Transcript Online Communities and Consumer Behavior

Online Communities and
Consumer Behavior*
Min Ding
Pennsylvania State University
* This lecture is based on POIM, chapter 10.
Topics
 WineAccess.com
 Community
goes online
 Fundamentals of online community
 Launching online communities
 Four cycles/components in virtual
community
Why Online Community?
 Are
we destined to replicate our offline
life format (community) online?
Community Goes Online
 The
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arguments for:
New technologies allow new forms of communication
between close friends, acquaintances, and strangers
Online communities provide a focus for social
interaction
New technologies improve communication between
co-workers, customers and suppliers
Online communities enable consumer-to-consumer
interaction
Marketers can use community-building technologies to
generate customer loyalty, involvement, and repeat
sales
Community Goes Online
 The arguments against:
 Private time online comes at the expense of
physical interaction with friends and family
 Weak ties between strangers replace strong
ties between friends and neighbors
 Those who spend hours online often test
higher on psychological measures of
loneliness and depression
Defining Online Community
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Online communities combine 4 important
features
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Communication is multidirectional
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Internet communication tools
Rules that define community membership
Collaborative production of material by members
Repeat use by members
Users provide material
Users consume information
Challenges faced by community builders
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Building traffic
Maintaining member collaboration
Member retention
Personal and Extended
Communities
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Personal communities
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Are small in scale
Members know each other
Communication is direct between individuals
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E-mail
A shared Web site
Extended communities
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Larger in scale and scope
Composed of many smaller areas that allow personal
communities to flourish
Rely on a mixture of content and communication
tools
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Web content publishing
Centrally-managed discussions
Fundamentals of Online
Community
 Online
tools
 Rules
 Collaboration
 Repeat
use
Online Tools
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Communication tools are the heart of online community
 Two categories of tools, based on the type and scale of
communication possible
 Communication rings send messages directly between
users
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Everybody in the ring gets the message
Communication rings don’t scale – they break down as the
group gets too big
Content trees are indirect
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They use a central gathering point such as a bulletin board or
a Web site to collect and store information
Depend on hierarchies that create manageable discussions
Community members go to topic areas and discussion groups
that match their interests
Online Tools
Communication Rings: E-mail
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A shared e-mail list among friends, the
simplest form of online community
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The rule for membership is friendship
Collaboration is at the heart of shared messages
Message archives become the storehouse of
community interaction
E-mail networks demonstrate the structure of a
communication ring
Online Tools
Communication Rings: Internet Pagers
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Best for unstructured, quick communication
 How it works
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Like text-based telephone
An individual has a unique number that can be called
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Allows impromptu direct chats between users
 Allows one-to-one and one-to-many
communication
 Uses:
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Brainstorming
Sharing thoughts & ideas
Surfing the Web together
Online Tools
Communication Rings: Groupware
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Enables joint creation of community content
 Many tools are productivity oriented
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Shared whiteboards
Enable file sharing
Communication Rings: Games and Simulations
• The shared experience of a game or simulation
stimulates communication
• Immediacy turns an online game into a
communication ring
Online Tools
Content Trees
Usenet
Bulletin boards
Chat rooms
Web sites
Rules
Strong and Weak Membership Rules
 Strong
communities have strong rules
 Membership
depends on passing through a
difficult hurdle that creates shared values
and experiences
 Interests and opinions are strongly held
 Weak
communities are easy to join
 Examples
are fan clubs, shopping club
members, frequent flyer programs
 Weak community ties are a serious problem
for online marketers
Rules
Escalating Membership Rules
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Easily attained membership enables a
community to grow rapidly, but ties are weak
 Costly membership breeds stronger ties but
creates a wall around community
 Escalating membership: the practical answer
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Attract new members with easy-to-attain
membership
Full benefits are only attainable through higher
levels of commitment
Collaboration
Member Content Has Desirable Features
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Low cost:
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Current:
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Member content reflects current interests
Active members keep their material current and
interesting
Creative:
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Member-contributed material is cheap
Results in extensive content areas
While quality varies, thousands of users contribute
creative content and unique points of view
Credible:
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The opinions of community members’ with credentials
and expertise are trusted sources of information
Collaboration
Observations About Member Content
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Heavy users will contribute most of the
content
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Most members will lurk – read content posted by
others
Small groups tend to produce more active
members
 However, since not everyone in a group will
contribute, large groups may be needed to
generate a sufficiently large body of
interesting and compelling content
Collaboration
Online Tools Expand Discussion Networks
 In
1985, the average American had 3
people with whom he felt comfortable
discussion important matters
 Participation in online communities has
changed this
 Anonymity
can encourage people to share
personal concerns with strangers
 People don’t have to worry with what their
friends might think about their situations
Repeat Use
Figure 10.8
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Companies that sponsor online
communities on their Web sites
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Learn more about the tastes and
wants of their members
May receive useful feedback and
suggestions from users
Which, in turn, enables better
service and product definition
This defines a community of
users
The challenge for marketers is
to build increasing levels of
commitment among users
Launching Online
Communities
 Building
hybrid communities
 Mirror existing community benefits
 Emphasize growth first
Building Hybrid Communities
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Successful commercial communities merge sponsor
and member content
This can be risky for 3 reasons
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Difficult to balance content quality and member freedom: what
if members post junk?
Discussions and information posted online may hurt the
reputation and brand of the sponsoring organization
Member content may involve the sponsor in legal problems
No control results in off-topic messages, spam, and
repetitious postings
 Too much control results in stifling member content and
material that has been “sanitized” by the sponsor
 “Offensive” or damaging postings must be responded
to quickly
Building Hybrid Communities
POIM, Table 10.3
Example of Online
Community
Most Usenet forums, most
general-purpose online chat
Control of Member Content
No Control – No member has
privileged control over postings
Commercial Issues
High quality risk – Many
incomplete postings, off-topic
spam and mistakes, low-quality
forums lacking focus
Legal Issues
Low legal risk – Community
becomes a carrier of information
Physician’s Online
Authentication – Qualifications
Difficult to find a method of
for membership are verified, but authenticating that doesn’t
not content
create a high barrier to new
members
Depends of authentication
quality; biggest problem areas
involve material not suitable for
minors
SeniorNet
Passive Moderator – Spamming,
profanity, inappropriate content
removed as noticed
Volunteer moderators help
create better focus to topics
and assist new members
Creates an expectation of
control and possible exposure to
liability problems
Active Moderator – All content
read for appropriateness and
manually posted
Static content, expensive, builds
a consistent brand and theme
Exposure to charges of
manipulation, and high
expectations for issues such as
liability
AMSO.com
Mirror Existing Community
Benefits
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Online business communities flourish
because they mirror and extend the benefits
of physical communities
 Three types of business-to-business
communities stand out
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Virtual trade shows
Professional forums
Supply chain networks
Emphasize Growth First
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To summarize the concept of increasing
returns: “Success breeds success”
 Increasing returns result when it’s easier to
grow the bigger you already are
 Increasing returns creates
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Successful online communities leverage the
effects of four virtuous (positive feedback)
cycles in order to grow further
Four Increasing Returns Cycles
with Virtual Communities
Figure 10.15
Content
Attractiveness
Promote memberto-member
interaction
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Generate memberbased content
Draw more
members to
community
Build member
loyalty to
community
Member
Loyalty
Online Community
Increasing Returns
Member
Profiles
Target
products
and offerings 
Transaction
Offerings
Draw vendors and
user spending to
community
Community Metrics
Each of the Community Loops Suggests Ways of
Measuring the Community’s Strength
Summary
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Fundamentals of online community
 Online communities categories
 What are the four cycles/components in
virtual community.
Sample Final Question:
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Explain to me ( a recruiter who are interested in
building an online community) the relationships of
the four cycles in virtual community.