horsepigcow

A series of events led me recently to decide to make a really big switch – from checking into Foursquare to checking into Gowalla. Yes, Gowalla DOES give you the ability to check in everywhere at once, but there are always switching costs involved in joining a new network. New profile, find your friends. Connect this and connect that. Then learn the new ins and outs. Oh…and in this case, download a new app for my Android. Not to mention that many of my favorite apps are connected into Foursquare (like Runkeeper).

Either way, there are always switching costs. Always. Even when a product is new – like, um, Shwowp – it takes time to set everything up and learn a new behavior. And the higher the switching cost (do I need to give anything up for this switch? will it take a long time?), the less likely a person is to make it. I know this, not as a marketer, but as a customer (I’ve always been a customer first). The prize at the end of that journey (the time/effort put in) has got to outweigh the cost of the journey itself.

So, first let me tell you about my decision tree on the switch.

I’ve been a Foursquare loyalist since 2009 when I signed up for it right before SXSW. Signing up for Foursquare that year had a switching cost in itself. I used Twitter. Why did I need it? Now I’d have to check where my friends were and what they were doing in two places (mind you when Twitter started, I was loyal to Dodgeball, Dennis Crowley’s initial geo-location app). I recall telling Dan Fost in an interview that year that I was ‘yet to be convinced’ by it. Boy did I miss the boat on that one (usually I’m pretty good at picking the winners).

So when Gowalla came along shortly afterwards, I had made my switch and didn’t feel much like budging. I did what most early adopters do. I joined, claimed my ‘missrogue’ url and slapped up a profile pic. That was all you saw on Gowalla for the past 2 years. I had been there. Once.

Then a series of events fell into place that made me think about going back:

1. I spoke at Canada E-Connect, a conference for the Canadian tourism industry. At the dinner the night before my keynote, the group of organizers were having a lively debate on the advantages of Gowalla over Foursquare. They had been incredibly impressed by the Biz Dev guy, who was very responsive and really focused on creating value for their city guides based on checkins. (my status: still unconvinced)
2. The next day after my talk a very sharp dressed guy walked up to me to tell me how much he liked my talk. He happened to be the very same Biz Dev guy the group was impressed with. He introduced himself as Andy Ellwood. (my status: impressed with his style, willing to listen)
3. I ended up going to Andy’s panel on using geo-location for promoting tourism and really loved the way he described what they are doing, “A way to discover the world around you, share it with your friends, and have a record of places you’ve been. A Social Atlas/Digital Passport.” (my status: impressed with his outlook, considering, but still too early to switch)
4. Andy and I then became Twitter friends and went back and forth a bit here and there. I liked the way he thought about many things. (my status: liked Andy himself, and still considering switching, but not on the top of my priority list)
5. Then I get an email from Foursquare at one of the busiest times of my life. I barely had the chance to scan it, but it went something like, “We’ve limited the number of friends you can have, so we, basically deleted all of your friends except for the first 100.” I told a friend of mine who asked why I wasn’t following him anymore that, “I was too busy to be annoyed at the moment by Foursquare’s move, but I would take action once things died down.” In basic terms, THEY REMOVED THE SWITCHING COST. I had a choice. I could go through my thousands of followers and find my friends and follow them again, or… (my status: It was time to make a decision…and I was annoyed, so it made the decision a little easier)
6. Meanwhile, Andy contacts me to have a drink at SXSW and discuss a really wicked conversation we had on Twitter. Then he gives me the final nudge…mixed with an appropriate amount of guilt ended with a flirty emoticon, “http://gowalla.com/users/missrogue Looks like beginning of something awesome. =)”. (my status: switching)

It was a perfect switch scenario. A personal relationship formed that made me tempted to switch – in spite of the costs – then the switching costs themselves disappeared. I most likely would have switched anyway. Andy won me over. I’ve known Dennis and Naveen for ages. Not on a deep buddy-buddy level, but I had a Shake Shack shake with Naveen a couple of years back and Dennis came to a book launch party that Brian Solis and I co-hosted when our books came out. Enough to say I had a closer relationship to them than anyone from Gowalla. I still really like Dennis and Naveen, so it’s nothing personal to them. And the nice part of all of this is that I still get to ‘use’ Foursquare when I’m using Gowalla, so at the end of the day, I can be friends with everyone.

Oh…and as an added bonus: When I complained like a princess on Twitter that I would have to sit and approve friend requests all night in this switch, Andy ‘fixed’ the issue in about 5 minutes. He gave me my very own ‘approve all’ button.

The lessons here for anyone running a startup, whether you are the market leader or not:

1. Personal relationships reduce switching costs. They bring loyalty. And they matter more than anything else.
2. Reduce all other switching costs. Technical (make it dead simple). Time (make it fast). Emotional (make it compelling). Etc. (ask yourself what the switching costs are for the people you want to have use your service over other ones – even if there aren’t direct competitors – Gowalla is smart to integrate with everything else).
3. And if you are the leader, don’t take your lead for granted! Think logically about what you are changing for your users. You may be giving them the perfect OUT for making that change they have already considered. This doesn’t mean you lock people in (that’s an out in itself). It means that YOU SHOULDN’T GIVE THEM THE REASON TO LEAVE.

Off to give Gowalla a whirl. And looking forward to our drink, Andy!

Thanks so much to my friend, Jay Fichialos, now on Ma.gnolia and sending me awesome links like this one that say things like:

…the one thing I have been able to extract as the core and essential principle is the fact that people are the singlemost important elements in a company. When you think about it, “company” implies that one person is in the company of another. Or an “organization” is a system of people, and certainly not a bunch of computers or other inanimate objects. Human resources are the critical factor to winning a game of basketball (not the basketball itself), to taking a company public (lawyers are people too), to fixing a great bowl of chicken soup (the ingredients do help, but it takes a person to collect those ingredients), and so forth.

This reminded me of frustrations I had a couple of years back and an equivalent frustration I experienced lately when a dear friend told me she couldn’t attend this amazing conference on Customer Service/Satisfaction (by the good folks at Satisfaction), which would not only be an excellent boon for her knowledge on the subject, it would also benefit her employer greatly because they would have an incredibly plugged-in, cutting edge thinker on the team. This is not to mention that the customer service executives from every cool company in North America will be hungrily networking there to meet those plugged-in, cutting edge thinkers like my friend.

My frustrations occurred in a couple of different marketing positions I held at various companies, where, even though I was in charge of building community in one particular case, I was expected to hold regular office hours with the rest of the staff. Ducking out for an afternoon meetup or other community-type event was seen as ‘frivolous’ and something I should do on ‘my time’. This was an absurd idea to me and I continued to defy the notion that I should be sitting at a desk creating marketing plans rather than actually going out and meeting people face to face who are part of the community I wished to reach.

Compound this with a very astute tweet by my friend Chris Heuer (another budding author) a couple of weeks back:

Companies don’t really have conversations with customers, their employees do. People talking to people is real, beyond marketing and spin... 10:56 AM November 01, 2007

…and something really profound occurred to me: A Company is the Sum of the Social Capital of its People.

When I think about the really ‘cool’ brands out there there is always at least one person who we know and admire…who has influence and who has reams of Social Capital. You dig deeper into the company employees and you see that really dynamic and growing companies have loads of employees with smaller, but strong networks they influence. Apple, of course is a really great example of this. Who doesn’t want to be Steve Jobs, really? I mean, he even has someone who IS his fake self. But there are Apple employees who are influencers everywhere, even if they don’t appear in an official capacity all of the time. And how about the influence of the Geniuses and other Apple Store employees on people’s interaction with the brand? HUGE. [hat tip to Lloyd for that great link] I would take a leap and attribute a good portion of Apple’s fantastic growth in the past couple of years to that one-on-one interaction between employees and customers.

Of course, none of this is news or anything. It’s been pretty obvious to many people for a long time that sending your employees out into the world to build relationships with customers and potential customers is really good for your brand. D’uh.

So, why is it that my friend and many others are still expected to clock in at 8:00 a.m. and clock out at 5:00 p.m.? Why aren’t social gatherings, community involvement, courses, conferences and events and general networking encouraged more? Why isn’t everyone encouraged to blog, be on IM, have Facebook profiles and post their running commentary on Twitter? Why aren’t we encouraging every one of our employees to go out there and build the hell out of their Social Capital?

I have a theory. Tell me if I’m wrong.

We don’t value non-crappy, paper-heavy, numbers-driven work. As soon as we see someone enjoying their work, we accuse it of not being work at all. If someone takes an extra long lunch to go to a social event where they are meeting industry peers, we say things like, “Must be nice to be able to take such a long lunch break” as if that person’s extra 1/2 hour should have been spent sitting in front of their computers, working on some spreadsheet or something that would have been actual work.

Now, OF COURSE there should be some sort of definition of activities and measurements in place to ensure that everyone is accountable. I like to trust my coworkers as much as the next person, but I’ve worked with enough people to realize that loose, under-defined goals like, “Build Social Capital” are bound to lead to equally under-defined actions. If I used this new structure to hang with my same friends each and every day, it ceases being useful Capital.

According to theorists, Social Capital comes in two forms: Bonding and Bridging Capital. Bonding Capital is what we do with good friends and family: we build deep relationships of trust and care. We can count on those we have Bonding Capital with for our survival. Bonding Capital is essential to our individual survival (so these days when my 14 year old is rude to me, I tell him that he is threatening his survival by testing our Bonding Capital – works like a charm) and is what emotionally fulfills us.

Bridging Capital, on the hand, is the type of Social Capital that helps us grow and builds our careers and businesses. Bridging Capital is what you are building when you go outside of your normal group of friends and meet new people. It’s what you do when you go to conferences that have people you don’t always hang out with there. It’s what you do when you leave your office and meet others in your industry. According to Robert Putnum (Bowling Alone):

(Bridging connections) are better for linkage to external assets and for information diffusion…(and provide a)…sociological WD-40…(that can)…generate broader identities and reciprocity. (Putnum 2000: 22-23)

But even though these definitions and measurements are not currently in place, businesses can start by recognizing that a certain amount of bridging activity is necessary to encourage for all of their employees – not just those in sales and marketing. Benefits?

• The creation of Bridging Capital that will positively effect the influence of your company
• This puts your employees in the perfectly right position for coming up with awesome ideas to please your customers
• The flipside of that, which is the ability of your employees to recognize potential problems and be proactive in averting them
• The creation of plugged-in, cutting edge employees in general
• A happier, more fulfilled group of employees who feel part of their company’s growth (which they are)

I really hope that my unnamed friend shows this article to her employer and is able to attend said conference and that it resonates as well with many others. I look forward to your feedback and stories.

I’ve talked about this topic in a couple of places, but I don’t think I’ve actually posted what we ended up kind of coming up with as pretty decent measurements of the health of a community. But, perhaps I should first define what I mean by community health:

The health of a community is the gauge of where various qualitative and quantitative metrics lie in relation to the goals you set.

Heh. Right. So, what this really means is that you need to first set your goals (with an emphasis on qualitative), and next define your metrics. Of course, after all of that is set out, you can figure out how to achieve that (which is just as convoluted).

Setting Your Goals

Setting your goals is a very personal thing and not so simple. It can also lead to an emphasis on quantitative metrics (i.e. I want 500,000 new members by Christmas). In order to steer goal setting towards a more qualitative, more community conducive perspective, we like to help our clients frame their overall goal in the following statement:

“I want to create a culture of ________________”

Where the blank space is filled in with a word or a phrase to describe the kind of community you want to foster. It could be a culture of gaming or a culture of passion. It could be a culture of generosity or a culture of happiness. After you define the type of culture you want to see unfold around your product, site or service, you can start to define what exactly that means. Let’s take a culture of generosity, for instance. What does that mean? How do you want people to act within that community to promote that? What actions should be rewarded? Avoided? What should you build in to encourage this?

Creating a culture of generosity could unfold like this:

• sharing of ideas openly
• less competitive, more collaborative
• encouragement between members for sharing
• rewards for sharing and collaborating (points? gifts? private kudos?)
• mentorship program to help new people become well educated on the community
• a higher emphasis on caregiving

Of course, the site features can also help encourage this and you can start to brainstorm the ways that people can be generous with one another by using these features. As you build the list of the kind of behaviors to encourage, you will also start to understand the kind of metrics you will need to use to figure out whether or not you are successful in creating a culture of whatever it is you have chosen.

Defining Your Metrics

My good friend (and brilliant consultant) Brian Oberkirch recently sent me and some others a quick email asking how we measure the success of our community programs (I think he wanted some more ideas for his FOWA presentation). I didn’t want to give him an, “It depends” answer, so I threw out a quick list of the metrics we HAVE used, including:

• the rate of attrition, especially with new members (I think it is really telling when you drive traffic that doesn’t stick around – you will have to really examine whether you are offering something of need)
• the average length of time it takes for a newbie to become a regular contributor
• number of referrals (strength of positive word of mouth)
• multiple community crossover – if your members are part of many communities, how do they interact with your site? Flickr photos? Twittering? Etc.?
• the number giving as well as the receiving actions – eg. readers receive, posters are giving (advice, knowledge, etc.). PopSugar has a neat reward system built in for this with their gifting for contributions in the community
• community participation in gardening, policing and keeping the community a nicer place (eg. people who click on the ‘report this as spam’, people who edit the wiki for better layout, etc.)
• number of apps built off of your API (if you have one) – a good ‘number’ measure as the number of apps usually correlate with your social capital

This is in no way a comprehensive list of metrics. These are only some of what we have used recently and what I can recall about using in the past and the list evolves with every new project. I’ve actually put up a wiki page on Spread Love so that people can add to it as they see fit.

Of course I do alot of research and am interested in what others are doing on this matter. When looking around for more information, I found a pretty decent list of measurements to consider put out by Forum One with a few crossovers:

• Member engagement: activity and “investment” in community
• Member Loyalty & Satisfaction
• Membership Growth and Attrition
• Member referrals
• Quality of content and exchange: For instance, resolution time, days thread was active, ratio of validated responses. Support communities are leading the way on best practices and reporting.
• Tracking the brand through the “Community ecosystem”: Tracking brands and community members as they travel through the larger community ecosystem that spans sites, technologies and devices.
• Impact of the community on revenue: Particular attention is being paid to the value of members, both to the host communities’ revenue, and the organization’s sales or fundraising.*
• Mobile interactions with the community: including views and posts from mobiles.

I couldn’t find out how they measure investment, loyalty and satisfaction, which I gathered from looking around, they use a combination of webstats and intuition, but these are all good places to start at when thinking about how to measure how well you are reaching your goals.

[*I would add indirect revenue like evangelism, too, as one person being an evangelist for a company is worth multiple purchases]

But What About the Qualitative?

Most of these metrics are still very quantitative, though. What about the qualitative? The anecdotal? Although the numbers are directly measurable to track along the way, the truly interesting results (as well as the biggest rewards) come from the stories…the human interest pieces. They come from gathering awesome emails you receive from really happy community members or running into someone at a party that, when they find out you work for Company A, they squeal in delight and tell you how much you rock. Adversely, you may find a forum thread somewhere where someone rants about how awful their experience with you was. Maybe there is a lack of discussion altogether, which is the anti-anecdotal. Maybe you aren’t even interesting enough to be talked about.

I don’t know if any companies do this, but I’d encourage you set up internal cheers and jeers (or call them whatever means something to you) wiki pages. On the cheers wiki page, paste in the happy emails, blog posts, etc. and personal stories of positive encounter with customers. On the jeers wiki page, paste in the negative feedback, the angry emails and/or the lack of reaction at all. Don’t compare yourself to anyone else but your own goals. And don’t get down if the jeers page is full and the cheers page is empty. Think about the jeers as things to work on and customers to win over…as opportunities. Think about the cheers page as ideas for ways to create more of that…more opportunity.

When you are getting enough feedback, have weekly anecdotal meetings where everyone shares these stories and brainstorms the opportunities. You will know when you are successful on this end when you have to limit these meetings to people’s 5 favourite cheers and 5 favourite jeers each so that the meeting doesn’t last a whole day.

You can, then, attach a quantitative metric to the opportunities: how many jeers can you turn into cheers? Set a goal there, too. Start simple and add progressively more challenge. Creating more happy customers is always a good metric.

Really Important Stuff to Remember About Metrics

Metrics are rarely useful for the community members themselves. Most of what matters is experience. People may revel in the fact that there are over 25 million people signed up at the same service that they are using, but what matters is that their closest friends are using it and that they are getting value out of it. The 25 million people just have the experience in common.

Who are metrics for then? Business people. Venture capitalists. Journalists. Outsiders. People who want a number to tell the whole story (mostly because they are not part of the community itself and it’s really hard to explain the impact of a great community to an outsider). In the end, it comes down to Social Capital and as I’ve discussed, Social Capital is incredibly elusive. It is measurable, but only relative to the source (how do you measure happiness? everyone has a different experience of it), which probably makes it the loveliest, most perfectly decentralized system in the universe, which is where we are headed, but so many people can’t grasp that yet.

But hell, we need to communicate outside of the experienced boundaries of our communities, so we have metrics. We use metrics to entice more people to come and experience our communities beyond the numbers. We use metrics to try and communicate the pride we have in the amazing things happening in our communities. We sometimes have to compare to give others a reference point. But in the end, we know in our hearts of hearts the real measure is in the experience of it. The proof, as they say, is in the pudding (why do they say that, though?).

When I was in Rotterdam, I had the pleasure of hanging out with Biz Stone, co-founder of Twitter. Over and over again, people tried to get him to tell them the ‘number’. “How many people are using Twitter? Must be millions! Tens of millions!” But he wouldn’t budge. He would answer calmly, “We don’t reveal our numbers.”

I really respected that. Twitter probably does have tens of millions…egad, could even be pushing 100 million for all I know…but by Biz not revealing that number, he made people think harder about their experience of Twitter. He made people think harder about the stories of Twitter. He made people really consider the impact of twitter. A number would shadow that really important stuff. I’m glad he doesn’t tell and I hope him and the rest of the Twitter team never do.

So, there you go. This is how we currently view measurements and metrics and all of that stuff that makes the bidness world tick.