"Tolerate nothing less than 'Departmental excellence and coolness.'" Tom Peters
Diane Hessan is President and CEO of Communispace, one of the fastest growing social networking companies in the country, a pioneer in creating online communities to help marketers deeply engage customers. The company has built and managed more than 350 private online customer communities for an impressive collection of Fortune 500 companies. Communispace's revenues have nearly doubled year over year for the past three years, and it has received a number of awards including the Massachusetts Technology Leadership Council's Best Social Media Company of the Year, the Greater Boston Chamber of Commerce's Award for Business Excellence. Diane came to found Communispace from a 30-year career helping companies become customer-focused. She's coauthor of Customer-Centered Growth: Five Strategies for Building Competitive Advantage. She has received many awards and citations for her leadership and workplace innovation, including Ernst & Young's Regional Entrepreneur of the Year and "Best Boss" from Winning Workplaces/Fortune Small Business. In addition to her professional recognition, Diane is a highly sought-after speaker and expert in the social networking arena. Also, she's co-founder of The Sound Bytes, an a cappella group that writes lyrics about business and performs at major conferences.
tompeters.com asks ...
In the interest of full disclosure, you know Tom Peters quite well.
DH: We met around 15 years ago while filming a roundtable discussion of five gurus. I recall that Tom, Nicholas Negroponte, and I were three of the five, and Nicholas was the serious one.
That sounds like a fun panel.
DH: It was. I met Tom while sitting next to him when they were putting makeup on us.
Tom usually doesn't let them put makeup on him.
DH: That's how I should tell the story. Although Tom does not like wearing makeup, he put up with it, just to be able to have a conversation with me. [Laughter] I was very passionate about what Tom was doing at the time, because I have spent my entire professional life trying to help companies listen to their customers. So when he wrote, "Get close to your customers," and described it as strategically critical, I just couldn't spend enough time with him. I was always passionate about that, but he really made it a game changer.
He's on your Board of Advisors?
DH: That's correct.
What does Communispace do?
DH: We are using the Web to transform the way the companies listen to their customers. Communispace helps bring the customer to life for major brands. We do that by building online communities , proprietary to each client company, giving them a continuous connection to their target consumers. The results? Deep insights, very fast, at half the cost of traditional methods. We've been doing this since 2000. It's a hot business now because all of a sudden we're not only "next-generation market research", but we're also social media. Our solution is turnkey: we build the sites, recruit and screen consumers, facilitate their ongoing conversations, analyze and report on the results, and more. The client gets an asset called Voice of the Customer that they can use on a continuous basis.
I'm glad you filled that in. For instance, I think Meredith Corporation, an umbrella group for a number of women-oriented magazines such as Ladies Home Journal, is one of your clients. I went to ladieshomejournal.com, and on their navigation bar there's something called community. When I click on community, am I then entering the world of Communispace?
DH: No. When you're clicking on community, my guess is that you are getting connected to a public site created by Meredith that allows their readers to come online and engage with each other. Our Meredith community is a private group and our members most likely had a voice in how the public community looks and works. Meredith is transforming from a conventional magazine publishing company to a 21st century media and marketing company that serves women.. Doing that requires that they get really clear about who their customers are, what's going on in their lives, how they use the Web, what they think about the world, and a hundred other questions. Then they build their marketing strategy around what really works for those customers.
Sometimes our communities are called a "focus group on steroids". If a focus group is ten people sitting in a room for an hour, Communispace is 400 people sitting in that room all the time. Meredith thus has a way to ensure that what they do resonates with its customers - and this drives their growth agenda. Listening is a really underrated marketing strategy.
So you help your clients figure out how best to communicate with their customers?
DH: Look at the economy: it's a terrible time to lose touch with customers. Ask any CEO, "How're you going to manage through these times? How are you going to grow once you get out of them?" They'll say, "The most important thing we've got to do is to understand our customers."
Why would you want to do that? Faster innovation, more effective marketing, guidance around strategy, increased loyalty, or just staying current. Good research doesn't have to be "ad hoc". A community provides continuity so that listening to customers is no longer a "project" or a "study".
I saw a mini-case study at your site about HP. A woman at HP spoke about getting customers to help them with the design of things—the look and feel—and maybe running a new website designed by customers.
I'm wondering, does this get much more strategic than that? Are they looking to these customers to influence strategic decisions for a company?
DH: Absolutely. What do I mean by that? Dozens of innovations have come out of our communities. Now remember, it's not like a client says to the consumer, "Gee, we need a new product idea" and the consumer says, "Gee, Kraft, I think you need 100 calorie packs. Here's what it should look like."
Unfortunately, it doesn't quite work that way.
What the really great marketers will also do is not just test ideas; they'll be far more exploratory. We'll have people keeping a diary of what's going on in their lives, making a video tour of their home, making a collage, or taking photographs of the things that really matter to them. There are a million other creative activities where you're not necessarily saying, "Give us a great idea for a new product." You are trying to understand consumers in a much more fundamental way. —to truly walk in their shoes.
People are very often more honest when they're online. If you create a community and you build a lot of trust, people will tell you things that they've never talked about before. The insights that you gain are often profound.
Another upside to using a community is speed. An executive could say, "Oh damn, it's 3:30, I have a big presentation tomorrow, and I need an early read on this particular idea or issue." To deliver on this, we don't have to go out and start recruiting a bunch of people to help us, because they're already there. We can get a client an early read by 9 o'clock that night, and executives just love that.
These folks in the communities are that reliable?
DH: If you run the community well, yes. We've been doing this since 2000. and over the years, we've made a huge number of mistakes. At this point, given it's the only thing we do, we're really experienced at it.
I read that Communispace was originally a software service that companies used internally for collaboration. Is that true?
DH: It was, that's true.
You turned that inside out. How did that shift happen?
DH: We had one idea, and we were really struggling with it. We were having a hard time getting people to use the software. We were trying to get employees to collaborate with each other. It was "nice to have" in the view of organizations, at least in 2000. It wasn't mission critical.
We had a lucky day. We were about to launch an internal community at Hallmark. And the client said to me, "I think you guys are terrific, but I'm worried no one is going to use the software." And I confessed, "I'm worried no one is going to use it either." [Laughter]
He said, "I have an idea. Forty percent of our growth over the next five years needs to come from products and services we don't currently have. So what if we put consumers in here, brought them together, listened to them, asked them questions, and had them help us grow. What about that?"
DH: I said, "Wow, I wrote a book about that!" [Customer-Centered Growth] We tried it. It worked. The consumers were in there all the time and we started getting really interesting information right away. And based on that client's idea and our trying it, we totally repositioned the business in 2001 to focus solely on customer communities.
But back in 2001, I'd say we're building online communities and people would say, "What's that? Lonely menopausal women going online to talk about their hot flashes?"
[Laughter] I'm glad you said that and not me.
DH: I know. Communities were perceived to be fluff at the time. And oh, how the world has changed. For instance, now there are a lot of companies creating employee communities. I think of them as communities of practice. They're places for people to come online and collaborate with each other.
You've recently added a blog to your Communispace.com site.
DH: That's right. We're not exactly the first ones, eh? We were among the first ones to build a customer community, we created a new space in the industry, but we're definitely not the first to blog!
So was this a matter of the cobbler's kids not having shoes, or did you just not see the value in having a blog? I'm curious as to why it took so long, and why you then decided to start one.
DH: True confession, I resisted having a blog. My perception of blogs was that most of them were monologues, one-way conversations. I believed that we had to be models of dialogue, so I didn't think it was critical for us.
So we just never made it a priority.
Okay. But then something happened.
DH: This won't sound very inspired. We're not a huge company, but at Communispace, our internal think tank spends a million dollars a year on research. We study our client communities in order to get better all the time—and to address any questions that a client would want to ask.
For example, if clients ask, "Are the people in the community biased?" we want to be able to answer them with integrity. Our research results are often published as white papers on our website. And guess what? We have so much great research, but accessing it was a pain in the neck for people. Somebody would say, "I want to see your paper on the Myers Briggs profile of people who are typically in a community." And we wouldn't even be able to find it on our website.
We finally admitted that we have a lot of knowledge to share and we were making it very difficult for people to actually get to it. We realized that we needed a voice.
Are the white papers for clients or for anyone? I got the impression that there may be more complete versions of the information elsewhere.
DH: If what you were looking at was not a very detailed case study, it's probably because the client doesn't want to tell everything. We have confidentiality agreements with a lot of our clients because they don't want the world to know what they're doing. It's their secret weapon.
Maybe Web 3.0 will bring people to the point where they're willing to share more. I've worked with some other organizations, and they're starting blogs. Their blogs skim the surface of what they do. I keep thinking if you put some real information out there that people could use in their day-to-day lives, you'd have a much higher readership, and you'd probably have a lot more clients. Yet the word proprietary always gets in the way.
DH: It does. We have some clients who are willing to share what they're up to. It's a great contribution when they're willing to do that. But not everybody is there.
This might sound silly, but the other breakthrough for us with the blogging decision was realizing that we had lots of people who had things to say. It wasn't just me, and it wasn't just the people who were doing our research. It was a Communispace professional who was spending all day talking to millennials online, for instance. His perspective is just different than the way I think about the world, because he's 31, and not 54. We have about 12 different people who are blogging. Nobody edits anything. Whatever they have to say goes up.
DH: We still have a long way to go, but we're getting a lot of advice from people who call us and say, "You know, I have another idea for how you can do some innovative things." So we're working on it.
Are comments enabled at your blog?
DH: Oh yes! Are you kidding? I'd never do a blog without comments. Look at our business. Everything we do is about dialogue. The way I would measure the success of our blog is not how many people come on and read it; it would be the degree to which people are engaged. So a perfect blog would be one where every blog post had a hundred comments.
That's how Tom Peters measures the success of a blog post, by the number of comments it garners. The problem is you get into some really silly stuff. And nine times out of ten the comments veer off course before somebody brings them back on track. We take a very laissez-faire attitude toward the blog. I'm a very strong believer in the fact that a community polices itself. When a community member weighs in, it's much more effective than somebody on staff.
DH: Yes, and the notion of "on track" is subjective. In our client communities, when the members talk to each other about their lives instead of our clients' brands, you could say that's off track, but it's often where the gold is. It's the same for our blog. As long as people are engaged, that's a good thing.
Oh yes, you have to engage in the dialogue. You have to blend in, even though you are running it. It's a little tricky.
DH: You said something important, which is that Tom believes the measure of success is how many comments you have on the blog. If that is your goal, then the way that you do this is totally different than if you were more concerned with how many visitors you had to your blog. In our communities, our primary measure of success is participation. We don't want people to come into the community and read. We want people to come into the community and participate.
There are people out there who say that in a typical community of a thousand people, one percent of the people participate, another ten percent will lurk, and the rest never show up. With what we're doing, that would be a recipe for disaster.
The measure of success is creating a community where 60 or 70 percent of the people who are members of the community participate in the conversation. They actually say something, come up with an idea, participate in a brainstorm, or fill out a survey. How do we get engagement that high? You design it that way, just like when you design a blog against that kind of an objective. It's totally different than building a community where you want as many visitors as possible, which is another great goal. It's just not what you do if you're trying to get deep insight.
Every once in awhile we get great insights from our community. They just pop out spontaneously from the conversation. You're sort of selecting a jury, in a larger scale, when you put together a community for a client.
DH: It's not always a jury. I saw an article in the Wall Street Journal about how automotive executives are going to visit somebody's home. They'll watch them cook and talk about it. People are hungry for the nuance, the texture, and the emotion behind what's going on with other people.
In 2009, you don't need to go to somebody's home to be able to get that kind of information. With an online community, you can have people opening up their homes to you all the time. It's not always a jury. Sometimes it's just a way for consumers to invite you into their lives. And if you can do that, you can take the guesswork out of a lot of challenges.
It sounds like fun. Does this get to the level of people submitting video?
DH: Sure. You name it. Our members fill out complicated surveys, participate in discussion boards, submit pictures or photos, and chat with executives. They might go into a brainstorming area, fill out a diary, do whiteboarding or collaging, create a photo album, or a video of their family. Or we might say to them, "Go shopping and send us your register tapes because we want to know what you're buying."
It's unbelievable what people will do if they think you're listening. The people who are in our communities know that these brands are listening and that they have a voice. They do it for high-involvement products like airlines and hotels, but they'll also do it for toothpaste if you create what we call "the social glue".
I agree. It sounds fascinating. You and I recently reconnected because I came to a Tweet-up at your Communispace offices in Watertown. What does Twitter mean to a company like Communispace?
DH: I just wrote an article for Forbes about my Twitter experiment. I originally just went on Twitter out of curiosity and also because clients were asking me about it and I wanted to be able to help them. You know, I've gone through a whole bunch of phases with it. I originally thought what everybody else thinks in the beginning: this is just a total waste of my time, what am I doing? I'm talking to myself.
I made a commitment to go for it for six months and see what I could do. I'm a curious person. The first hook for me with Twitter was that it was not about having everybody listen to what I had to say, it was a way for me to learn what other people thought. If you're curious about the world and how people think and what makes them laugh, and what frustrates them, it's very interesting to see that slice on Twitter. Now that I've gotten organized and I have a lot of followers, I do find that it's more of a community for me. When I say things now, lots of people write back.
Now they know you're a big honcho.
DH: Well, now it's a place where I can test ideas, where I can get the word out about things, where I can build relationships, and where I can rekindle old relationships. I found that Twitter is just like anything else. Sometimes it's a leap of faith. If there are so many people out there that are making a big deal, there's got to be a there, there, right?
That's my feeling about it too.
DH: It's literally a matter of saying, "I'm not going about this to prove that it's worthless." I want to learn what the magic is. I decided that I would spend at least a half hour a day for six months. And if I didn't get it by then, I was just too old. Now I find that it's got all kinds of value. So I think it's great. I just told The Boston Globe that Twitter is like a big cocktail party, but that I don't have to wear high heels (laughter).
I'm also on Facebook. It's like having a yearbook of my life, but I don't see it as this vital tool in my life. I don't go on every day or spend a lot of time adding content to it. However, whereas I've "dabbled" with Facebook, it's completely different for my daughters. Facebook is their entire world. It's their preferred email. It's how they plan parties. It's where they put pictures of their lives. It's the first place they go in the morning, and the last place they go at night. I don't have that experience.
Sometimes new things are about suspending disbelief and jumping into the pool to see if you can figure out where all the fun is. I'm starting to get that from Twitter. Having said that, I'm excited about what the next new tool will be.
Which must be close, don't you think?
DH: You would think so, wouldn't you? I think when wireless connectivity becomes easy to access everywhere, that's when innovation will explode. The world is changing so fast. I always say to clients, aren't you glad you have a community? If you did a big study of consumer behavior and preferences last fall, throw it out. There is absolutely nothing about what you learned from consumers last fall that you could probably take to the bank right now, because the world has changed.
The news is flying so fast. Are you following BreakingNews on Twitter?
I am not.
DH: Oh my gosh. Follow it. I am now first to know about every war, every earthquake, every airplane problem.
It's enough that I just get my Google News. Mark Hurst's theory about the digital world is to determine the amount of information you can handle. I already know that Breaking News on Twitter would overwhelm me. You're operating at a higher level than I am. [Laughter]
DH: There is a stage of Twitter use that I call "I am powerful." Part of the seduction of getting your news on Twitter is that your reaction to other news outlets, like watching CNN, becomes, "Thank you very much for telling me that Natasha Richardson fell in a skiing accident, but frankly, I knew about that four hours ago, because I am on Twitter and I am powerful!"
"And thank you for sharing the Mumbai story with me, but I've actually read all the postings of somebody who was actually hiding in the hotel, and I am powerful." Or, "I know that you had a really hard time getting the Comcast guy to come to your house, but I went on Twitter and I got him to come within 24 hours. You know why? Because I'm on Twitter, and I get it, and I'm powerful."
It's not just an ego thing. I was flying with a friend on Jet Blue Airlines about two weeks ago. He called me in a total panic after I arrived home. He had left his Blackberry on the plane and could not get a live person on Jet Blue's website.
On our plane ride he'd just been telling me how much time I was wasting on Twitter. I said, "Let me just see if I can find Jet Blue on Twitter." I go on Twitter and say, "Jet Blue, can you help? Is there any way you can connect me with a real person?" Fifteen seconds later there's a guy saying, "Hey, last time I checked, lots of us were live people." I went back privately and said, "Can you call me? Here's the number." Within five minutes, they had his Blackberry. And guess what? I was powerful. He was completely incapable of getting his Blackberry because he wasn't powerful.
We all have those moments as we're using new technologies. Look at all the people on the iPhones, showing off all their new stuff. I don't have one, but it's obvious that they feel powerful. Our biggest recruiting source at Communispace is existing employees. About 60 percent of our new employees come from employee referrals. Our second biggest source is Craigslist. It's such a powerful tool. We're so proud that we know how to use Craigslist for recruiting.
I'm not an evangelist for any of these products. But most of our clients are marketers. And their world has been completely transformed by what's possible in our communities. It's better, faster, cheaper. It's a great use of the Internet to be able to have continuous connection to customers, so that you can get their input and insight whenever you need it. If we are doing great work, our clients say, "I have Communispace, and I'm powerful!"
So many things are possible. Some of it is your mindset. There's probably a personality type that's attracted to this. Are you a skeptic? Do you jump on every new thing? I'm sure somebody has done some personality typing.
You're going to have to look that up.
DH: Right. Maybe I'll find out on Twitter because I'm so powerful. [Laughter]
Thanks for your time, Diane. I'm sorry we didn't get to talk about the Red Sox.
DH: My favorite subject! Next time—along with more dirt about Tom Peters wearing makeup. My pleasure, Erik.
Email: dhessan (at) – communispace (dot) com