Developing switching costs within communities
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A number of recent examples, including the mass migration of community members from UrbanBaby.com to YouBeMom.com, as reported in the latest issue of Wired Magazine, make you wonder why some communities have strong built-in switching costs while others seem to have none.
I believe that the answer is in having communities that are tied to a transactional infrastructure. As I described in an earlier post, there are 4 forces of increasing returns in communities – members, content, member profiles and transactions. If your communities are purely member and content-driven, without a solid transactional component – like buying, or getting help – then it is much easier for members to pick up their profile and go hang out somewhere else. It is only if the transactions that I need to do become easier and more effective because of my interactions with the community – i.e., buying a book, renting a movie, getting recommendations for photographic equipment purchases – that I will have a hard time to pick up my stuff and go somewhere else.
If that is the case, then you wonder why so many communities are not directly integrated with the transactional infrastructure of the company that is hosting it. If I am a frequent buyer with a company that is now hosting a community – they should enable my buying experience to become better because of that community.
It also makes you wonder how magazines and newspapers, who typically have content-based communities, can increase their community switching costs. Maybe they could affiliate with their advertisers’ transactional infrastructure instead of selling banner ads which annoy all the members anyway.
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November 4th, 2008 at 9:29 am
Francois, I’ve been thinking about this topic lately so your post is well timed. In addition to the 4 pillars of successful communities, I wonder if there is a 5th pillar emerging – integration/bridging across communities?
For instance, my Facebook account is bridged to my Twitter account and these are both bridged to my blog (www.eclecticguy.com). Content I post in any of these locations is immediately shared across the other channels. I found this post of yours, in fact, because you have your blog updates bridged to your facebook activity list. Many of my friends and colleagues do this now in fact. This makes Facebook very sticky for me. Linkedin has taken this one step further with their release of “LinkedIn applications” last week – if I tag a blog post with “LinkedIn” it will show up on my LinkedIn profile. Since LinkedIn is a professional community, I use this feature to link my technical posts but not my personal posts.
If I were developing a commercial community, say like Amazon, I would make it easy for Amazon buyers/community members to bridge their other social sites in to Amazon. So, for instance, all book reviews that I post on my blog are posted to Amazon (or more likely, vice versa).
In many cases, there are overlaps between these communities – especially between “open” personal communities like Facebook and “closed” commercial communities like Amazon. It may seem counter intuitive but my observation has been that bridging these communities actually makes each stickier.
November 9th, 2008 at 5:36 pm
Don’t Touch That Switch…
One aspect of relationship marketing that we’ve discussed a lot is the creation of online communities. There are lots of examples, such as patientslikeme.com out there. But once someone has joined a community, the battle is only half-won. The other……
November 10th, 2008 at 8:36 pm
I really like the framework of thinking about members, content, member profiles and transactions as the four main pieces to a community. What is more sticky? Content or transactions?
December 28th, 2008 at 4:35 am
Hi. I am a user of UB and YBM and was present for the migration. It had NOTHING to do with member profiles and content. The reason the switch was successful was that Cnet had attempted to overdesign the community, and data harvesting was offensively sophomoric. YBM won that fight mainly because it maintained absolutely anonymity (i would definitely NOT want any cross pollination between my FB, twitter and YBM accounts), completely edited out anything that distracted from the core user experience (which is pretty fast and loose) and there are NO transactions. There are no ads on YBM. THere is no point to YBM other to talk with complete impugnity. There is no profit. That’s precisely why we love it.