Henshaw

In an article written for Marketing Week MaryLou Costa examines the role of social media in building brand communities. Specifically Coasta looks at closed and open communities and how best to use them. This blog will look at key differences between open and closed communities, how to effectively use them and also offer an analysis of Costa’s article.

Closed and Open Communities

Community type is an important consideration when companies consider how best to use social media channels and the communities they access to develop their brands. As mentioned above Costa ultimately breaks online groups into two types: closed and open communities. Closed communities are ones in which members must meet a criteria to join, membership is not open and they are typically incentivized to contribute something beneficial to the group or company. Open communities are just that, open to anyone to join.

The emphasis that online community selection should be driven by strategy is an obvious one for any good marketer. That said Costa takes this analysis a step further by connecting channel selection with objectives, for example:

• Closed communities are best for engagement. Therefore they can also be referred to as “consumer input” communities.
• Open communities, for example Nike’s running community, are best for brand advocacy and opportunities for output by that company that has generated it.  

Using Mass Social Media Channels to reach Open Communities

Of course there are social media channels that offer a potential fast track to a massive audiences – Facebook being perhaps the greatest example. Costa’s analysis offers few insights here, Coke certainly has an advantage, leveraging its brand in the creation of campaigns and using it effectively as an additional communications channel. Another example is used of Philips using LinkedIn as part of the brand’s strategy to be recognized as the thought leader in the health and wellbeing sector. That said, this does not seem particularly insightful, it feels like a very logical application. One possibly powerful tactic to move beyond simply using social media channels as another communications channel and one in which the idea of community is leveraged is that of crowdsourcing. Here Giffgaff is used and explored as an example.

Crowdsourcing

Giffgaff, a new entrant into the United Kingdom mobile market is cited as an example of crowd sourcing, using its own online community to answer the majority of customer queries as they arise, typically in five minutes or less. The savings from this model are then passed on to the consumer. What is not covered in this analysis is that this concept is at the heart of the Giffgaff business model.  The term “giffgaff” is Scottish meaning mutual giving. It was chosen as the brand name to fit with the company’s strategy. Members receive points (which can be converted into cash) for answering questions and for other activties that support the company, including:

• Developing marketing materials and promoting the brand.
• Recruiting new members.

Whether or not this model actually does keep rates low for Giffgaff is beyond the scope of this blog and not covered in Costa’s report. But it does raise an interesting issue; that is whether this type of customer maintained support is sustainable. The benefits would appear to be signifigant, not only could it keep costs low but it gives an online community some of the attributes of a traditional community. There are of course challenges and risks associated with crowd sourcing, again not covered in Costa’s analysis. These would include:

• There are benefits to being in a longer term relationship when working with suppliers – particularly of creative material. Crowdsourcing does not enable long term relationships.
• It could be difficult to complete projects via crowdsourcing.

Closed Communities:

Closed communities are online communities that can allow for the development of powerful insights on brands. Promise Communities facilitates these types of communities and currently runs about 15 live, closed communities for a range of brands, involving more than 10,000 participants. The company describes its operation as a “24-hour stakeholder advisory board”. This “board” can help brands gather insights towards a number of strategies, such as the development of new products, services and marketing activity, as well as exploring consumer attitudes and needs.

Brands use closed communities for a number of reasons:

• conduct co-creation projects towards new products
• strategy development

The most powerful attributes of using closed communities are twofold:

• It can be a cost-effective market research tool, especially if used in the long term and in industries or companies where research is used frequently.
• It can be very timely, which has a number of benefits. Development time is reduced, which can result in quicker access to research. Because research can be gathered more quickly it can be used more frequently to inform decisions.

Costa acknowledges that motivation could be an issue in closed communities – how are particpants incentivized to contribute? It is not clear. Costa also cites challenges with product secrecy but does not delve too deeply into how big of a concern that could actually be. Costa misses other significant issues with these sorts of communities, for example:

• Increased likelihood that a crowdsourced project will fail due to lack of monetary motivation, too few participants, lower quality of work, lack of personal interest in the project, global language barriers, or difficulty managing a large-scale, crowdsourced project.
• Authenticity around why members join. Much like restrictions put on focus group regristrants, if someone seems a chance to contribute as simply monetary their contribution could be misleading.

Implications

Coasta’s point is ultimately a powerful one to consider; simply approaching social media channels as additional communication channels is a mistake. Marketers must align their social media channel selection with their marketing strategy. This specifically holds true for closed communities, which if used properly could offer companies access to online communities.