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Virtual and Real Communities: A Taxonomy of Net Strategies

Llorenç PAGES CASAS <pages@ati.es>
Barcelona Internet Strategies
Spain

Abstract

Improving customer relationships is one of the theoretic benefits that companies hope to reach through their presence on the Internet. But, as surveys show, this is not so easy. This paper is intended to explain some keys to achieve it.

Contents

Introduction

Due to the explosive growth of the Internet, a company's presence on this new communication channel, and specifically on the World Wide Web, is becoming indispensable, at least in terms of prestige. Nevertheless, taking profit from their presence on the Net to improve customer relationships is something that still has to be streamlined for the majority of companies [1].

This will be the object of this work. Obviously, the Internet makes collaborative work with other companies easier and can contribute to one's power reinforcement with regard to providers, but it is in the customer area, through Net services promotion, where there is surely more room for improvement.

The Internet opens up great business opportunities, out of which emerges the construction and promotion of "virtual communities" based on people's shared interests [2]. However, each new Web site comes onto the Net to compete with thousands of others of similar appearance and the same goal of attracting surfers' attention.

This paper is intended to place itself at a distance from the myth of technology. The virtual world should be analyzed in terms of our experience in the real world. Of course, new technological improvements affect people's lives, but in the long term the human being is the one, through his or her attitudes and interests, who adapts technology to his or her needs, not inversely. In this way, though technology would make a full interconnected world possible where each citizen could have the same influence on discussions and communal decisions, this is not the scenario that sociologists of the information age forecast:

Thus, the multimedia world will be populated by two essentially distinct populations: the interacting and the interacted, meaning those who are able to select their multidirectional circuits of information, and those who are provided with a restricted number of prepackaged choices [3].

Therefore, we are aiming to establish an analogy in terms of uses and attitudes of people in the virtual and real worlds. We will use the ways people communicate as the basis for our analysis which is intended to improve our perception of how to focus businesses on the Net.

Naturally, we will take into account that individuals can be passive or active subjects of communication. And, for example, in the former case, we could use the term community in its broadest sense (as it is throughout the paper) to say that they constitute communities of readers or spectators, or, more generally, audiences.

Virtual and real communities: an analogy

As we introduced above, we intend to show how the kind and purposes of people's communication in the virtual and real worlds would match. This analogy will give us an interesting point of view from which to analyze the differences between both worlds in terms of communities' formation and evolution and, in the next sections, to systematize the study of introductory strategies for getting onto the Net, especially for companies already present in the real world.

We should clarify that the comparative table below shouldn't be interpreted as an exhaustive attempt to establish a parallelism between virtual and real communities because the only parameter considered is the "interaction type" among the members of the community.

At the first approach, we should consider three interaction levels:

(Almost) Unidirectional interaction:
The flow of merchandise or information goes in a single direction. The receiver is limited to choosing in a simple way (typically, in the virtual case, through mouse clicks) and to rewarding the product, through money or simply attention.
Multiple bidirectional interactions:
The transmitter personalizes the flow, attending to the needs of each one of his or her customers. Therefore, these customers must be able to define and declare their wishes and needs. In our terminology, the action of the transmitter, thanks to this personalization, becomes a "service."
Multidirectional interactions:
Many transmitters produce flows affecting many receivers. Usually, there is among the members of the community the quality of authority, director, or promoter that prioritizes the flows produced by this kind of people.

This is intended to be a complete classification, but we will split it in order to obtain a finer categorization:

Especially for the virtual world case, with regard to the unidirectional level, we focus on the flow type. As is the obtained product "information" -- understood as everything that is able to be digitalized (data, music, software...) -- interaction can be limited to the virtual world. As is the product "merchandise," virtual interaction must be completed in the real world, leading to the need for a complete identification of the customer.

On the other hand, multidirectional interactions can have a very variable intensity, with regard to the type of community. But even for the same community type, the time attribute is very important. So, we are going to differentiate the case where the relationship among the members of the community is basically produced in very spaced-out periods of time.

Comparative table of real and virtual communities

Audience
Broadcasting presents a substantial difference on the Internet: the capability of measuring the audience rates of each segment of accessible information in the highest detail. The consequence is not only the ability to improve the information itself continuously but also the opportunity to upgrade the category of the community's interaction.

Thus, the detailed measuring of the audience's common interests presents the possibility of designing commercially attractive products (for example, music CDs) or configuring new services geared to demand (like the automatic delivery to the users of their most commonly accessed type of information).
An especially interesting idea that has provided great success to several sites is the publication of the audience rates on the site itself. For instance, on StockMaster's site [4], dedicated to providing stock market information, the section that informs on the most frequently requested stocks has obtained great success.

Of course, the idea that users are interested in the behavior of others suggests a clear opportunity of putting them into contact. In this way, StockMaster has recently opened a section named "Discussion Forums."

Clientele
In both the real and virtual cases, it is necessary to provide consumers with an efficient and easy access to the relevant information in order to help first their suitable election and then their appropriate use of the product. But, it's again in the feedback information where we find the abilities to upgrade the virtual community to a higher level of interaction.

In effect, the feasibility of recording and processing each individual user's purchase and the need to identify him or her make their "mouse clicks" very useful information in order to offer him or her later personalized services. For instance, the Recommendation Center of the Amazon's virtual bookstore [5] gives its customers "Instant Recommendations" based on their past purchases.

By the way, this Recommendation Center shows an exuberant imagination in its attempt to improve the loyalty of Amazon's users based on the upgrading of their level of interaction (towards "personalized services" or even "shared interest groups"). That's on a site which supposedly has its main source of profits in electronic sales.

Personalized services
At this level, the distances between the real and virtual world begin to increase. Thus, while nowadays we cannot imagine primary health attention not based on the human presence, neither can we think of big recovery information services not based on an electronic interface.

An interesting option on the Net is the service at home of news and information changes, be they instantaneous (push) or deferred (mail lists), based on a previous user's election.

And again this idea suggests the opportunity of attempting to upgrade its provided level of interaction. Should the users accept the reception of nondemanded information from one source (the site's promoter), why would they not accept nonrequested opinions from the people interested in the same domains with the additional and very important attractiveness of communicating one's own thoughts and influencing the others?

Occasional group
While in the real world it is completely natural to make occasional meeting places possible (as in the case of INET'98) in order to avoid the spatial and time distances that limit the interaction capabilities, the virtual world makes these distances disappear. In a virtual meeting place the only time limitation is that belonging to the object of the meeting itself.

Thus, while INET'98 will extinguish itself for time reasons probably to give way to INET'99, the truly occasional virtual communities will tend towards their definitive extinction while those that have an object of intense relationship will become "shared interest groups."

Shared interest group
The motivations to belong to the communities of daily interaction can be transferred with success to the virtual world: emotional, transactional, recreational, etc.

We should observe that in the real world a lot of people belong to communities in which they interact very little except when they have a concrete reason to access them (for instance, professional or consumer organization). Actually, these kinds of shared interest organizations have the risk of becoming mere lenders of services or the motive for occasional social meetings.

Something like that happens on the Internet. We usually bookmark a lot of addresses simply to attend to specific needs that we could have at any indeterminate time. That includes even sites containing forums about subjects of our interest.

The problem on the Net is that due to the facility of placing new sites and the disappearance of distances, the exclusivity rights expire soon and those organizations which resign themselves to a low level of interaction with their members risk losing definitely their attention. Therefore, only an intense and permanent interaction can guarantee the subsistence of this category of virtual community.

Strategies on the Net: a taxonomy

Many new companies have accessed the Net and converted it into their source of business. We have already quoted some of them, such as StockMaster or Amazon. Others like Cybermom [6] (a site for American moms) focus not on the people's need of carrying out transactions, but that of sharing emotions.

On the other side, the preexistent companies or organizations that decide to get onto the Net have a very valuable asset to take care of, which is their customers or users and the loyalty degree already obtained.

We will consider the interaction level as a fundamental classification factor. So, our basic parameters of analysis will be the interaction category with regard to the targeted virtual community and the interaction category with regard to the addressed real community of customers or users.

The next figure is a from/to table which shows the different possibilities of getting a virtual community started from a determinate real community. We shall introduce the idea that the higher the level of interaction in the community, the better the level of relationship or identification among its members and the community's promoter. That is a question of human psychology.

Feasible strategies of introduction onto the Net

New business area
A new category of real community named "latent" has been included in the figure; that is, the appearance of new successful businesses on the Net is based on targeting common interests or the needs of people who have not yet been brought together in the real world. The Cybermom case is a clear example of that.
Natural relationship area
Every company in the market place or organization giving service to a community has a brand, identity marks, and prestige earned during its life. Its customers or users have been linked with it for months or years.

When relationship possibilities are extended through access to the Net, we can suppose that, in the general case, members of the real community will expect a similar kind of relationship in this "new" environment.

Also, at the beginning, the organization which promotes the Net service probably would only be prepared for a similar external level of interaction.

Area of support to the natural relationship
Making the decision to use a site on the Net in order simply to support the real-world organization's activities is one possibility. And this is the same kind of decision as products' promotion in the classic media.

Naturally, new feasibilities are added, as, for instance, in a professional organization with a lot of interaction among its members, the supply of a personalized information search service, or the planning of occasional debates on the Net.

Area of relationship's improvement
In the previous section, we have emphasized the opportunities that the presence on the Net provides for a transition from low levels of interaction to higher ones. Getting onto the Net at a higher level of interaction with customers or users will contribute to improving the relationship with them, to getting their loyalty, and definitively to increasing the organization's value.

Getting onto the Net: a proposal for a method

In the introduction section, we have put forth the need to be cautious with results of new technologies. Now, we want to mention Forrester Research Inc.'s work and its Technographics Service[7] dedicated to the quantitative and qualitative analysis of people's attitudes towards technology.

They surveyed 125,000 North American consumers and segmented the answers, obtaining 10 user categories. About half of the users turned out to be "Technology optimists" and the other half "Technology pessimists." Inside the Technology Optimists group, depending on their category, their interaction expectations were also very diverse.

So, appearance on the Net opens great opportunities but also presents real risks of being misled. This means that a tuned cost/profit analysis for a Net service project becomes very difficult and trial-and-error stages are necessary.

What follows is a lifecycle that focuses on solving these difficulties.

Stage 1: Initiation
Through this stage, save exceptions, we should get onto the Net in the natural relationship area or else in the area of relationship support.

This doesn't mean avoiding ambitious projects but taking profit of the launching phase to test users' community with a view to the next stage design. We are not talking about surveys. The best survey on a Web site is observing what surfers are doing. We are referring to, it can be said, planting "seeds" in relationship improvement direction and seeing how much they can grow.

For instance, a good seed for Amazon could have been, before making the main investments in the Recommendation Center, adding to a first Web site's version a few personalized recommendation options and checking its users' acceptance. The virtual world opens new interaction possibilities that are necessary to imagine and invent but also to test.

Naturally, the contents generated in this first stage must be attractive enough to invite users to a next visit. So, basing the contents on the company's history and photos of its managers is not a good idea.

Stage 2: Relationship improvement
Once a good seed is planted and the appropriate feedback obtained, it would be possible to get into the relationship improvement area. A more precise cost/profit analysis can be attained.

Nowadays, the idea of converting home pages into menu lists seems obsolete and Web designers model them as access tunnels guiding the surfers to the main options. That is one of the reasons for associating a change in the site's focus with the redesign of its main motives and metaphors.

As this lifecycle can be recursive until finding the best way, this stage could become the "Initiation" stage of a new phase in the site's evolution.

Stage 3: Maintenance and consolidation
Once the site is successful in relationship improvement, maintaining the site alive becomes essential, and cost analysis must take this into account. Even when reaching the multidirectional category of interaction and thus assuming the fact that part of the site's contents will be provided by the community itself, contents supplied by its promoter are equally important. Should the members perceive that after migrating their debate to, for instance, a chat room, they are going to obtain the same results, they will do it.

There is also another question to focus on. As time goes by, people change and so certain "Technology pessimists" or "interacted" belonging to our real community will change their minds and be potential customers of our site. Maintaining the primary options which have been useful for community's integration and guiding new visitors to them can be a good idea to enable the engagement of new members.

A practical case

The lifecycle we have described is not a theoretic invention; many Web site's histories can be described through it. That's the case of Gallina Blanca and its Avecrem site [8] of whose evolution we are going to tell.

Gallina Blanca is a Spanish company focused on the production and commercialization of prepared food products (soup, rice, vegetables, etc.). Avecrem is one of their line of products.

A year ago, they decided to create a Web site for promoting their products based firstly on providing cooking recipes. For example, the section "What could I make today?" gave, and still gives, recipes using the ingredients the person says, in a very easy way, he or she has.

They have decided also to include an additional section designed as a question/answer service about cooking subjects. Very soon, this section became especially active and they had periodically to answer quite a lot of questions.

Several weeks after, they observed that some users were themselves able to answer some questions. Then the promoters delayed their answers and this trend increased. So, they decided that the multidirectional seed had taken root.

Three months after their first version launching, they redesigned the Web site, creating two additional sections named "Share your best ideas" and "What are you in the mood for?" focused on dialogue about cooking subjects. The number of visits to the site grew continuously. They observed that obviously, the frequency of users' participation was not very high as cooking subjects are not a motive of daily interaction.

As they wanted to attract new people to the site, they got into a third phase and recently launched a cybersoap on the site accompanied with several debate sections about it. So far, they have obtained again a great success.

Even now, their interaction object has a time limit. So, during the cybersoap broadcast they will have to think about how to take profit from this new interaction inertia in order to advance a little more in the loyalty of their community members and, if possible, to move nearer to the "shared interest group" category.

Summary and conclusions

In the first sections, we established a comparison between real and virtual worlds in terms of interaction possibilities. The initial idea is that people's uses and attitudes cannot be very dissimilar in both cases.

Analyzing the diverse interaction categories, we observed that the virtual world tends to open up new opportunities for a closer interaction.

We classified the strategies for getting onto the Net in function of two parameters: the addressed real community and the targeted virtual community.

Through the first stage of our proposed lifecycle, we suggested starting a not-too-ambitious virtual relationship with customers or users and, at the same time, testing new interaction possibilities of adequately targeting relationship improvement.

This paper is intended to clarify possible strategies for the introduction of companies onto the Net. The enrichment of our strategies table by referencing success cases can help us to avoid duplicated work and to concentrate on new forms of innovation.

At this moment, we perceive the opportunity to segment our strategies table by adding a second line of parameters.

For the real community, the user category related to their attitudes towards technology can be added and works like Forrester's can be a great help to us. For the virtual community, we have the type of products or services already tested successfully on the Net.

The final purpose is not to be able to copy already existing solutions, but to support our idea that the best way to innovate is to have a clear idea of what has already been invented.

References

  1. Information Strategy Online, "Net Gains in the Market Place," http://www.info-strategy.com/internet100
  2. John Hagel III, Arthur G. Armstrong, "Net.gain, expanding markets through virtual communities," Harvard Business School Press, 1997
  3. Manuel Castells, "The Information Age: Economy, Society and Culture," Volume I, page 371, Blackwell Publishers Inc., Cambridge, Massachusetts, 1996
  4. StockMaster, "Web Financial Services since 1993,"
    http://www.stockmaster.com
  5. Amazon.com, "Earth's biggest bookstore,"
    http://www.amazon.com
  6. The Cybermom Dot Com, "A Home on the Net for Moms with Modems,"
    http://www.thecybermom.com
  7. Forrester Research Inc., "Technographics Explained,"
    http://www.forrester.com/tgfx_ex.htm
  8. Avecrem.Com,
    http://www.avecrem.com

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