FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 1

Online Communities Are Your Best Social Strategy

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 2

Why do fewer than half of brands think their Facebook marketing works? Because big brands’ Facebook posts reach just 2% of their fans. Even when people do read your Facebook posts, 99.8% of them don’t engage with those posts and only a tiny fraction buy products as a result.

MOST BRANDS FAIL ON THE BIG SOCIAL NETWORKS

Brands are six times more likely to market on Facebook than to build a private community. But survey after survey shows that people are more likely to visit brands’ websites than to research them on Facebook and that people engage more on brands’ private communities than on their Facebook pages.

BRANDS FIND PRIVATE COMMUNITIES WORK BETTER THAN SOCIAL NETWORKS

Communities don’t only help marketers; they offer value throughout the organization. For instance, ELLE uses its Inner Circle community to learn more about its readers. Hertz uses the Hertz Hub to collaborate with customers and drive innovation. And The UPS Store uses the Small Business Buzz community to drive greater sales and loyalty.

PRIVATE COMMUNITIES HELP BRANDS IN MANY WAYS

INTRODUCTION

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 3

Social media is one of the most powerful forces the world has ever seen. It can spark revolutions, organize disaster relief efforts, and connect people from around the globe. And more than 75% of American adults use social networking sites.1 But for most brands, social tools simply haven’t lived up to their promise.

In fact, Social Media Examiner reports that fewer than half of brands think their Facebook marketing works.2 Why don’t Facebook and Twitter deliver for brands?

Sure, big social networks attract lots of people: Facebook claims nearly 1.6 billion monthly users and Twitter says it has 320 million.3 But that doesn’t mean your brand can actually reach any of those people. In 2014, the agency Ogilvy reported that brands with lots of Facebook fans reached just 2% of those fans with each post.4 And Facebook continues to push reach lower, promising brands they would “see a significant decrease in distribution.”5

YOUR FACEBOOK AND TWITTER POSTS

DON’T REACH YOUR AUDIENCE

MOST BRANDS FAIL ON FACEBOOK & TWITTER

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 4

PEOPLE DON’T ENGAGE WITH OR SHARE YOUR CONTENT ON FACEBOOK AND

TWITTER

FACEBOOK AND TWITTER USERS DON’T BUY MUCH FROM YOU

Hoping social networks will help you engage with customers and prospects? Think again. Social measurement firm Socialbakers found large Facebook pages get engagement from just 0.2% of their fans with each post.6 On Twitter, that number falls to 0.07%.7 And you can’t count on fans and followers to share your messages, either: According to Forrester, “only about 60% of the marketers who use word of mouth say it delivers them business value.”8

Even when social networks deliver traffic, they rarely deliver revenue. Testing firm Monetate reports that website visitors from social networks are twice as likely to bounce off your site as visitors from search engines.9 Monetate also says social visitors are only half as likely to add items to their shopping carts as email visitors, convert half as often as search visitors, and spend less than visitors from other channels as well.10 No wonder digital advertising vendor Kenshoo reports that in 2015 “social conversion rates remained low relative to search.”11

MOST BRANDS FAIL ON FACEBOOK & TWITTER... continued

Go directly to the brand’s website

Research the brand

Ask their friendsabout it

Follow onsocial media

Purchaseproduct

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 5

Facebook and Twitter may not deliver the results brands are looking for -- but these large social networks aren’t the only way companies can engage prospects and customers online. In fact, while brands are less likely to use private online communities than they are to use big social networks, companies that use communities report outstanding results.

Big social networks generate mountains of media coverage, so it’s little surprise the vast majority of brands focus on these sites. Social Media Examiner found that in 2015, 93% of brands use Facebook and another 79% use Twitter. 12 By comparison, private brand communities generate relatively little adoption: Just 14% of the brands surveyed by Social Media Examiner said they build private communities for their prospects and customers. 13

TOO MANY BRANDS IGNORE PRIVATE COMMUNITIES

BRANDS FIND THAT COMMUNITIES WORK BETTER THAN SOCIAL NETWORKS

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 6

Brands may not focus on their own sites, but surveys show that consumers do. According to Forrester, “US online adults who want to stay in touch with your company are almost three times more likely to visit your website than to engage with you on Facebook.” Ogilvy and SurveyMonkey found that even highly active social networkers are more likely to research products on brand sites than by following brands in social media. And Nielsen reports that 70% of people online trust branded websites, while just 46% trust ads on social networks.

YOUR WEBSITE IS ONE OF YOUR MOST POWERFUL BRAND

ASSETS

People who visit brands’ private communities are 500 times more likely to interact than people who follow brands on Facebook or Twitter. That’s why brands as varied as magazine publishers, car rental companies, and package delivery firms profess their love for private communities. And it’s why in a November 10, 2014 blog post, Forrester analyst Nate Elliott wrote that “both B2B and B2C marketers have found branded communities create more loyalty and lifetime value than Facebook and Twitter marketing.”

BRANDS THAT ADD COMMUNITIES TO THEIR SITE SUCCEED MORE OFTEN

BRANDS FIND THAT COMMUNITIES WORK BETTER THAN SOCIAL NETWORKS... continued

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 7

Branded online communities aren’t simply marketing tools; they offer value to market researchers, product strategists, customer service teams, and sales organizations as well.

The world’s largest fashion magazine knows its advertisers rely on audience data -- so it worked with Passenger to build the ELLE Inner Circle community. The magazine offers Inner Circle members live chats, photo albums, discussions, and other exclusive content. It also regularly collects data on community members using Passenger’s integration with survey platform Qualtrics. ELLE uses Inner Circle as a real-time resource to generate quick insights for its advertisers -- helping them make better media and messaging decisions, and even giving advertisers a chance to test creative options.

ELLE USES ITS COMMUNITY TO CREATE DISCOVERY AND LEARNING

PRIVATE COMMUNITIES HELP BRANDS IN MANY DIFFERENT WAYS

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 8

Hertz needs to make sure its 13,000 global car rental locations offer the best product in the industry. The company worked with Passenger to build Hertz Hub, a private online community that leverage customers to drive innovation. Hertz members can get a first look at new programs and product ideas and give their feedback. Customers can also offer the company guidance on which cars they’d like to rent and provide opinions about upcoming marketing campaigns. The community has more than doubled input from millennial customers, and more than doubled the number of millennial Hertz members as well. Hertz Hub has also saved the company tens of thousands of dollars in research costs.

HERTZ USES ITS COMMUNITY TO DRIVE INNOVATION

PRIVATE COMMUNITIES HELP BRANDS IN MANY DIFFERENT WAYS... continued

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 9

The world’s largest franchisor of business service centers understands its customers have options, and that it must work hard to keep those customers coming back. The brand worked with Passenger and agency Doner to build Small Biz Buzz, an online community targeted to small business owners. The UPS Store surveys community members on the in-store experience so the company can improve store designs. The brand learns about products and services customers would like to see, like loyalty cards. And The UPS Store tests promotions and ad campaigns to see which are most likely to get customers back in store.

THE UPS STORE USES ITS COMMUNITY TO INCREASE LOYALTY AND SALES

PRIVATE COMMUNITIES HELP BRANDS IN MANY DIFFERENT WAYS... continued

FROM PURCHASE TO PROMOTION: USING ONLINE COMMUNITIES TO INSPIRE BRAND LOYALTY 10

1. http://www.pewinternet.org/2015/10/08/social-networking-usage-2005-2015/

2. http://www.socialmediaexaminer.com/social-media-marketing-industry-report-2015/

3. http://newsroom.fb.com/company-info and https://about.twitter.com/company

4. http://social.ogilvy.com/facebook-zero-considering-life-after-the-demise-of-organic-reach/

5. http://newsroom.fb.com/news/2014/11/news-feed-fyi-reducing-overly-promotional-page-posts-in-news-feed/

6. http://www.socialbakers.com/blog/2384-measuring-the-right-social-kpis

7. http://www.socialbakers.com/blog/2321-instagram-blows-away-twitter-on-brand-engagement-by-almost-50x

8. https://www.forrester.com/Vendor+Landscape+WordOfMouth+Platforms/fulltext/-/E-res120907

9. http://info.monetate.com/rs/092-TQN-434/images/Monetate%20EQ3%202015%20-%20The%20Cross-Channel%20Conversa

tion-web%20v1.pdf

10. http://info.monetate.com/rs/092-TQN-434/images/Monetate%20EQ3%202015%20-%20The%20Cross-Channel%20Conversa

tion-web%20v1.pdf

11. http://kenshoo.com/digitalmarketingtechnology/wp-content/uploads/2016/01/2015-Online-Retail-Holiday-Season-Report.pd

12. http://www.socialmediaexaminer.com/social-media-marketing-industry-report-2015/

13. Note: “brand communities” are referred to as “forums” in the original research. Source: http://www.socialmediaexaminer.com/

social-media-marketing-industry-report-2015/

14. https://www.forrester.com/Social+Relationship+Strategies+That+Work/fulltext/-/E-RES113002

15. http://www.slideshare.net/socialogilvy/how-to-cultivate-brand-advocacy

16. http://www.nielsen.com/content/dam/nielsenglobal/apac/docs/reports/2015/nielsen-global-trust-in-advertising-report-septem

ber-2015.pdf

17. http://blogs.forrester.com/nate_elliott/14-11-10-as_social_media_matures_branded_communities_will_make_a_comeback_i

n_2015

18. http://blogs.forrester.com/nate_elliott/14-11-10-as_social_media_matures_branded_communities_will_make_a_comeback_

in_2015

19. http://cdn2.hubspot.net/hubfs/232329/ELLE_Case_Study.pdf

20. http://cdn2.hubspot.net/hubfs/232329/Passenger_Online_Community_Hertz_Case_Study.pdf

21. http://cdn2.hubspot.net/hubfs/232329/Doner_UPS_Store_Case_Study.pdf

SOURCES