You’ve heard it before…people do not want to hear from companies anymore, they want to hear from other people. Well here comes some fresh data to back that up.

IBM recently released its new CEO Global Study, in which they also interviewed over 1,000 consumers to see how they buy. 53% of the respondents said they use the web to compare prices and features before buying - with 25% saying they do it from their mobile phone while shopping. One in 10 will text their friends and family while being in the store to get or share information about the product.

That trend will inevitably continue, and the only way for you to capitalize on this in the long run is by getting all your employees involved with your customers.

Someone asked me what the three most under-leveraged opportunities for companies who offer online communities are.

I answered:

• The ability for companies to engage all their constituencies in transforming their core business processes - including employees, customer champions and also their detractors.
• The ability for companies to leverage online communities in a way that enables them to truly move the needle - as I discussed here.
• And the opportunity for companies to completely transform the office of the CMO - as I discussed here.

What do you think are the three most under-leveraged opportunities in online communities and social media in general?

“Campaign 2.008: Politicians Have Yet to Realize the Full Potential of New Media,” featured in the current issue of The Public Relations Strategist, offers some diverse perspectives on how social marketing is effecting the U.S. Presidential campaign. Written by former political reporter Ed Cafasso, managing director of MS&L, the article includes views from:

• Randy Kluver, communications professor, Texas A&M University
• Bill Rice, president, Web Marketing Association
• J. Barbush, associate creating director at at ad agency RPA
• And yours truly, Lois Kelly

Unfortunately the magazine, published by the Public Relations Society of America, isn’t available online, but if you click here and scroll down to Articles you can get a PDF.

“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.

All strategic social media initiatives require change management to some degree. To figure out an organization’s social media “readiness” and how much change management will be needed – and in what areas – SAP’s Steve Mann has developed a “social quotient” test/analysis. Where doew your company socre?

You’ve heard it before – most breakthrough innovations happen at the edges or at the intersections of various disciplines.

The latest wave of marketing innovation is no different – although we prefer to think about it as happening at the SEAMS™, which is an acronym that reflects the various steps that you will need to navigate through in order to truly capitalize on Marketing 2.0 potential.

As I have written in the past, the marketing end goal has not changed - it still is to create a customer. It’s everything in between to get to that goal that has changed.

Some companies will advise you to start with social media based marketing 2.0 programs by simply monitoring the new social media channels, others will build you communities that are in fact nothing more than fancy web sites – but neither of them are going to be enough to enable you to capitalize on the fundamental changes that is rocking our industry. The only way to get the full benefits from the changes afoot is by understanding how to navigate the SEAMS™ of Marketing Innovation.

Understanding the SEAMS™ of Social Media powered Marketing 2.0

Sense – the best place to start is by going beyond listening to sensing what is truly happening in the marketplace. Sensing is not just about understanding what is being said, it is understanding what is being meant and make that available as actionable knowledge to the various departments within your company – product innovation, customer support, marketing, sales, etc. Sense also means that whatever you do has to make sense for your business – it’s got to deliver real, impactful and measurable results.

Engage – the next logical step is to go beyond sensing and to start engaging your various constituencies (i.e., customers, prospects, promoters, detractors, partners, etc.) on their own turf. This is not about them engaging with or through your advertising and other marketing campaigns – this is about good old fashioned engagement – talking with one another instead of at them. If they do not have a natural hangout place, there may be an opportunity for you to host a virtual waterhole for them – but more on that later.

Activate – once you get a better handle on the new dynamics of social media and marketing 2.0, you need to devise a plan to activate your business processes with these new-found capabilities. Product innovation, customer support, PR and thought leadership, lead generation, awareness creation, and other processes can all be transformed and made to work again by externalizing them to include your various constituencies as part of the processes instead of being the target of those processes.

Measure – of course you will have to justify all this new stuff to your management and to yourself. Not only is it expected that you can measure your programs, it is also more critical than ever to understand what to measure and how to set goals. Unlike with more traditional marketing programs, where measurements do not interact with the actual programs, launching social media initiatives and marketing 2.0 programs with the wrongs measurement goals can kill or maim the program in the long run.

Storytelling – storytelling is important in all aspect of the SEAMS™ method. Whether you engage with your audiences, or get them involved as part of activating various business processes, you need stories that will be compelling and will easily be retold. Even when you are measuring the effectiveness of your programs you should always be on the lookout for interesting anecdotal stories – they will gain a life of their own and sometimes do more wonders than stats in conveying the importance and success of your efforts.

What do you think?

With the average CMO tenure being 27 month, you wonder why there are not more companies and chief marketing officers trying to reinvent the role of the CMO. It seems like the time for the CMO 2.0 has come…

As I have written before, by developing a deep understanding of marketing 2.0 and by being able to operationalize its components in meaningful and scalable ways CMO’s could transform their own role significantly.

Marketing 2.0 means externalizing all of your marketing processes - doing marketing with all your employees, customers, partners, prospects and detractors instead of at them. Marketing success is all about co-marketing these days - co-market, co-sell, co-develop, co-invent, co-support, etc.

If done properly, marketing will work again - predictably and with decreasing costs. By executing a Marketing 2.0 strategy successfully, a CMO will not only be able to take the credit for the success of the marketing department, he or she could also regain a strategic seat at the executive table - that of chief representative of the voice of the customer within the company. Because unlike with advertising where you do some research upfront on your target audience and then “target” them, when you co-market with your audience you develop a two way conversation and a continuous market learning environment.

So how are marketers doing with that? I think it’s safe to say that there are three classes of CMO dabbling with Marketing 2.0 strategies - and a fourth category that does not believe in all this new stuff and is still slugging it out the old ways.

First is the CMO who does not get it, the one who sees how other companies gain benefits from Marketing 2.0 programs - but has no idea what the underlying forces are that make this all work. They may commission their agency to build them a “community,” not really understanding how that is different from a pretty web site, and then use the community as another vehicle through which to do marketing campaigns. Thankfully those CMO’s fail fast - but not before muddying up the waters for their peers and successors.

Then there is the CMO who sort of gets it but then again not enough. They are those people who realize the benefits that can be derived from those programs but are not yet ready to make a big bet on them. They may encourage some of their staffers to dabble with Marketing 2.0 programs, but continuously underfund those efforts so that it does not make it on their day-to-day dashboards and so that it doesn’t move the needle for their company in terms of results. They convince themselves that this is a good learning environment for the future, not realizing that the fundamentals of small scale Marketing 2.0 programs are drastically different from large scale efforts.

And then there are the bold CMO’s who realize that this is a make or break it time for marketing and are willing to go big on Marketing 2.0. They are the game-changers who will force anyone else to jump on the bandwagon or get left behind.

I will try to get some CMO 2.0 types to do open mic interviews with us in the Marketing 2.0 group soon. If you have a candidate who might be interested in doing this with us, let me know by emailing me at francois[at]marketingtwo.com. Maybe we can interview them together!

Following the launch of the 2008 Tribalization of Business study and the three webinars which were attended by more than 1,500 people, we developed a resource page with all the commentary that we could find so far - you can access it here.

We also got way more questions than we could answer during the webinars - which is why we decided to run a more Q&A focused webinar for all those who attended our previous webinars. The Q&A webinar will take place on September 9th at 1pm ET and you can register for it here - we hope to see you there.

We are also gearing up to start the surveys and interviews for the 2009 Tribalization of Business Study. If you have any suggestions or would like to participate, please let us know by emailing me at francois [at] beelinelabs.com.

In the webinar today on the 2008 Tribalization of Business Study that we did with Deloitte and The Society of New Communications Research it was interesting to see how more attendees who attended the webinar had their communities managed by IT rather than by Marketing. Of course, the poll is not scientific and does not reflect the percentage of companies who have their communities managed by IT, as multiple attendees could belong to the same company - but it is an interesting trend that somewhat confirmed a recent Forrester report that got some commentary in the blogosphere.

So is it a good idea to have your community efforts led by IT, or not?

Personally I think it is not a good idea for two reasons. First off, the default first step that you would expect an IT department to focus on is technology. And as we have found and documented, that is the wrong place to start. If your community will not survive in a discussion thread it will not survive anywhere. The key forces generating dynamics of increasing returns are content, members, member profiles and transaction - not the technology infrastructure nor the social infrastructure as described in this post.

The second reason why IT may be the wrong place to start is because if they get the budget and the mandate to build a community, they will do exactly that - build one. And yet your community may already exist somewhere else - on Facebook, Yahoo Groups, or in some other user-started community like the Tivo community. If that is the case then the best results from leveraging communities will be gained from engaging with the community on their existing turf instead of going through the expense of trying to get them to relocate on your turf.

What is your opinion?

The 2008 Tribalization of Business Study that was released last week led a lot of people to conclude that online communities do not work and that companies are spending too much money on making them happen.

Well - there is some of that and then there is a whole other side to the story that we uncovered as part of the study.

Let me use this post to clarify some of the misunderstandings in the interpretations of the business community study results.

Do most online communities indeed fail?

In fact we found many very successful community examples in the companies that participated in the study - many of them well known and well documented case studies, some less so. We should also point out that most communities that were part of the study are less than 1 year old - so we do not really know whether they are successes or failures.

It is true that many communities fail, and will continue to do so. When they do, however, they do so for very similar reasons - so you’d think it should be fairly easy to avoid the pitfalls.

The first reason is that many companies who embark on community initiatives are putting their company or product at the center of the effort. As many pointed out, that is obviously WRONG - you need to put the community member at the center and make sure that there is some passion around the initiative.

Do companies spend too much on Technology?

The second main reason for community failures, and one that got misinterpreted by many, is that companies are starting community initiatives by focusing on the technology first. It’s not that they are spending too much on technology, it’s that the technology platform is not what is going to result in the dynamics of increasing return that characterize successful communities.

Should all companies have community initiatives?

If you can create a place for your customers and prospects to come and share their passion, and that place does not yet exist, then you should absolutely try to have a community initiative. But don’t be blinded by “the not invented here” syndrome - maybe the best way for your company to leverage communities is to go on Facebook, MySpace or some other community that is user controlled, like the Tivo community used to be.

As some pointed out, there is another big reason why companies should always think about affiliating with other communities - and that is that people will only participate in a limited number of communities. I won’t participate in a Bank of America small business community and a Microsoft small business community and maybe a few others - I only have so much bandwidth.

When is $1M too much to spend on a community?

Many jumped on the bandwagon that it is unbelievable for companies to spend $1M on customer communities…

Maybe yes, maybe no…

If you are small startup, then $1M is definitely way too much. If you are a bigger company and spend $1M on designing a slick community with worthless technology bells and whistles, then that is too much to. But as I wrote by using the example of Bank Of America, in some cases companies are not spending enough to make a difference with their online community. If you are a Fortune 50 company with billions of dollars in revenues, and routinely spend multiple millions of dollars on advertising media, then only spending a few hundred thousand dollars or even a million dollars on your community will just not move the needle. And if the goal of everything you do is to create new customers in a way that will make a difference for your company, then you need to invest appropriately.

Now if you are going to spend $1M - you have to make sure that the investments need to be made in content creation, moderation and awareness development (no, I did not say advertising or direct mail ) to support large numbers of users.

Do CMOs get it?

Talk about a loaded question…but since many were quick to dismiss the capabilities of marketers it is one that I thought should be addressed.

And the answer again is - some do, some don’t, and many are trying to figure things out.

Some are indeed looking at communities as another channel through which to interrupt their customers and prospects with product messages - and most of them fail fast and miserably.

Some don’t quite get what they inherited and keep it small and contained so that it does not make it on their radar screen.

And some know that it is transforming their role and giving them a renewed chance to be the key market strategist at the executive table and the representative of the voice of the customer within their company - and those are the ones who are reaping all the gains.

So, again - do most communities fail?

Our study did not show that. But yes, many community initiatives do fail - either because nobody comes (or they come once and then never come again), or because they fail to move the needle for companies and do therefore not receive the executive attention that they deserve. As I said before, the reasons why they fail are very similar from one case to the next and should therefore be avoidable. But there are many case studies where companies delivered game changing results to their company’s bottom line - and the reason why they succeeded are very similar as well.