hey, tech! get serious about social customer enlistment

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lithium.com | © 2013 Lithium Technologies, Inc. All Rights Reserved

Lithium social software helps the world’s most iconic brands increase loyalty, reduce support costs, drive word-of-mouth marketing, and accelerate innovation.

Lithium helps brands to build vibrant customer communities that:

contents

1 the state of social for tech

3 the power of enlistment

5 getting to co-creation

6 gamification—done right

7 cultivating superfans

8 sustainable enlistment strategies

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Bravo to technology and telecommunications companies!

You are among the most serious about social. A full 86% of

you claim to have implemented at least one social tool—

discussion forums, an online community, a Facebook page,

a YouTube presence or a Twitter handle. You’re ahead of

the second most social industry—professional services—by

nearly 10 points.

Of the four major categories of social technology (networks,

blogs, microblogs and video sharing), social networking

shows the deepest investment, more than doubling between

2008 and 2011.

While all this is important to note, what really matters is what

it means for your business. According to your industry peers,

it means that:

1. Those responsible for creating value in your organization

is radically changing. The customer is now becoming

part of that process in a big way.

2. Work product will increasingly come from self-organized

groups—inside and outside of your organization.

3. Decisions based on opinion and experience will be

replaced by decisions based on data.

the state of social for tech

High tech, telecommunications

Business legal, professional services

Public administration

Pharmaceuticals

Retailing

Transportation

Health care, social services

Manufacturing

Financial services

Energy

86

77

74

74

69

69

67

64

64

62

companies using at least 1 social technology

Source: McKinsey & Company

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The good news is that tech companies are social leaders.

With a relatively high proportion of interaction workers (high-

skill knowledge workers) tech companies have been quick to

discover how social networking tools can enhance knowledge

sharing and collaboration, and increase productivity.

The not so good news is that few have come close to

unlocking the full potential benefit of social.1 The extent of

this missed opportunity varies widely by industry, but it’s

especially acute for the technology sector which employs a

relatively large proportion of interaction workers. Improved

communication, accelerated research and collaboration,

and better organized role-based tasks are all available

through better application of social technologies. Tech

companies are among those who stand to benefit the most

from their deployment.

50

40

28

2341

3832

2938

33

31

27

23

19

12

NA2011

2010

2009

2006

social networking blogs video sharing microblogging

social technology adoption Source: McKinsey & Company

The boundaries between employees, vendors and customers will blur

35%

Teams will self-organize

32%

Decisions will be based primarily on the examination of data rather than reliance on opinion and experience

32%

most likely organizational changes, 3-5 years

Source: McKinsey & Company

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The big difference between those tech companies that do

unlock the full potential of social and those that don’t lies in

the extent to which they are able to enlist their customers.

Socially-savvy organizations use social technologies—social

networks, blogs, forums, discussion boards—to enlist

customers to help with tasks and responsibilities that

have traditionally fallen to interaction workers. Things like

answering common questions, providing creative solutions to

problems, creating content around product usage, building

and curating knowledge bases.

And the great news is that we now live in a collaborative

economy. If it’s not already, increasingly, your customer

base will be made of digital natives—arguably the most

collaborative generation we’ve seen by far. Use of social

media has increased 356% since 2006. Those who use social

media regularly—that’s 91% of all US adults online—spend

an average of 11 hours a day connected to the Internet.2

And they’re not all just cooing over baby pics on Facebook.

Here’s what happens when a technology company taps the

naturally collaborative nature of social media and deploys

social technology in a big way.

the power of enlistment

34%

74%

55%rely on social media to guide purchase decisions

share purchases on social networks

choose social networks over traditional eCommerce sites when researching purchaes

Social customers love to shareSource: Mediabistro

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the Skype enlistment story

With more than 200 million customers connecting every

month, Skype needed to scale a sustainable win-win

customer experience in order to gain and keep competitive

advantage. Through community interaction (not agent

interaction) they transformed an obscure tech discussion

forum into a bona fide peer-to-peer community—in ten

languages. Enlisting their most engaged customers, their

superfans, to offer speedier answers to new and trending

support questions was a key part of this strategy.

Skype is a prime example of how a technology company

achieves social success in using community to enlist

their customers to help create value. They’ve invited their

customers to play an entirely new role in the business by

enlisting them to act in ways that benefit each other and the

brand. In doing so, they’ve ushered in a new kind of social

media success that’s not only huge, but sustainable.

why enlistment works—it’s sustainable

Today, mastery of the social customer experience is a core

vital sign for high tech companies. But it’s not at all obvious

how to do it well. Loyalty may be your most valuable customer

attribute, but only 13% of consumers and 25% of enterprises

say they’re ‘very loyal’ to their vendors.3

Because enlisted customers are more effective, more

scalable, and more personally relevant (other customers trust

them more than they trust you), they help you acquire and

engage more customers. Enlisting social customers to help

you create value is the basis of getting to that all-important

viral loop of social strategy—something truly sustainable.

Instead of trying to influence every single social customer

yourself, your focus on influencing the influencers will amplify

the effects of all your efforts in the long run.

Your next job is to get acquired customers to participate in

your business—to enlist them, to inspire them to help you

create something of mutual value. Things like customers

helping you to acquire new customers and superfans helping

you create, improve and scale some of your most valuable

content online. Done well, your enlistment strategy drives

real business objectives—things like increased awareness

and new customer acquisition. Customers helping customers

also improves the customer experience and drives increased

loyalty.

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The essence of enlistment is inspiring customers to work

toward a common cause. It’s realized by converting community

members with a shared interest into superfans with a shared

purpose. The reason for enlistment is co-creation.

Think of co-creation as the deepest, most active form of

engagement. When customers are co-creating with you,

they’re doing things that benefit themselves, other customers,

and the brand. The goal is to generate something of such

significant value that it motivates continued participation from

those participating now—and inspires others to jump in and

participate as well.

Your engagement strategy is all about moving customers

from passive engagement —browsing, viewing, downloading—

to increasingly more active forms of engagement—sharing,

curating and creating content. Each level of engagement

from the most passive to the most active creates

progressively greater value.

Co-creation comes in several different forms:

Co-Ideation – When customers submit and vote on ideas

for product features and enhancements

Co-Design – When community members participate in the

development of new programs, campaigns or products

Co-Production - When community members produce

content with the brand that other customers use

A sense of personal identification with the brand is the

hallmark of successful enlistment. When customers co-

create value with you, they become enlisted. And when they

become enlisted, there’s a sense of belonging with the brand.

The trickiest part of enlistment is that customers are not at all

obligated to collaborate with brands. And once they do, they don’t

have to continue. That’s the blessing and the curse of bona fide

customer collaboration: participation is always optional.

Giving consumers absolute freedom to participate, or not, in

customer communities is not just a good idea—it’s strictly

essential. But because participation is optional, it’s not always

easy to get people to make that choice, or to continue making

it. Which begs the question: how in the world do you get them

to participate? What is the secret to long-term enlistment?

getting to co-creation

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Anyone can make a game that entices people to play a few

times. Very few games, however, are ones people will play for

life. Far too much gamification, the introduction of gaming

dynamics into online social experiences, focuses on what we

call gold star rewards—points, badges, leaderboards, etc.

These sorts of rewards will almost always work in the short-

term and they’re pretty easy to implement. That makes them

super useful to you, but also means they’re not nearly enough

to achieve your long-term business objectives.

In order to reach those, you need to build into your

gamification strategies different time scales of reinforcement.

They need to hook consumers into play straight off, and make

them want to come back even when the game’s not really

the point for them anymore. To do that effectively we need to

understand how to motivate people each step of the way.

The principal human challenge to long-term gamification is

that people eventually master the task before them… and then

they get bored. The trick is to calibrate games with a level of

challenge that exactly matches a player’s skills and ability.

Too easy and it’s boring; too hard and it’s frustrating.

For enlistment to happen you need to do more than get the

customer’s attention, you’re trying to make participation in

your community the satisfaction of a genuine craving. Good

gamification strategies adjust the level of difficulty to match

the player’s skill.

Gamification can (and should be) an essential component of

your enlistment strategy. But it must be done with an eye to

sustainability, because enlistment is long-term by definition—

like loyalty.

You have a lot of gamification tools at your disposal—points,

badges, and leaderboards. Some of these work to reinforce

players immediately, but their effects are fleeting. You

can solve the problem of a short-term effect by cascading

different gamification tools with successively longer

reinforcement timescales.

The figure below shows a progression of reinforcements from

the simplest, single actions to the richest, most valuable

behaviors—reciprocity and collective action.

gamification—done right

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The progression from short to long-term motivation succeeds

because along the way you and your customers are generating

a lot of value. Customers might start out by working for

points and badges, but they never stay for ’gold star’ rewards.

Customers first get hooked in by points, badges and perks,

then get progressively more deeply engaged as they participate

in useful activities they deeply and personally care about. Fans

become superfans because they personally value the work they

do for you in and of itself. Engaged customers identify with your

brand, take pride in it, and vest their reputations by contributing

to it. Those stronger relationships sustain themselves—and

they’re beneficial to everyone.

Short timescale rewards work fast and quickly and earn a

high level of adoption—they can help you scale. But their

shelf life is short. People figure out the game and get tired of

playing. Then they start thinking they’ve just wasted a whole

bunch of time and they quit.

Consider Foursquare, for example. While gaming mechanics

drive immediate behavior at a huge scale (over 30 million

people play Foursquare) the churn rate is very high (many end

up quitting). Earn three badges and a player is usually pretty

excited, but at 200 badges who really cares anymore? People

figured out the game of Foursquare, and they know they are

just going to get another badge. So they stop.

Long timescale reinforcement mechanics work more slowly,

meaning fewer people get to that stage and only about

1% become superfans. That means with long timescale

reinforcements you get sustainability in exchange for scale.

But don’t forget that this exceptional 1%—your superfans— is

all you really need to scale for social. You might be looking at

just a handful of people who actually complete the journey all

the way to the furthest end of your spectrum.

cultivating superfans

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What you’re aiming for when it comes to enlistment is

how to get that viral loop going—building something that’s

sustainable over the long haul. In order to get there, you need

to tap into things that motivate your customers intrinsically,

not extrinsically—that is, activities that create value for

themselves. There are two ways to go about that.

the value mechanism strategy

This strategy jumpstarts activity that has intrinsic long-term

value for the player. As consumers engage and participate

in gamified activity, reflect back to them the value they’ve

created. Initially, you just need to reflect the value they’ve

created for themselves to get them hooked and to continue

participating. Gradually, using tools with increasing time

scales of reinforcement, you can shift the players’ focus from

the value they’ve created for themselves to the greater value

created for others. Here are some examples:

1. Start with rewarding customers for consumption,

“Congrats! You’ve read 100 posts!”—things customers

value for themselves. Then move to rewarding them

for sharing, “Yay! You shared a post with 500 friends!”—

actions that bring value to their friends.

2. Move from, “Right on! You’ve rated 100 posts”—value to

themselves—to “You’re a rock star! 100 people find your

ratings helpful”—value to community members.

3. Move from, “Wonderful! You’ve created 10 ideas”—value to

the community—to “Congrats! 3 of your ideas submissions

have been implemented”—value to the company.

4. Move from “10 of your posts have been used in knowledge

base articles”—value to the company—to “1000 people

have viewed your knowledge base contributions.”—value to

the rest of the world.

As customers come to realize the long term value they’ve

created, their motivation for continued participation changes.

Now, it’s the value itself that becomes the primary behavior

driver. At this point you’ve created a positive feedback loop

that reinforces the value customers create.

the motivation mechanism strategy

This strategy jumpstarts a variety of activities that players can

freely explore in order to discover which one motivates them

best. The platform collects all the data from that exploration

and discovery and reinforces the behavior that is most

intrinsically motivating to the players.

A motivation mechanism enlistment strategy is trickier.

Instead of teaching players the value they’ve generated

through reinforcement, it shifts a player’s behavior from being

extrinsically motivated toward more intrinsic motivations—

and it’s not easy. A motivation mechanism uses community

sustainable enlistment strategies

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About Lithium Technologies: Lithium social software helps companies unlock the passion of their customers. Lithium powers amazing social customer experiences for more than 300 iconic brands including AT&T, BT, BestBuy, Indosat, Sephora, Skype and Telstra. The 100% SaaS-based Lithium Social Customer Experience™ platform enables brands to build and engage vibrant customer communities to drive sales, reduce service costs, accelerate innovation and grow brand advocacy. For more information, visit lithium.com,or connect with us on Twitter, Facebook and our own community–the Lithosphere. Lithium is privately held with corporate headquarters in San Francisco and offices across Europe, Asia and Australia. The Lithium® logo is a registered Service Mark of Lithium Technologies. All trademarks and product names are the property of their respective owners.

to figure out a player’s intrinsic motivation from a set of

options—something quite a bit more complex.

Whenever a player is performing a gamified activity, he leaves

behind lots of digital footprints in the form of activity data.

Think of this strategy as setting up a kind of Montessori

classroom, where the students always have a choice of

activities within a prescribed range of options. Only, in this

classroom, we’re carefully monitoring every choice and

coming up with a model of which activities motivate any given

student best.

Once we figure out a fan’s intrinsic motivation, we’re on our

way to sustainability.

sustainable enlistment—a must have for tech

Yes, customer loyalty is important today. But the data shows

it’s not something you can count on. Especially for tech and

telcom companies where the pace of innovation is extremely

high. The next new device, killer app, brand new technology

or better customer experience offering can cause significant

customer defection at any time. Customer loyalty today is only

as good as your last offering.

Enlisted customers are a far more powerful asset for your

business. Because they co-create value with you, their loyalty

is born of a different place all together—not just a sense of

love for your products, but a sense of belonging to your brand.

That enlisted customers also make your more effective,

more scalable, and more personally relevant to potential new

customers, is almost like icing on the cake. The cake is that

they provide a sustainable engine for continued growth and

competitive advantage.

resources1. McKinsey & Company, The Social Economy: Unlocking Value and

Productivity Through Social Technologies

2. Mediabistro, The Rise of Social Commerce

3. Accenture, Lessons from the Recession: Where Customer Service and Support Investments Yeild Superior Returns for Media, Communications and Technology Companies