What will it take for brands to build digital communities?
A university study details how digital communities can support more personal and less transactional relationships with consumers, but also carry inherent challenges and risks.
Establishing flagship platforms, according to researchers at University of Cologne, often involves two processes:
Consumer crowdsourcing: Consumers draw value from platform participants such as the brand, other consumers or third-party businesses.
Consumer crowdsending: Consumers provide value to platform participants.
Consumer interactions were grouped by the researchers into five platform building blocks: transaction, community, benchmarking, guidance and inspiration. For example, Nike’s Run Club addresses the overarching consumer goal of living an active, healthy lifestyle by offering exclusive products (transaction block), sports events (community block), tracking and competitive features (benchmarking block), and personal coaching (guidance block).
Brands can then tailor the degree of consumer involvement through three different states:
Capitalizing relationships: Involves intense crowdsourcing focusing on the guidance block and integrating a variety of third-party sources, such as the way Nike recruits coaches and nutritionists to guide consumers’ active and healthy lifestyle goals.
Catalyzing relationships: Involves intense crowdsending playing up community and inspiration blocks and involving deep integration of consumers into the value creation process, such as Lego.com.
Nurturing partnerships: Involves intense crowdsourcing and crowdsending as the platform “becomes a co-creator of a consumer’s identity as much as the consumer co-creates the platform offering.”
University of Cologne professor Julian Wichmann explains, “The more frequently and more intimately that consumers interact with the platform, the more intensely they crowdsource and crowdsend and the more the relationship transforms from purely transaction-focused to highly self-relevant, committed and durable.”
Risks in developing such platforms include “the dilution of the core brand due to the inclusion of third parties, platform hijacking through consumers and high operational costs.”
For managers, flagship platforms shift the market focus from products to entire category spaces. They also require measurements that extend beyond brand performance to interaction quality, and demand new resources and skills that enable the ongoing orchestration of interactions and relationships.
Werner Reinartz, also at University of Cologne, said, “Companies will need to decide whether they want to stick to the traditional pipeline model, complement other platforms, or embrace the opportunities and challenges of operating their own brand flagship platform.”
DISCUSSION QUESTIONS: Is creating a digital community a practical or far-fetched goal for most brands? Does the study appear to sufficiently assess the upsides and downsides?