“I don’t want any more friends. But I do want your knowledge. That’s what’s really motivating people to use communities, “ says Tilak Mandadi, VP of Interactive and Travel Technologies for American Express.

Talik – one of the most entertaining IT execs I’ve ever heard in a long time– said seven things matter the most for effective online communities:

1. Social intelligence – learning what other people know — vs. social networking.
2. Specialized context of community
3. Exclusive content
4. Ability to transact
5. Moderate moderation
6. Participant defense of the brand (Let other AMEX customers defend the brand if someone says something negative)
7. Speed to market

The ability to transact is especially important. Tilak said customers using American Express’ “Members Know” travel community have expressed frustration at not being able to act on what they were learning about in the community, which Amex is going about changing.

Many companies are creating communities for awareness, loyalty and word of mouth, but they may be missing a big opportunity for transaction revenue — and frustrating customers in the process.

Today my firm, Beeline Labs, Deloitte, and the Society for New Communications Research released highlights of an online communities study among 140 organizations which create and maintain communities. Some of the highlights, more of which can be found here:

Greatest value of communities:

• increasing word of mouth (35%)
• increasing brand awareness (28%)
• bringing new ideas into the organization faster (24%)
• increasing customer loyalty (24%)

Greatest obstacles

• getting people involved in the community (51%)
• finding enough time to manage the community (45%)
• attracting people to the community (34%)

What contributes most to effectiveness:

• ability for community members to connect with other like-minded people: 54%
• ability for members to help others: 43%
• focusing community  around a hot topic or issue: 41%
• quality of the community manager/community management team: 33%

Advice for others

When asked what their most important piece of advice is for others creating communities, survey participants’ advice focused around these eight areas:

1.    Start with the end in mind: “Start with a business strategy, defining carefully what you want to accomplish through the community.”

2.    Focus on the value to the members:  “Make sure you deliver real, special, unique, obvious value to the core group you’re hoping to attract.”

3.    Don’t start with the technology: “Too often people get drunk with Web 2.0 tool excitement and then try to push their business and customer goals into the wrong tool.”

4.    Keep it simple and intuitive:  “Focus on the least common denominator first. Keep it easy to navigate with simple tools to use.”

5.    Keep it fresh and active:  “Keep activity levels up, constantly add new content.”

6.    Have dynamic community leaders: “Make sure you devote enough time to managing the community; letting it fester is worse than not having it in the first place.”

7.    Think through who to involve – or not. “Get Legal and PR to buy-in and help on design, but keep them out of active management.”

8.    Get a passionate core of participants active before launching:  “Make sure you have a committed core of passionate users before you launch.”
Many thanks to everyone who took the time to take the survey and talk to us as part of the qualitative surveys. The complete results are on their way to you this morning.

Here are 50 pragmatic, do-able, inexpensive ways to use social media to improve marketing from Chris Brogan.  Great job, Chris. Thanks.

If you want to really understand how social media/tools are changing how we work, play, activate change and live, pick up Clay Shirky’s Here Comes Everybody: The Power of Organizing Without Organizations. And if you are seriously considering communities as part of your marketing strategy, Do Not Pass Go without reading this.

Here are some of my takeaways:

There are three essential pieces of a community, starting with purpose:

1. Why: what’s the the promise of the group/community? Why would anyone want to join or contribute? “Creating a promise that enough people believe in is the basic requirement. The promise creates the basic desire to participate. ” Note: in my experience this is where marketers usually spend too little time. Or, rarely challenge their own. assumptions.

2. How: this is where you figure out which tools will help people do what the community is all about. Note: too many companies are buying tools and then trying to make a community fit the tools. A recipe for disaster — or, at a minimum, enormous frustration.

3. Rules of the road: this the what Shirky calls the bargain: “If you are interested in the promise and adopt the tools, what can you expect and what will be expected of you?”

People have always wanted to share and help one another. Pervasive, easy-to-use communications tools and ” the collapse of transaction costs makes it easier for people to get together — so much easier, in fact, that is changing the world.” “Social tools don’t create collective action — they merely remove the obstacles to it. This is why many of the significant changes are based not on the fanciest, newest bits of technology but on simple easy-to-use tools like email, mobile phones and websites, because those are the tools most people have access to and, critically, are comfortable using in their dauly lives.”

Incentives for participating are not financial: Attention, the desire to see your work spread, the desire to help others and be helped.

Why some communities grow and others don’t: “They grow if enough people care about them, and die if they don’t.” (This goes back to getting the promise right.)

How did you do that?: communities where a group of people help one another get better at some share task or interest — called communities of practice — are especially pervasive and appealing. The basic question that can trigger a community of practice: “How did you do that?”

Not everyone needs to be passionate, participate a lot: in the old model we had to work hard to get people passionate enough to act, because acting was a lot of work. Today you can have a handful of highly-motivated people participating a lot — and “people who care a little participate a little, while being effective in the aggregate.”

A small number needed to get things started: “The number of people who are willing to start something is smaller, much smaller, than the number of people who are willing to contribute once someone else starts something.” Tap into a small core of passionate people; don’t expect a lot of people to contribute at the get-go. Many are more comfortable adding to what someone else has started.

A recent Forrester survey of 189 companies found that 38% rated blogging marginal to marketing and 15 % said blogs were irrelevant. My experience is that many who get into blogs have unrealistic expectations, set irrelevant measures and “ROI” goals, and view blogs as a campaign tactic, which they most definitely are not. (Another observation: many quickly run out of things to blog about, often a sign that they’re not passionate or knowledgeable about their field.)

The bigger point is that people today expect a more social, casual style of business communications. In writing style. And in being able to post a comment or talk back.

The value of blogging done right is that it breaks the old corporate speak iceberg. Soon there will no longer be a corporate Web site and separate blogs. Good business Web sites will be blog-like in style and the ability for people to comment.

However, this means that businesses need to be more interesting, provide more valuable content and ideas to people who take the time to go to their site/blogs, have a point of view on trends in their industries, and thoughtfully respond to comments.

It also means that many, many communications and marketing people have to relearn communications skills.

But if all this change helps customers more quickly get to know your company — making it easier for them to make a decision and buy — it’s well worth the change. And that’s where the marketing real payoff comes in.

PS - Thanks to my friend and Israeli management consultant Dov Gordon for the heads up on the Forrester study. Check out his new article, “Spitting in the Wind: A Single Obvious Insight to Sharpen and Focus Your Strategy.”

I don’t know about you but I feel overwhelmed by the number of events and conferences out there. So here’s some editing: here are three where you’ll learn a lot, meet some interesting people, and feel that it was well worth your time and money.

• Word of Mouth Crash Course: My friend and WOM expert Andy Sernovitz is hosting a small-group word of mouth marketing seminar on July 30 and Sept. 4 in Chicago. Usually he only does private training for companies at a very large price, so this is a rare chance for 50 people to get a good overview of WOM. (If you use this code when you register you’ll get a $250 discount: “welovebeelinelabs.” For more: http://events.gaspedal.com.

• BIF-4 Collaborative Innovation Summit: Oct. 15-16 in Providence, RI. This is an amazing two-day conference that I think is better than TED. Hosted this year by Bruce Nussbaum, editor of Business Week and author Bill Taylor, speakers are fascinating innovators from business, science, education, the arts, non-profits. It will open your head up in a big way.

• Web 2.0 Expo is coming to New York for the first time, Sept. 16-19. We at Beeline Labs are running a three-hour experiential workshop on the morning Sept. 16 on how to create and run thriving online communities. Based on private community-building workshops we’ve recently done you’ll come away with a blueprint for creating a community for your organization. Hope you can join us! Drop me a line, lkelly@beelinelabs.com, if you want to know more.

I predict that marketers will have great fun but lose even more credibility with this new strategy: tuning in to business psychics. That’s right. All kinds of businesses seem to be turning to psychics, otherwise known as “intuitionists,” to make important decisions, according to a Newsweek article, “The 10,000-a-Month Psychic.”

Kevin Clancy, author of Your Gut is Still Not Smarter Than Your Head, has a good post on what this trend means to marketers over at The Marketing Fray.

“Aside from the utter lunacy of a business hiring a psychic for anything other than entertainment at the company Halloween party, we’re concerned that when business folk want to make sense of uncertainty in the present, they get completely preoccupied with the future as if they have no control over it. It’s understandable, but it can be dangerous if they forget that the past and future are not mutually exclusive. “

All that said I am looking forward to tuning into a webinar on July 11 over at Learn From My Life with psychic Ainslie MacLeod, author of The Instruction: Living the Life Your Soul Intended. Why? Maybe it’s summer and I just need a fresh point of view that has nothing to do with marketing, the recession, or presidential politics.

Forget conventional wisdom when it comes to managing corporate reputation. In fact, transparency matters the least in building stakeholder trust (employees, customers, suppliers, investors) and can actually erode trust, according to a fascinating new study by Harvard University’s Michael Pirson and Deepak Malhotra, published in the summer issue of MIT Sloan Management Review. (”Unconventional Insights for Managing Stakeholder Trust.”)

The authors studied four different organizations to find out what matters and to whom. Highlights:

• Transparency is over-rated. In fact, transparency can diminish trust depending on what is disclosed. Also, it has little relevance in terms of building trust.
• Integrity is important, but. Stakeholders close to a company (employees and customers) need to feel that the company genuinely cares for their personal well-being. Integrity alone doesn’t cut it if people feel the company is being fair but “callous.”
• Trust is built on different types of competencies. Employees and investors look for management competency. Customers and suppliers more concerned about technical and quality competency.
• Shared values is hugely important to all stakeholders: All stakeholders want to associate with organizations with values they identify with.

“We have found that that although value congruence matters most to employees, it is also an important factor for every other stakeholder group we studies. In other words, stakeholders of all types are interested in associated with organizations with whom they can identify — and with whom they perceive a match in values.”

This study has interesting implications for marketers and corporate communications professionals.

• Trust means different things to different stakeholders.
• Marketing needs to focus more on two key trust-building factors: the company’s genuine interest in their customers’ success and well being, and the company’s technical ability to deliver quality products and services.
• What beliefs? It’s essential to clearly articulate the company’s values and beliefs. (Maybe even help uncover them. ) In my experience few organizations — especially marketers — focus on these beliefs, or even know what they are. But as this study shows they are critically important to building affinity and trust with customers.

A big part of SOCIAL media is being more social as companies — online and in the real world. But many executives have asked me, “how do you measure sociability and friendliness?”

In a 48-hour experiment with blackjack dealers at Ameristar Casino J.D. Power & Associates found that a highly social, outgoing blackjack dealer collected 13 percent more money at his table than at the serious table where the blackjack dealer held to the standard, “don’t talk unless spoken to” rule.

In explaining the experiment Chris Denove of J.D. Power and author of “How Every Great Company Listens to the Voice of the Customer,” told a group this week that there’s no reason to believe that the same relationship doesn’t hold true in other business environments. Why? People like spending time with people who are likeable.

Amid all the cool things in marketing today we often forget how influential a good or bad RFP response can be. I recently had to review 30+ RFPs for a client, and I was asked by another client to teach their sales people to write better RFP executive summaries. Here’s what I learned:

10 most common mistakes

1. About us vs. the prospect: Too often executive summaries are summaries of the selling company’s capabilities. Big mistake number one. Effective executive summaries are about the prospect– not you. How you’re going to solve their problem. Advice on how to burn down their obstacles. How much money they are going to save. New ways for them to be innovative in their industries.

2. Proposal summary vs. a business case: Despite is name an executive summary is not a summary of the proposal, but a succinct demonstration of the understanding of the prospect’s needs and the bottom line outcomes you can deliver against those needs.

3. Opening with blah blah platitudes vs. guts and convictions: Executives read just the first two paragraphs, yet the first two paragraphs of most executive summaries are filled with space-wasting platitudes like: “Thank you for the opportunity to provide you with our proposal in response to your RFP to support XYZ Company’s business needs. We are prepared to put this experience to work for XYZ Corporation with a dedicated support team. ” Blah. Blah Blah. While the RFP writers, usually procurement of purchasing managers, may read the entire document, decision makers generally only pay attention to the first two paragraphs. This means that the critical information should be in those paragraphs, and platitudes should be omitted.
4. Verbal runoff and information overload: One of the most common mistakes is including too much information that is irrelevant to the prospect and/or too much pat, bland information that every vendor cites. A good executive summary should focus only on that information that is relevant to this particular prospect.

5. What’s at stake? Many RFPs go nowhere, losing out to inertia or other business priorities. One of the purposes of the executive summary is to convey what’s at stake, and why acting will provide business value beyond simply reduced costs.

6. General to industry vs. personal to prospect: General remarks and capabilities information are boring to reader and make you sound bland. Answer right off, “What’s in it for the prospect company?” and avoid generalities. The prospect only cares about the specific value you’re bringing to his or her organization - not general trends, not about the exhaustive list of your company’s capabilities.

7. Educating vs. selling: The executive summary is not an education document or a relationship development tool; it is a sales closer. “Here’s the problem. Here’s the business value only we can provide.”

8. Bland writing inadvertently conveys lack of real interest: Researchers have proven that decision makers make more judgments about a company based on how it communicates than many of the actual messages. I’ve put several companies’ RFP summaries through the LIWC software analysis and found that the company comes across as detached from the recommendations (not passionate about the ideas) and not as completely honest as the company actually is.

To be viewed as a trusted, innovative, potential partner passionate about helping the prospect succeed, adopt a tone and style that is direct; focused on the most relevant information to the prospect; uses more active verbs, shorter sentences fewer adjectives, more bullets, more descriptive subheads, and a more liberal use of the first person - I, we, us.

9. Too many pages: We all fall into the trap of thinking that a summary needs to be at least two to three pages to really convey our value. Limiting an executive summary to one-page — two at the max — forces you to convey the meat of the matter in a succinct way. When Jack Welch was CEO of GE he required his direct reports to submit one-page management updates every month. That’s right, just one page. Being succinct makes you think and boil it down to what matters.

10. Where can I find more? Use hyperlinks in the executive summary, linking content and recommendations to descriptions in the detailed RFP document. Too often we make it hard for people to jump to what interests them. If people are interested in one of your ideas, make it easy for them to read more about that interest.