The ROI of Loyalty (Part I)

Posted: 4/28/2009 by Norma Watenpaugh

I was approached by a client some weeks ago to present at conference some work we did on Developer Loyalty. Now there are a lot satisfaction type surveys out there, but my client presented a very specific challenge. She was new in the role as the Director of the Developer Community and needed to understand very quickly "Who are the developers?" What do they care about? What is their impact on the business? What investmentswould mostimprove their productivity? and increase their usage of the company's serviceand thus increase ROI to the company?

At theoutset we knew we had a very diverse community, we needed to segment that community and understand what made each segment unique.

Technical Segmentation:

We found an entire spectrum of technical skill: intrepid amateurs to industry experts. We found a corresponding spectrum of commercial influence: one time implementors to serial implementors. This enabled the client to differentiate technical support and documentation for different segments. Targeting the more sophisticated (and costly)benefits to the serial implementors who could best drive repeat business.

Geographic Segmentation:

Where developers were located did not correlate one to one to market penetration of commercial services. For example, not surprising India represented the third largest geography of developers, but the client had almost no commercial business there.

That finding prompted more specific developer marketing to India where there corporate marketing was not reaching a key community. Additionally, akey growth trend was spotted in Australia which became a focal point for new market development.

Vertical Segmentation:

Another actionable learning was in identifying non-traditional vertical market segments that could represent opportunities for growth. Vertical segmentationrevealed a large number of developers in the non-profits sector signaling a growing market for the client services.

Beyond the straight forward segmentation that enabled better targeted benefits delivery, we also segmented by Loyalty Profiles, using the Apostle model. This model provides much deeper insight into behavior and motivations than a Satisfaction Index or the popular Net Promoter Score. More on that in the next blog - Part II!

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