the purpose of the community was to gain market insights for product innovation, they could have gotten by with fewer members. In most cases, however, that is clearly not what the communities were set up to do.
If you rely on having tens of thousands or millions of customers to achieve your revenue numbers, you need Hyper-Social initiatives that are commensurate with those numbers. That is especially true if the purpose of your Hyper-Social activity is to amplify word of mouth to the point where it makes a measurable difference in sales. Let’s do a quick (overly simplified) back-of-the-envelope calculation to make our point. Let’s assume that you are a retailer with 1,000 stores that average 3,000 unique visitors a week each. If you want to increase traffic to your stores by 2 percent, on a weekly basis, you need to increase traffic for all your stores combined by 60,000 visitors. On a yearly basis, you need an additional 3,120,000 visitors at your stores. How many people do you need buzzing about your company in order to achieve that?
Assuming that the average number of people you reach every year through positive word of mouth from one satisfied customer is 150 (about three people a week), and further assuming that 30 percent of those who have been on the receiving end of these referrals will actually visit the store, and that 20 percent of those who visit the store will be won over and actually start buzzing like us, we find that every year, you will drive an additional 65 people to the store. In order to drive an additional 3,120,000 people to your stores, assuming a 10 percent active participation ratio in your community, you need 480,000 community members. (Considering the complex network effects that are at work in Hyper-Social environments, this calculation is going to vary wildly depending on the assumptions at work in each instance.)
The bottom line is that you probably will need more people than you thought you would. The good news is that achieving these levels of participation is not unheard of—think of SAP with its 1.5 million developers, or the IBM developer community with its 5 million registered users. Even the self-organized TiVo support community has more than 215,000 members. If your community is too small to make a real impact on your bottom line, you might as well scrap the project and redirect your budgets to other programs. That being said, and considering the long-term cost efficiencies of community- and social media–based business initiatives, you may be better off redirecting additional resources to scale your Hyper-Social programs to the point where they can make a real impact.
An interesting way for companies to have their Hyper-Social programs become part of the fabric of the processes they are intended to support and avoid having them being stuck in the pilot stage can be learned from Humana. It incubates its Hyper-Social programs in a cross-functional Innovation Lab for a given period of time and shuts them down after that—even if they are not adopted by the business units or functional groups. That is how the company embraced a successful Twitter-based customer service program. Humana incubated it in the lab for three months, after which it was adopted by the customer service group and made part of the main customer service process, where it belonged.
Another potential issue with pilot programs is that the conditions of the pilot may in fact give you little insight into what will happen when you launch a broader program. Unlike other marketing programs, say direct-mail campaigns, where the conditions for a test program are mostly the same as those for a broader program, that is not the case for Hyper-Social programs. Smaller communities, for example, will require a lot more moderation and professional content than larger communities. So if you start small, you may have to do things in order to succeed that you will not have to do with larger programs. You could also not do them and wrongly conclude that the program will fail because the test failed.
More injurious than a company’s decision to keep it small is the company’s resistance to the tribe’s decision to make it big. Networks, which is what tribes essentially are, tend to grow when they are successful (notwithstanding the sponsoring organization’s desire to “keep it small”). These community efforts can literally be killed by their success—there are not enough people working on the organization’s side to effectively manage, moderate, or facilitate the community, or the meager budgets run out before business cases can be made for greater investments. Companies may also fail to appreciate the real size of these communities because they measure only “active users.” We know of cases where a community was shut down, and the until-then-invisible tribe emerged and began running the community on its own, out of the view of the formerly sponsoring organization. One such example was a large imaging company that tried to shut down one of its printer communities, only to find the community continuing to flourish as a Yahoo! group.
“Our company has plans and strategies to engage in social media,” is what is usually said first. Then what usually comes a few months later is, “We don’t get any comments on our corporate blog,” or “Nobody seems to follow us on Twitter,” or the most common one to emerge from our Tribalization of Business Study, “Nobody engages in our community.”
When you engage in Hyper-Social activities, you are asking your employees, partners, customers, and prospects to invest some of their social capital with you. What they expect in return is a human, or preferably a group of humans, to engage with them in return, not some faceless corporate entity. Why would anyone want to chat with “Marriott” in the Marriott Rewards Insiders community, unless, of course, it was Bill Marriott?
Hyper-Social organizations do not agonize over what the corporate response is in a social environment—they realize that people want to interact with other people, and they allow and even encourage individual voices to engage on their behalf. They don’t presume that the company is smarter than the individuals that make up the organization.
While some companies succeed, many, if not most, fail in their corporate blogging initiatives. They fail not only because they are anonymous, hidden behind the name of their company, but also because either they have nothing interesting to say or they repurpose their press releases as blog posts, convinced that some people will find them interesting. They fail because what started as a project full of good intentions is all of a sudden falling by the wayside as people get busy—failing to realize that there is nothing more uninviting than a blog that has not been updated for months. They fail because they are primarily motivated by optimizing the firm’s natural search engine ranking, not because the firms want to be Hyper-Social. In fact, many of them are not social at all—they don’t link to others, they don’t comment on other people’s posts and tweets, and they never really seek to engage people. They mostly want to broadcast their corporate-speak-laden messages.
Sometimes they fail even though they do have interesting and engaging content. Take Unica, a Massachusetts enterprise marketing management software vendor that launched a marketing thought leadership community3 called the Marketers’ Consortium. The effort included well-known marketing thought leaders, people like Elena Anderson from Forrester and Don Peppers from Peppers and Rogers, who took on the monthly rotating role of moderator. The Marketers’ Consortium was closed after a little more than a year4 for lack of engagement and ROI. What happened here? It was a well-intended effort, pretty well executed, and with prominent thought leaders who had interesting points of view. What could the company have done differently to make the community succeed?
While it is usually hard to look back and make predictions on what might have worked, one of the authors of this book actually ran a similar thought leadership community for Microsoft for three years—one that proved hugely successful. The main differences between the two programs? One was Hyper-Social, the other much less so. The Microsoft community was launched with well-known thought leaders who were also popular bloggers (instead of analysts). Those people knew how to behave Hyper-Socially, and they had tremendous respect for one another. There was a strong sense of belonging among the group members, which resulted in a true group conversation, not just a series of points of view. The contributors were so proud to belong to this group of thought leaders that they also brought their existing audiences to the project. The other main difference was that the Microsoft thought leadership community was run as an editorially independent community that was totally disconnected from the firm’s corporate Web site. Perhaps if it had not been, it might have been perceived as another corporate initiative.
We frequently find the “my company is smarter than me” effect in the social media monitoring and engagement side of the business. Organizations will monitor what is being said about them, and then agonize over whether they are providing the proper “corporate” response. Did customer support reply to this installation complaint? Did PR respond to this comment about our CEO’s remarks during his latest public speech? Did we get anyone from development to engage with this product idea that seemed to catch fire on a couple of fan sites last week? While customers will not perfectly align their comments, rants, and reviews with the way you are organized as a company, you should not stress over which department will engage with whom. As we’ve said before, people love to get attention from other people. If they get it from more than one person, no matter what department those people are from, they will love you for it—even if the information they provide is not 100 percent helpful or accurate. As long as the information is delivered in an honest and fair exchange, people will reward you with their loyalty.
Another frequent mistake that companies make is banking on one program to solve all their needs. It’s not just companies like Wal-Mart, IBM, or P&G that cannot rely on a single solution to make a difference in their sales results. Everyone needs a balanced portfolio of programs: initiatives to increase word of mouth, improve product reviews, develop better products, and make customer service a better experience. You need to think about how to Hyper-Socialize everything that you do, including your products and services. And you need to extend Hyper-Sociality to all the platforms that your customers and prospects use, including gaming platforms, mobile platforms, car platforms, exercise platforms, and other entertaining platforms. Look at Netflix. Not only did it disrupt the movie rental business by changing the delivery paradigm, but it also leveraged the wisdom of the crowd through its $1 million Netflix Prize5 program to design a better product offering. And it found a way to embed Hyper-Sociality within its service by offering instant movie downloads to the Xbox gaming platform and allowing seven players to watch the movie simultaneously while chatting with one another over the Xbox Voice over IP channel. Note that Netflix did not invent anything new; movie watching has always been a social process. It just extended that social process to a new platform.
Nike is another innovator in this space. Using a Nike+ sensor in your running shoe, which communicates with your iPod, your iPhone, or a special Nike armband device, Nike+ allows you to track your distance, pace, and calories burned while you run. After your run, you can upload that information and share it with your social network. You can share your goals and your training calendar and set up challenges with your friends. As the Nike site puts it, you can see who’s “kicking butt and who needs a kick in the butt.”6 In effect, Nike turned what has primarily been an individual activity (most people run alone) into a worldwide social experience. The results: 35 percent of Nike+ members are new to Nike footwear, 50 percent of members use the site four times a week, and 93 percent of users said that they would recommend it to a friend.7 Like most other successful Hyper-Social organizations, Nike has dozens of Hyper-Social programs.
And herein lies the lesson: companies that are looking for the single Hyper-Social killer app will invariably walk away disappointed.
This is one of the most pernicious of all the myths because it distorts the very reason why a company might undertake the Hyper-Social shift—to profit in tandem with a more engaged group of human beings. The Hyper-Social shift should be based on the realization that your customers can now interact with you and others in the way that they always wanted to but couldn’t. The reason for adopting Hyper-Sociality shouldn’t be to exploit your customers in a new way, or to gain some new advantage over them. Companies that develop Hyper-Social behavior solely as a way to increase profits, thwart customers’ ability to communicate effectively with others, or serve as an alternative marketing platform are missing the message here, and are committing a foul that those who are paying attention will surely detect. And since humans are hardwired for reciprocity and fairness, they will surely communicate this information far and wide. The ardor with which people pursue crusades against companies, often to their own social or economic detriment, highlights this point.
The numerous boycotts of products and companies as diverse as coffee and cigarette manufacturers over the years point to the propensity of tribes to invest heavily in effecting what they believe is fairness. The documented phenomenon of tribes taking actions against third-party surrogates when they cannot reach their intended targets directly is a cautionary tale of what may occur in the future as companies become increasingly connected, but complacent with regard to the actions of those people or organizations that are associated with them.
This distortion of Hyper-Sociality can be explicit or subtle. Some organizations view social media and the trend toward Hyper-Sociality as nothing more than an affordable way to engage in legacy business activities such as couponing, marketing, and advertising, and will act in ways that are clearly inconsistent with the Four Pillars of Hyper-Sociality. Other leaders genuinely miss the logic behind Hyper-Sociality, and view it primarily as a set of new social media tools that need to be mastered for their benefit. These managers fail to discern the radical change that Hyper-Sociality brings to communications with tribes and to the way in which their companies should operate.
From our experience, a surprising number of companies start their Hyper-Social shift for the right reasons and with the right philosophy about human-centricity, but then slide into a mindset ruled by “What’s in it for my company?” rather than “What’s in it for people that would make them want to hang out with my company?” Time and again we see this metamorphosis take place, and it always has an unfortunate ending for the company. We often see companies shift into a “What’s the return on investment?” frame of mind, in which business is a zero-sum game and giving the customer something of value is contingent upon extracting an immediate return.
A good rule of thumb to employ against falling victim to this myth is, check your terms of use statement. Would you feel comfortable pointing it out to the community members and having them comment on it? Also, as Don Peppers, cofounder of Peppers and Rogers and author of The One to One Future, recently reminded us:
I think that in the era of social media you should always step back from whatever marketing policy you’re considering, whatever kind of new idea you have and ask yourself, “Gee, if this became public, would it be an embarrassment to us? Would we be proud of it? Would some of our customers hold it against us?” There’s a really good chance that whatever your company is cooking up will become public in today’s age and if you want to protect yourself then you really have to have clean hands, not just a good alibi.8
Management should demonstrate a clear vision as to why its company is embarking on deeper engagement with its customers, partners, employees, and detractors alike. The message needs to be communicated clearly and often that we now operate in a Hyper-Social economy in which authenticity, fairness, and transparency are rewarded, and that our human customers must be at the center of everything we do. To do anything less is to invite this reflexive corporate grasping for advantage.
This chestnut appears repeatedly, usually during the same conversation in which the organization that is sponsoring the community tries to justify its intention to act in an anti-Hyper-Social fashion. This is a good point at which to recall that there are a number of ways to define brand, but most definitions acknowledge that the customer has some input. And given the clear increase in the power of humans to discuss products, services, and their experiences with your company, it is logical that the net balance of power in brand creation and maintenance has shifted permanently to the humans and away from the corporate owner. Notwithstanding this clear logic, it is surprising how many companies cling to the belief that by resisting the Hyper-Social shift, they are somehow ensuring the health of their brand, affirming that the customer cannot be trusted with the brand and that a brand is an asset that can be safely sequestered somewhere.
This idea stands in stark contrast to what Beth Comstock, global CMO of GE, told us about her thinking about marketing today: “It’s this idea of letting go. I really learned this from my NBC experience. Your customers have a lot more access to things that you don’t have control over and you’re never going to get that control back, so how do you make it work for you?”9
Believers of the myth that “you can control your brand” should recall that brand is an organizational abstraction, and arguably is not held in the same esteem among outsiders as it is within the corporation. Therefore, clinging to the importance of your brand, and control of it, is very company-centric, not human-centric. This fascination with control usually extends beyond the brand. It moves to realms like controlling participation, discussion, or other Hyper-Social behaviors. Eventually, it leads to companies failing to respond to detractors, for instance, in the belief that withholding attention will somehow reduce the detractors’ impact. It also leads to corporate policies that limit employee blogging or use of social media within the enterprise.
We believe that those companies that are making the Hyper-Social shift are learning from their discussions with their tribes that there are a number of dynamics affecting their brand, and that they have very little control over these dynamics. For instance, research on how people buy in online communities notes that the social status of the recommenders will influence the sale. In another study, researchers showed that by giving people a greater opportunity to participate in the creation of a watch, they could boost sales of the watches. In neither case did the company’s shepherding of “brand” have any impact on the sale—instead, it was the engagement of Human 1.0 behaviors that influenced the purchase.
When people within your company start Hyper-Social programs, always ask yourself whether they are grounded in Hyper-Sociality. Are we thinking tribe and not market segment? Are we thinking knowledge networks and not channels? Are we being human-centric and not company-centric?
Then also ask yourself questions related to the myths we discussed in this chapter. Are we providing enough value in our Hyper-Social efforts? Do we have enough content that is worthy of people’s attention? Why would people come to us in the first place, and why would they come back? Why would they engage with one another? How will this help us? Are we doing everything we can to humanize our presence in the marketplace? Are we adequately funding and staffing our Hyper-Social projects? Do our projects have a chance to move the needle? What happens if our competitors do the same thing first and succeed? Who else would want to engage with my tribes?