Enterprises Continue to Invest in Social Media

Posted by Mark Brousseau

A second annual survey of companies sponsoring online communities shows signs of increasing maturation as enterprises continue to invest in social media tools and online communities.

According to the survey, conducted by Deloitte, Beeline Labs and the Society for New Communications Research, 94 percent of the respondents indicated that they plan to maintain or increase investment in their communities, while only six percent plan to decrease investment.

However, while enterprises are effectively using these tools to engage with customers, partners and employees for brand discussions and idea generation, the survey also indicates that organizations continue to struggle with harnessing social media’s full potential.

The “2009 Tribalization of Business Survey” evaluates the perceived potential of online communities and identifies how enterprises believe they may better leverage them. The survey measured the responses of over 400 companies, including Fortune 100 organizations, which have created and maintain online communities today. The communities ranged from fewer than 100 members to more than one million members.

“Despite risks associated with participating in online communities, the internal costs of community formation and management, and the fact that we are in the midst of a profound recession, organizations’ continued and enhanced investment in online communities underscores the perceived potential for the value that they may provide to the enterprise,” said Ed Moran, director of product innovation, Deloitte Services LP. “Social media and communities are expected to continue to play a significant role in the way in which companies are interacting with employees, customers, partners and the larger business ecosystem, thereby redefining the very edge of the corporation.”

Of the companies surveyed, a majority agreed that increasing word-of-mouth (38 percent), customer loyalty (34 percent) and brand awareness (30 percent) continue to be the top business objectives of online communities, followed by idea generation (29 percent) and improved customer support quality (23 percent). However, in the majority of companies surveyed, marketing continues to be the primary driver of online communities, resulting in a significant gap between community goals and the organizations’ capability to fully leverage these communities on an enterprise wide basis.

Market Shows Signs of Maturation
Several data points indicate continued maturation of the enterprise’s use of communities and social media. For instance, this year’s survey pointed to an evolution in the way in which companies are tracking and engaging with both active and inactive members. While the number of active users and their level of participation have been considered the top measures of success for an online community, this year survey respondents are paying close attention to non-active users or “lurkers” – people who observe the community, but don’t participate in the discussion.

Thirty-two percent of respondents are capturing data on how these individuals derive value from the community.

Additionally, 20 percent of survey respondents have set up formal “ambassador” programs, which give outsiders preferential treatment in return for being more active in the community.

Thirty-nine percent of the survey respondents also indicated that more full-time people are being deployed to manage the communities.

“While we are seeing signs of maturation in this year's study, there are still plenty of companies who do not realize the power of communities, and others who have not yet figured out the proper approach for leveraging communities as part of their business,” said Francois Gossieaux, partner with Beeline Labs and a senior fellow with the Society of New Communications Research. “Businesses are truly become social again, and companies should look to leverage the collective wisdom of their employees, customers and partners in order to innovate faster, reduce costs, and bolster their bottom lines.”

Rethinking Community Success
According to the survey, the biggest obstacles to creating a successful community – getting people to join (24 percent), stay engaged (30 percent) and keep returning (21 percent) – can be easily remedied through partnering and new management practices. The study indicates that very few companies, however, are taking the steps necessary to overcome these challenges.

While 58 percent of respondents evaluated partnering with existing communities, complementary vendors or end users when developing their community, 55 percent of the companies that evaluated a partnership did not actually partner.

Furthermore, the survey also revealed significant gaps between community goals (such as generating word of mouth, customer loyalty and brand awareness) and how success is being measured. The top two analytics for measuring success are the number of active users (34 percent) and how often people post/comment (32 percent), indicating that participation is still considered to be the biggest measure of success. Potentially more useful analytics, however, such as increase in search engine rank and citations/links on other sites, are less often utilized, highlighting a mismatch between the desired outcome and how that outcome is measured.

“To realize the full benefit of social media and online communities, business leaders must move beyond viewing them as “bolt-ons” to their corporations,” added Moran. “Companies need to integrate the new information flows associated with the communities with those that already exist within their companies. New management strategies and practices will be critical, including redefining the scope and role of alliances as well as the overall boundary of corporations.”