Why Online Communities Matter

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What percentage of the knowledge you need to do your job is stored in your own mind?
Robert Kelly of Carnegie Mellon University has been asking this question for several decades. The results should startle you. If they don’t startle you, they should provoke you into thinking about the consequences and, what we can do about them.
In 1986 the answer was 75%. By 1997 the answer had slide to less than 20%. I haven’t seen any more recent results but can guess the direction they are going.
What is going on? The rate of change and increase in complexity are happening too fast for us to keep up. To cope, let along thrive, we increasingly need to trust and depend on others.
This was for employees talking about the job they are paid to do. What about customers trying to deal with all the things that change in their lifes?
How will we deal with this challenge? A leading candidate is Social Networks that develop into communities of interest, ones that authentically foster participation, contribution and co-operation.

6 COMMENTS

  1. John

    As you point out, life around is getting more complex. But we have evolved a neat solution to avoid cognitive overload. We selectively ignore and forget new information that do not appear relevant to us or that conflicts with our established experience. Fortunately, we have computers to provide us with the ‘lost information’ required to do our jobs when we need it. The Federal Reserve in an earlier report attributed the majority of growth in labour productivity after 1995 to the effective use of IT. They also predicted that this effect would continue in a sustainable way into the future.

    It will be interesting to see if Communities of Interest and of Practice, can collectively expand individuals’ available knowledge in new ways that IT currently doesn’t.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. Graham,

    The problem with the neat solution of ignoring information that doesn’t seem relevant is that it leads to closed-mindedness. This becomes compounded when the underlying psycho-logic of an individual no longer leads to a reasonable sense of predictability and control. The result, stress and anxiety, the alarm clock in you head that tells you that things are not operating as you expect.

    The natural order of the psychological system is to reconstruct itself to more appropriately handle changing conditions. By reducing the uncertainty that comes with complexity an individual can regain a sense of predictability and control over the external world. We know this feels good and is the foundation of good mental health.

    Anxiety related conditions now account for the underlying reason for the top three prescription drugs in the USA. Aggravation is up and reaches almost all segments of society. This impacts an individual’s health and quality of life. It also impacts business, especially those who are dependent on open-mindedness to get someone to adopt something other than a commodity. If we don’t seek solutions to adapt to changing conditions — well…

    I am now working with several companies to design engaging online communities that help customers adapt to changing challenges and to learn how to extract greater value from products that play into the solutions. By supporting the communities and providing resource, I believe these companies will gain relationship value; they will become resources customers don’t want to be without.

    John

    John I. Todor, Ph.D.
    Author of Addicted Customers: How to Get Them Hooked on Your Company.

  3. John

    The coping vs. adapting analogy that you describe so well is widely seen in society in general. One only has to look back to large societal changes, such as the introduction of the Euro in Germany in 2002, or the change to the SI metric system in the UK in 1973, to see first hand how some people coped with the changes and how some adapted to them. It doesn’t alter the fact that we all use a self-organising combination of coping and adapting to handle the many emerging changes in our environment, our social relations and ourselves.

    The challenge as you describe it is to help people go beyond coping to adapt to the changes. Creating communities of interest, or of practice, is clearly one way to do this, but there are a number of others too, including:

    • Not offering products and services that don’t add real value to customers
    • Providing products just when they are needed, just how they are needed and just where they are needed
    • Redesigning products so that they are easier to use by customers
    • Providing context-driven help to customers when they need it
    • Even redesigning customer jobs so that they are easier to do

    As the world becomes more complicated and more complex, it is up to us to make it simpler and easier for customers to use products and services at the same time.

    I would be most interested to hear about what you have learned in your work developing communities for your clients.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  4. Commenting on John’s points above: I firmly believe creating the conditions for communities to develop gives us (marketers) the opportunity to have the customer engagement that will result on the bullet point items he listes.

    I recently reviewed a book called: “The Future Of Competition; co-creating unique value with customers” by C.K. Prahalad and Venkat Ramaswamy; a couple snippets:

    > Value does not reside in a physical product or service only; value lies on the co-creation experience of a specific customer, at a specific point in time, at an specific location in the context on an specific event.

    > Companies are recognizing the customer as a source of competencies; for example:

    o Eli Lilly’s Innocentive Program: http://www.innocentive.com/
    o Counter Strike & Half Life (Games): http://en.wikipedia.org/wiki/Counter_strike

    Filiberto Selvas
    http://selvascano.spaces.live.com/default.aspx

  5. Filiberto,

    I am a big fan of C.K. Prahalad and his co-creation notion. Thanks for bringing him into the conversation. However, I do think co-creation requires some elaboration. As a psychologist I would agree that value does not reside in a physical product or services, it is enabled by them. Co-creation is one way to enhance and enable experiential value. Unfortunately, all too often companies think their co-creation strategy is the value for the customer. Wrong! It is the enabler. Value for the customer comes from the emotional and psychological engagement of the customer. You could say that their engagement creates the experiential value.

    Co-creation can create value for the company and this also comes from the engagement of customers. Here, I am not talking about the sale price but other forms of value. Take the co-creation process that is happening around the Fiat 500 car. Fiat gain insights and a powerful community that fuels advocacy and keep existing customers engaged.

    To be clear, I am not suggesting that there is no value in utility per se. However, the psycho-economic of this form of value are quite different from customer engagement and co-creation.

    John

    John I. Todor, Ph.D.
    author of Addicted Customers: How to Get Them Hooked on Your Company.

  6. John

    It is not clear from your comment on Filiberto’s comment what exactly you think co-creation is, nor how you think customers perceive value.

    A couple of questions to help clear things up.

    • What exactly do you think co-creation is?
    • How do you think customers perceive the value of products, services and experiences?

    And a couple of supplementary questions.

    • Can customers perceive value in simply owning “a physical product”?
    • Can customers perceive value from a product without actually being “emotionally or psychologically engaged”?

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

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