This is the second (and super long) entry of highlights from the Online Community Business Forum, which took place in lovely Sonoma, CA March 19-20. Read on for top level notes from sessions 4-7.

March 19th – Day One Continued

2:30 – 3:30: Session 4 / Break Out Sessions

Breakout 1: Context & Reputation
Session Lead: Randy Farmer

Randy Farmer lead an open discussion of the issues related to reputation systems in the contexts he outlined in “Context is King” – the slides are on slideshare.

Five (Six) types of Community Context:
• A person/User
• A Group of People/Users
• An Entity (Product, Location – anything with a database record)
• A Collection of Entities (Category, Photo Album, Boxed Set, Trip Plan…)
• A “Site”/Your Corporation”

Breakout 2: Sourcing Innovative Product & Service Ideas from Communities
Session Lead: Sonali K. Shah, Assistant Professor – University of Washington Business School

• The notion of enthusiasts, hobbyist coming from user of products or services.
• Saber reservation system at AA – example
• One idea to come up with the problem – another to come up with solution
• Different ways firms are harnessing these ideas
• 25 – 55 % of new innovations come from users
• Discovery through use
• No need for market research – if the user has a problem, it’s enough to know what the problem is
• Once innovation is created, it’s defused through free sharing – then a few years later, firms create them or the people who thought of them create them.
• Users developed 60% of innovations across three industries
• Innovation: users had an idea and they created a protype – r&d work is now close to finished
• Major Improvement Innovation: Footstraps
• Footstraps came after 12 years from sports enthusiasts from Hawaii – 1974 during jumping competition where they were falling off the board
• 1978 renewed enthusiasm for jumping in the First Hawaiian World Cup and the “chip” board was brought out – use and innovation going hand and hand – which started high performance windsurfing and snowballed from there
• User Innovators work closely with others
• Only 2 of 22 user innovators interviewed claimed to have worked independently. Hence the idea of community
• Information and Innovations are shared freely with everyone
• How to articles in magazines – how info got diffused initially
• and Sold!
• Small number of people who want to make it themselves and that’s where commercialization starts
• 60% users – product market entry 71%, no financial benefit 17%, consulting 12%
• 43% of key innovations first commercialized via firms stated by innovating users
• Why share?
• Building a field and future improvements
• Enjoyment
• Prevention of 3rd party appropriation: Public exhibition, patenting
• Generally not planning to establish a commercial venture: new market and/or opportunity costs
• Never exercise your patent against your users
• Users innovate for personal benefit
• Distinction based on relationship between the innovator and the innovation
• Takeaways
• Users innovate for personal benefit
• Community-based innovation is frequent and widespread
• Entrepreneurial value generated by user innovation
• Corporate Value Generated by Harnessing Community-Based Innovation

Breakout 3: Online Community Culture
Session Lead: Rachael Makool, Independent Community Practitioner
Session Lead: Scott Moore, Independent Community Practitioner
Rachel talked about the community and data, and Scott talked about the social aspects and behavior and how it fits into the big picture.

Rachael Makool, Independent Community Practitioner
• Positives and challenges of dealing with eBay community
• Focus is buying & selling product
• Community grew outside of that model
• Social media to drive products and services and quality
• Big companies are tasked with stepping up and providing better products and services – how does community play into business and our roles
• Culture – watched culture develop over the years at eBay – organic community that formed and then WOM
• Then early adopter came in and helped to form the company.
• Members wanted stake in company after they went public – company didn’t do anything for them. Affected the long term culture and still have bad feelings. Culture created and evolves changes or doesn’t over the long term.
• Positive examples – cultural uprising mostly based on fees.
• You can sometimes give something attention when you shouldn’t.
• Acknowledge member upset
• How is it done
• What are the stakes
• Is this a precedent?
• Look at the lessons in life and pull it into online structure.
Example – members upset about fee hikes, big plan to have an uprising at an ebay conference and they were concerned about it, but only one person actually showed up. The company spent a lot of time and resources thinking about how to handle the issues and it turned out to be nothing.
• Clear objectives
• Need to be very clear on the strategy of your business – important for every community manager
• Determine how you will reach your community. Need to really think of big picture and longer term and determine what types of communication you need to have w/you community.
• Be honest and transparent
• Don’t over commit and miss deadlines w/o communicating with members
• Priorities change – promises to customers have to be changed.
• Culture is both internal in the company and in the community – one big family

Scott Moore, Independent Community Practitioner
• Fundamental attribution error – characteristic based on their error. Do a crime you are evil – doesn’t take into account circumstances.
• Used this to for community manager to re frame the way they think about negative members
• Best way to channel negative energy – and negative people
• Started in virtual world – were working on mmo’s and community
• Online culture
• physical environment
• economies – information and services
• Set expectations and head off problems before they arise. Expectations as to what you can realistically do.
• Example of a virtual world experience where a developer over committed on a feature set – features were not delivered on timeline promised.
• Simple communication was required. Conflict –resolution
• Engage and let them have their say. Keep an eye on the situation
• Be clear about where you are and update peeps even if you cannot deliver.
Can influence culture and guide it, or try to pull into a new direction.
• Influence by statements, branding(co and comm.), objectives, who the community is, must be internal and external (you comm. and your employees), clear messaging.

Session 5 / Embracing Community & Social Media: Getting Key Departments and Execs Engaged
Internal stakeholder buy in and commitment is key to a successful and sustainable community strategy. Get perspective from two senior community strategists who regularly have to make the case for online community.
Session Lead: Sindy Braun, Sr. Director, Web Marketing and Communities – VMWare
Session Lead: Diane Davidson, Director, Customer Success and Community – Cisco

Know when to and when not to build a community
• Show how community has value – not always tied to ROI
• Community justification
• Good reasons
• It’s all about the customer
• Tie back to cure business value
• Deliver “services” the community wants
• Achieving scale in your business
• Bad Reasons
• Web 2.0/3.0 is cool
• Community for community sake
• Everyone is doing it
• We should
• Our customers are going elsewhere
• Use customers as the “Koolaide” Show what customers are saying. Listen and extract valuable market intelligence. This information will be useful and engage the marketing team.
The many faces of communities
• Support Forums – move from purely tech support world to community. How can we help extend and find out how to get more value out of relationship (planning, strategy, more than support)
• Challenge face is to get people to register and engage. Created VMTN for user interface. Middle graph that people cared about was ‘who was following them’.
• The chart is a great way to encourage marketing/product managers to get engaged.
• Can meet quarterly to go through insights seen through community.
• Can show how internal team is participating
Beta Program management
• Support for community
• Participant pool
• Single sing-on
• One stop shop
• Support request filing
• Bug filing
• Beta plan/journaling
• Task list
• Feature voting
• Product downloads
• Newsletter
• Forum
• Reporting
• Surveys
Another thing that helps to get people involved is external recognition to drive internal acceptance. They Made info world’s websites IT pros should master in 2009. VMWare communities featured as #3 (behind Linked in and Google apps)

What you need to succeed
• Flexible community platform
• Innovate ahead of the requirement
• “Community Evangelists”
Keeping Execs engaged:
• Intelligence for the business unit
• Validation/invalidation of myths (showing that the community does not have the same perception that the company thought – this is your focus group and how to test ideas)
• If appropriate – ROI/cost savings metrics – should be most easy to do. Can show dollar figure with calls saved from support and customer loyalty metric.

March 20th – Day Two

9:00 – 10:00: Session 6 / The Business of Online Community
Businesses that rely on their communities face many business challenges, but also have many unique opportunities. Hear the perspectives of senior leadership from two leading online brands.
Session Lead: Allen Blue, Co-Founder – LinkedIn
Session Lead: Craig Warner, Senior Manager – Google

Allen Blue, Co-Founder – LinkedIn

• LinkedIn makes revenue 4 ways
• Subscriptions (individual or company)
• Jobs (job board)
• Advertising
• Research Network (marketing research product allowing someone to run polls and questions)
• Key piece is the alignment of people in the network and the 4 monetary activities above.
• Been able to balance revenue and community. Making sure revenue is aligned with interest of people in the community.
• Users come in expecting to do business. If contacted by a recruiter or sales person is what they expect because the ecosystem is about that business.
• Advertisements are okay if heavily targeted
History of LinkedIn
• Started as a way for him to reach the connections of one his friends.
• Realized if that is the primary use case.
• Need a nework of trust.
• A network of trust is sufficient for an entrepreneurial ecosystem
• But the entrepreneurs to not have trust. (don’t want to ask question to reveal new info about company, show that don’t understand)

Craig Warner, Senior Manager – Google

• Google is 100% advertising
• Power ads on AOL and other large sites. Also power community groups through adsense program (paid out over 4 billion dollars – vast majority to smaller groups)
• Google maps opened up so areas in the world had bad maps and in those communities people are contributing and able to improve.
• Advertising revenue providing to people makes them viable organizations to scale
• Had partnerships with Dell, Adobe, Firefox they can bring queries Google will share revenue.
• Long term revenue stream. Community toolbar. Create one that community can install and capture search queries and report to make money.
.
10:00 – 11:00: Session 7: Gleaning Insight From Your Community Ecosystem
This session will focus on gleaning insight and measuring value you’re your entire community ecosystem, from your hosted community to mass social media.
Session Lead: Matt Warburton, Interim Director of Enterprise Community Marketing – LinkedIn
Session Lead: Barbara Lewis, President and Founder – MarQuant Analytics

Matt Warburton, Interim Director of Enterprise Community Marketing – LinkedIn

How to gather insight from your community.
• Create a voice of the customer program.
• Enable real time feedback from customers in private group to gather marketing, policy, and product development feedback
• Represents the voice of the user
Program components
• In person meetings
• Recruit 10-15 users to travel to your location and provide liv feedback
• Great to bring staff and users together
• Costs 12-15k per session
Phone conference calls
• Periodic conference calls to engage users on specific topic
• Calls structured like a focus group
Private Online forum/group
• Private forum to enable ongoing conversations and feedback among
• Provides alternative venue for topics covered on calls or topics that come up in between calls.
Recruiting process
Recruiting survey
Define target
Filed survey recipients that meet criteria to confirm they are a good fit for the programs
Communication skills
Constructive have point of view
• key to customers to screen by desired selection criteria (usage levels, etc)
• Screener phone calls
• Hire a focus group recruiting company to conduct the first level of phone screening with final calls conducted by community staff
Best practices
• All participating sign an NDA
• Limit tenure of participants
• 12 month tenure recommended
• Fresh perspective
• Avoid behavior problems/entitlement issues
• Remove non-constructive or disruptive users
• Require direct staff interaction in meetings, calls and discussion forums
• Require all participant inquires to go through community team
Reporting & measuring success
• Summary reports are distributed after every in-person meeting or phone call to topic sponsors and key functional groups
• In persona summaries also can include video clips from sessions

Measurement
• # of ideas generated
• # of changes made as a result of feedback
• Satisfaction of internal customers

Barbara Lewis, President and Founder – MarQuant Analytics

• Problem = too many internet marketing activities $25billion year
• Social media makes measuring harder
• Need to determine what is working and what is not working
• The way to do this is ‘econometrics’
• Taking data on two sides of the equation (output – what driving trying to get more customers and revenue) and on the other side is all the inputs getting from the arena
• Take the results and put into optimization routine to determine what marketing budget should be and where allocated.
• Today determine by percentage of revenue
• Bottom line could be driving total new customers, marketing share, profitability = different per company.
• Take all the info and build database.
• Weekly data over 3 year period. look over period over every single week
• Can see what is working and what is not working.
• What they do with econometrics is develop algorithm that want to mimic actual sales. Devised formula of calculated revenues to see how it fits known as Adjusted R2.
• Taking past history data and developing a formula to put on top to see if it tells what happened.
• Can see which marketing expense had the highest impact on revenues?
• For example:
• Don’t see radio anymore
• Web display and web search are strong
• cross effect that television driving sales on internet
• Typical social media metrics
• content
• relevance
• impact
Recommendations
• Tie social media objectives to business goals
• Identify data that measures business goal achievement
• Capture appropriate data
• Analyze data
• Monitor changes to input/output variables to deterine what’s working and what’s not working
• Test various options

What’s next?
• Social capital metric that is like a net promoter score. An amount assigned to each company based on questions and various answers. That score would then measure effectiveness of community.
• Currently there is no measure for social capital.
• What are the metrics that would define social capital?

Tweets from OCBF2009 OCBF2009
Pictures on Flickr