Do Business Well

We considered some of the new business models that are developing online. One of these was the consumer-to-consumer (C2C) model, upon which online communities are based.

These communities have evolved considerably since the early days of news groups and chat rooms. They offer a simple means of overcoming the lack of human contact online and hence can meet consumers’ social activity needs. Consequently, online communities can now represent a significant commercial opportunity. According to Kozinets,

Online social interaction is therefore a unique public—private hybrid never before encountered in human history. Changes in capitalism, social thought and new technologies have imploded the boundaries between home and workplace (and production and consumption). CMC [computer-mediated communication] offers ordinary people access to a mass medium, a stage before a global audience. . . . Opportunities abound not only to broadcast one’s own private information, but also to partake publicly in the private information of others, and also to commoditise and commercialise these relationships.

Cisco (www.cisco.com) is a successful example of a company that has fostered customer communities and saved in excess of $550 million per year in customer support costs by letting customers help themselves to technical support information via Web communities. Seybold (1999) describes how putting the technical support function online led to the creation of a ’self-inflating balloon of knowledge’ as customers competed with each other to answer queries that had been posted by others.

Even in the early days of the Web, Hoffman and Novak noted the extent to which the online community model (based on the communication principle of ‘many to many’) differed from traditional marketing communications (based on the principle of ‘one to many’):

In this mediated model, the primary relationships are not between sender and receiver, but rather with the computer-mediated environment with which they interact. In this new model, information or content is not merely transmitted from a sender to a receiver, but instead, mediated environments are created by participants and then experienced.

There are a number of different types of C2C interaction through online communities emerging. For example, they may be based on:

Purpose (e.g. www.autotrader.co.uk). For example, people with a common interest in purchasing cars can swop information on best buys, problems with particular models, garages providing high levels of customer service, etc.

Position (e.g. www.bhf.org.uk). In this example, for the British Heart Foundation, the common ground is the medical condition, but various stakeholder groups such as patients, families, researchers and care providers can exchange relevant information, perhaps related to new drugs or the existence of support networks.

Interest (e.g. www.thepetchannel.com). Interest-based community sites bring together people with shared hobbies. There is an increasingly diverse range of such interest groups ranging from the predictable to the bizarre to the downright dangerous .. .

Profession (e.g. www.esteel.com). B2B communities such as eSteel bring together a wide range of professionals with a specialist interest in the steel industry.

Criticism (e.g. www.untied.com). Untied is a vigilante site devoted to criticism of the customer service provided by United Airlines. Originally established by one disgruntled passenger, the site developed momentum as others contributed their own horror stories and the company presented a series of textbook examples of how not to handle complaints.

Another interesting example is the community site www.eggfreezone.com, which was set up by the online bank Egg for customers to comment on the services provided by the company. Some customers, however, were persistent in their criticism, and the site was closed. The official reason given by Egg was that the way the site was structured did not allow for individual responses to be made to customer comments. It is easy for a cynic to believe that Egg was trying to protect its reputation here, seeing the comments on the site as a threat rather than an opportunity. What do you think?

Research by Evans et al. (2001) that explored consumer attitudes towards online communities concluded that successful commercial communities must offer:

* quality content;

‘added value’ interactions;

• efficient use of participants’ time;
• simple site design that can be navigated quickly;
• integrated contact channels (meaning that the site cannot stand alone);
• minimal requirements for registering personal details.

The information posted on relevant community sites can provide companies with valuable research data. Most online communities are currently at a relatively early evolutionary stage and have yet to be subjected to serious study.

Possibly related posts: (automatically generated)
Building Online Communities

• Online Relationship Marketing
• Marketing planning stage: implementation through the marketing mix
• Internet Marketing, as the voice of all customer communication, Ecommerce the power of Networking
• Building Online Customer Relationships
• Challenges of building online customer relationships
• Marketing planning stage: evaluation and control of strategy
• Relationship Marketing
• Where to run for help? Email Marketing, Web Hosting Providers
• Building Loyalty Online: an Exploratory Study
• Separation or integration of online operations?

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