Saturday, June 9, 2012

Book review: Marketing in the groundswell excerpt about Constant Contact

 Case Study
Constant Contact: Energizing by Creating a Community

What’s the difference between spam and legitimate email?

Simple. Spam is email you don’t want.

But on that simple question hangs the success of a company called Constant Contact. Constant Contact is an email marketing company. The focus at Constant Contact is a on helping small business stay in touch with their own customers. If those customers have provided their email address, the small-business owner can drum up business by sending email newsletters, notes about what ‘s on sale this month, and reminders  for people to get their teeth or chimneys cleaned. But by law (the CAN-SPAM Act), if people get annoyed, they can opt out of the email list. Legitimate email marketers comply with this rule. Spammers often don’t.

As Gail  Goodman, Constant Contact’s CEO, explains, the lion share of growth at Constant Contact comes from word of mouth. The company encourages this with a referral program-get a friend to sign up, and you get a $30 credit he gets a $30 credit. Satisfaction is crucial because customers can stop paying the monthly fees at any time and opt out.

So when Gail’s head of customer service, Maureen Royal, proposed creating community forum where customers could encourage each other, Gail was intrigued. Maureen had already proved that  Constant Contact’s customer loved to schmooze by assembling them., a dozen or so at a time, at dinners  in various cities. Why not let them connect  online?

Small-Business owners are active participants in the groundswell.

Constant Contact’s  “ConnectUp!” community launch in 2005, and it worked. ConnectUp!  Now  get s participation from thirteen thousand people, 10 percent of its customers. It’s highly active, with over six thousand posts in thirty-nine forums. People are answering each other’s question, encouraging new sign-ups to stick with it, and generating referrals. Constant Contact forum is , basically, a home for energized customer.
Thirty percent  of community members generate referrals. Constant Contact estimates that each referral that turns into a customer  generates a lifetime revenue of almost $1,500 (the cost is the $60 credit). Constant Contact revenues grew 88 percent between 2005 and 2006, beating the previous year’s 82 percent growth. This company is on a roll, and energizing its customers in a community is stoking the growth.

To understand why community works to drive revenue for Constant Contact, look first at its customer base. Obviously, they’re all online. But small-business people are a perfect  target for community. They share common problems-running a company is tough, whether you’re a restauranteur or plumbing supplier. They’re mostly not technical or marketing whizzes, so they can help from those who’ve puzzled out the right ways to do email. And they like to  brag about their successes to each other. So when Constant Contact encourage them to join the community   as they logging into their email marketing tools, many did.

Constant Contact’s customers also shared another critical interest: they didn’t want to be seen as spammers.

The first heated discussion on Constant Contact’s newly minted forum concerned spam. And it threatened to get out of hand. Some respondents complained about how the company put their accounts on hold based on too many complaints. Others defended Constant Contacts, pointing out that its reputation as a legitimate email marketer-not a spammer-depended on this activity. In the end Gail put a Web seminar explaining the company policy, and that settled the issue, the company responded, and its members went back to sending emails and referring new customers.

Even now the community has a self-supporting feeling. Altruistic  motivations are powerful forces here. Kelly Rusk (known in the Constant Contact community as “cardcommunications”  a twenty-three year-old Canadian working as emarketing specialist, feels good when she gets to answer post like this:
BadAndy 80

That’s me, the bad bad spammer...I had 6 spam reports out of 2000 emails, which is over the 1/1000 that they consider normal.

I waited on hold for 20 minutes to unfreeze my account and some guy acted like I was a bad guy for having 6. He genuinely sounded MAD at me. I couldn’t believe my ears when he threatened me with “one last chance” before I was booted off the Constant  Contact system.


There’s no excuse for the person on the phone to be rude to you.
HOWEVER, Constant Contact is just protecting their integrity-because... every spam complaint to very account is potentially a blacklist from the ISP.

If you find another email service provider who isn’t so concerned about spam complaints- I would worry about them- because it’s possible their mail is ending up in spam folders everywhere or just downright blocked by ISP’s.

I would suggest (fine tunning) your permission reminder and (writing) is a specifically as possible (i.e. you are receiving this email because you filled out a request for info from on our website and asked to receive email communications from us)

Take a look  at what Kelly is doing for Constant Contact. If BadAndy 80 got his list without asking people’s permission, he’ll give up on Constant Contact, taking his bad reputation with him. If he’s just made a mistake, she’s educated him and he might change how he does business. And for anybody else who read his exchange, she’s educated them. She’s helped Constant Contact improve the behavior and integrity of its customer base, an asset that helps all its customers prevent being perceived as spammers. And education in the community is a heck of a lot cheaper than shutting people off.

As Maureen says, “It’s about making them feel like a stakeholder. If they really feel that way, they are a part of our success. Who would leave Constant Contact when they feel that way?”

Lesson from Energizing Community

What can you take away from Constant Contact’s experience with its community?

First, business-to-business companies have an advantage in building companies, Business people form communities around their roles-in this case, as email marketers in small business. In fact, all of company’s business customers are far more likely to feel they have something in common than a consumer company’s customers-because they’re all trying to get the same work done. Consumer companies’ may feel this affinity (like Mini owners),or they may not (like eBag’s luggage customers).

Second, communities can get out of hand. Gail and Maureen watch the first spam discussions with increasing alarm. To their credit, they took action and turned the community’s attitude around to their advantage. Don’t start a community until you’ve thought through what you’ll do if conflicts like this rise. (And shutting off community members who say negative things isn’t an option-they may well set up camp in a private community where you’ve got no influence over them at all.)

Finally, be sure you know what your objectives are in going in. Constant Contact’s community was designed from the start to energize customers. All the activity in the community (like the “show off your best campaign” section that’s just begun) is about reinforcing positive behaviors, encouraging new customers, and generating referrals. This means Gail and Maureen can measure their success- a critical element of real groundswell thinking.

Excerpt from Marketing in the groundswell – Charlene Li and Josh Bernoff

Josh Bernoff, one of the authors of Groundswell, explains the history of the award in his blog here. Each year we review multiple nominations across various categories of social technology use; we identify the examples we believe best demonstrate the criteria for winning each award. We have categories that include internal and external uses of social technologies, and we're especially interested to see examples of strong collaboration between IT and Marketing.

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