2. 10 Community chapter McGraw-Hill/Irwin
© 2004 The McGraw-Hill Companies, Inc., All Rights Reserved.

3. Community — Today’s Objectives
Objectives will be to:
Develop a clear definition of community
Discuss 10 criteria for assessing a successful community
Explore how communities function and create value
Discuss the benefits of commercial communities
Examine the ways in which effective communities can be created

4. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

5. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

6. Exhibit 10.1: Community Criteria
People Criteria
Process Criteria
Culture Criteria
Technology Criteria
Membership is a conscious choice
Member base has achieved critical mass and sustainability
Members feel a great sense of trust
Members achieve benefits of scale
Roles are not hierarchical or imposed
Effective facilitation and site structure keeps activities on track
A spirit of participation and feedback is clearly cultivated
A sense of affiliation is achieved through ownership of equity in the community
Efficiency in interaction is maximized
The community is easily navigable
Community is a set of interwoven relationships, built upon shared interests, that satisfies individual needs that would otherwise be unattainable.

7. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

8. Exhibit 10.2: How the 2Is Affect Online Community
Individualization
Interactivity
Less accountability — punishing an individual’s inappropriate behavior becomes more difficult on the Internet
More anonymity — user identity can be easily disguised by logging on with aliases
Convenience — communication and resource sharing can take place anytime
Reach — elimination of geographical boundaries allows for the creation of both large and effective communities
Community

9. How Communities Function

10. Exhibit 10.3: The Foundation of Community

11. Open vs. Closed Communities
Open Communities
Closed Communities
Membership policy:
Open to all regardless of individual profile
Used typically for:
Communities based on a more general and highly accessible topic of interest
Examples:
Yahoo.com
Talk.com
Launchcast.com
Membership policy:
Outsiders generally not allowed inside community
Members must fit specific qualifications
Used typically for:
Extranets or intranets between well-known parties and sources, dealing with highly specific and / or sensitive data exchange
Examples:
Corporate intranets or extranets (e.g., Ford Motor Company and its suppliers)
Physicians Online

12. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

13. Exhibit 10.4: Transfer of Value Triangle
User to Administrator:
Examples of Types of Value Created and Shared
Community subscription fees
Content fees
Fees to engage in an activity (e.g., online video game participation)
Commission fees (e.g., for goods sold through the community)
Increased value for selling online advertising space
User to User:
Examples of Types of Value Created and Shared
User-generated content (e.g., information/opinions/advice)
Distribution of digitizeable goods (e.g., MP3s, shareware)
Transactions for goods
Relationships/support/conversation
Transfer of Value in Communities
Administrator to User:
Examples of Types of Value Created and Shared
Administrator-generated content/proprietary content (e.g., articles/editorials)
Mailing lists
Newsletters
Webcasts (e.g., of guest speakers)
Supervised chats (e.g., chats featuring guest Q&A)
Offline events (e.g., parties for members within geographic proximity)
Rewards points (e.g., to use on goods or services traded within the community)

14. The Creation and Transfer of Value Outside of Communities
Community Benefits to Parent Firms

15. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

16. The Membership Life Cycle

17. Exhibit 10.6: Intensity Patterns During the Four Relationship Stages
Exploration/
Expansion
Awareness
Commitment
Dissolution
Level of Intensity
Time

18. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

19. Exhibit 10.7: The Community Applicability Model
Consumer Attributes
Product Attributes
Community
Pursue
Creation
Consumer attributes are behavioral
Is the target group of your product or service made up of active online users?
Are members of your target group likely or willing to share information with others?
Are members of your target group involved in the process of discovery?
Do members of your target group value interaction with like-minded people?
Can the community grow organically?
Product attributes are emotional
Can the product generate critical mass?
Does the product elicit passion?
Does the product address or revolve around a certain lifestyle?
Do benefits of information aggregation arise from product complexity?

20. Exhibit 10.9: The Three Levels of Community

21. Exhibit 10.10: Community Building Strategy

22. Exhibit 10.11: The Community Growth Path

23. Exhibit 10.12: Community Levers
Four Key Stages of Customer Relationships
Awareness
Exploration /
Expansion
Commitment
Dissolution
Outline community benefits clearly and early on in the process
Anticipate and readily answer questions and concerns, quickly establishing a sense of trust
Establish a call for action and further exploration
Makes community exploration easy through efficient site structure
Show everyone individual attention (e.g., welcoming s, guides for novices, chat conversations for new members, use of CRM marketing to tailor site functionality)
Begin the process of equity creation (e.g., member points and loyalty programs)
Increase equity building (e.g., through tiered loyalty programs, increased rewards)
Recognize individuals’ contribution and participation
Develop members (e.g., through leadership opportunities, community roles, guides or watch-persons)
Spot departing friends early and find solutions to prevent dissolution
Make the “leaving process” fair and efficient
Seek and listen closely to feedback
Allow the option of returning

24. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

25. Exhibit 10.13: EBay’s Community

26. Exhibit 10.14: The Power of EBay’s Network Effect
Monthly Unique Visitors
(in thousands)

27. Chapter 10: Community
Defining Community and Assessing Successful Community
How Community Changes and Functions on the Internet
The Value and Benefits Created by Online Communities
How Members Progress in Their Relationship With a Community
The Ways in Which Effective Communities Can Be Created
EBay Example
Conclusion

28. Community — Conclusion
Real community is accomplished by meeting criteria along four dimensions: people criteria, process criteria, culture criteria and technology criteria
Communities differ by their foundations — shared interests of information, shared interests in activity and shared interests arising out of commonality
Within a community, value is created in three different ways: user-to- user, administrator-to-user and user-to-administrator
Communities can generate significant benefits outside of themselves, such as to a parent firm, through both cost and revenue benefits