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There is a lot of research on Brand Communities, defined by Muniz and O’Guinn as “a specialized, non-geographically bound community, based on a structured set of social relationships among admirers of a brand.” (Muniz and O’Guinn 2001).

But do brand communities really exist?

Brand communities imply that the brand is at the center of the community. So in the Harley community it would mean that the Harley bike is at the center, in the Jeep community the Jeep Wrangler or the Cherokee, in the Mini Cooper community the Mini, and in the Fiskateer community, the Fiskars tools.

Is this really what is happening? I don’t think so.

For communities to work, the members need to be at the center of the community, and so the motivations have to be different from the pure hedonistic pleasure of owning a brand/product. The Fiskateers may be the people who come up with most of the new Fiskars products ideas. And they may be their staunchest defenders when the brand comes under attack. But the reason they form a tight-knit community, one that some members say changed their lives, is because they share a passion for scrap-booking. The reason that Harley owners get together is because they share a riding lifestyle passion. Jeep owners, probably because they have a shared aspiration for being adventurous by “off-roading” their cars. Mini owners? Not sure, but according to ethnographic research even people who no longer own a Mini Cooper stay with the community, so it cannot be that the car is at the center of the community.

So why Jeep and not Ford, why Fiskars, why Mini, why Harley ? Because in all those cases the companies have provided environments in which those member communities can operate and thrive. Jeep marketers are providing training camps, and are organizing the barbecues around which members can share their passion. Fiskars provided an online environment for their members to thrive and connected those with offline events as well. But in all cases they are enablers of a shared passion that exists within a tribe or community.

The result of that is what I described in a recent blog post – people use the Jeep, the mini, the Fiskars scissors, or the Harley as symbols to associate with others who share that passion. In some cases they take that a step further and create rituals around those brands, which make the brands more sticky. But at the end of the day, these are not brand communities, they are passionate rider communities, scrapbooker community, adventure seeker communities.

What do you think? Do you buy that, or do you think I am missing something?

Reciprocity is one of the key factors that allows communities to work. As science has shown, humans developed reciprocity as a reflex to become the only hyper-social species without all being brothers and sisters.

In small tribes and groups, reciprocity is often based on face-to-faceness – you physically help someone care for a child, or you help them move their stuff, and expect them to help you back later on. But reciprocity seems to work on a much bigger scale than face-to-faceness could ever explain – think of people supporting the green movement in Iran (#iranelection) by traveling to NY and demonstrating at the UN, or think how even the French all felt like Americans after 9/11.

What is going on here, and how can reciprocity scale beyond face-to-faceness?

In his book “Us and Them, Understanding Your Tribal Mind,” David Berreby says:

My fellow feeling for the people of New York does not depend on everyone of us taking turns doing each other’s dishes… For a city or nation to exist, its members must be good at satisfying their need for reciprocity with symbols, not actions.

Bingo!

Symbols, signals, and rules are the key to scaling reciprocity, and by proxy, the key to making large communities work. If I read advice coming from a community of Firefighters (disclosure: Monster is a client of ours) I will trust that advice even if I do not know anyone in that community because in my mind I equate being a firefighter with a strong sense of duty and trust.

There are symbols and rules that are very strong in humans – race, religion, and language come to mind. But there are others that are much more artificial – think of people who have a shared experience based on attending one of the Burning Man events, people who enjoy the riding lifestyle by driving a Harley, or the importance of uniforms.

So when you think about communities, besides making sure to base them on a shared passion or pain among the members, think if there are other symbols or rules that you can leverage to make the bonds even deeper and the trust higher – which will then lead to decreasing transaction costs and increasing transactions.

And when you do leverage symbols and rules, make sure that they have a shared meaning among the people you want to engage with – Harley may be associated with the love of a riding lifestyle for most Harley owners, but may also be associated with gangs for people outside of that community.

So this may sound like stating the obvious, but too many companies overlook this key ingredient within their community activities.

What trust does in communities is to lower the transaction costs for all participants. If you pick up a piece of advice from a community member in a community that you trust, you will spend less time doing due diligence on that piece of advice than if you got it from a community in which you have less trust. The result is that more transactions will happen in communities or because of information coming from communities with a higher trust level.

Even though we inherently don’t trust information coming from companies, I contend that most companies who engage in community activities start with a positive influence on trust if they do it right.

So what is doing it right?

For starters, companies should host communities that are centered around the members and their shared passion or pain. If they have employees who are experts in the field, those employees should engage, as long as they identify themselves and as long as they do not all sound like corporate mouth pieces. The company should deploy its resources, which members may not have, to ensure quality professional content development, professional moderation services, online and offline events, and other activities that benefit the membership.

If companies provide a true quality service to their community members by having a community with a high level of trust among members, then that trust will implicitly get associated with that company. And because companies usually have the wherewithal to make that happen, they in fact start with a positive influence on trust.

In this social media age, everyone in your company should become a marketer. Like many companies before you, you should empower all your employees to interact with friends, customers, prospects and detractors. Going above and beyond that, let them set up communities within and outside your company’s firewall, about any topic and with whomever they want to hang out with. Many very large (and successful) companies like IBM, Best Buy and Cisco have done it before you – with real success and with very little downside.

Now, as you are harnessing the power of communities, realize that you may have a new asset on your hands – one that some companies have become pretty successful at harnessing, and one which is similar to that of media companies. You now have an audience that others might want to have access to – and that is worth something. Think of Virgin America, which was able to fund the launch of a new hub city through a paid media partnership with HBO. Or think of American Express, with its Open Forum, a community for small businesses, where they are now selling sponsorships on specific sections of their community to partners.

It goes without saying that you should first and foremost think about the value that you will provide to your community members through a partnership. Break the trust they have in you by spamming them and they will leave in droves – leaving you with no asset nor the value that the community was bringing you in the first place.

I get that question so often that I thought I would write a short post about it. What is the difference between a B2B and a B2C community? Or people will ask me, can you please only show me B2B examples because we are different than B2C.

When it comes to communities – especially successful ones – there is no difference between the two. The main interactions in communities do not happen between businesses and other businesses, or between businesses and consumers – they happen between humans and other humans. And that is no different in B2B than in B2C environments.

Sure, some people will show a greater affinity for a consumer product than they will for a piece of enterprise software, but successful communities are never built around products, they are built around the members and their shared emotions. Even the Harley community is not built around bikes, it’s built around a shared lifestyle of the community members. And so the dynamics within that community will in fact not be all that different from the dynamics you would find in a software developer community – it comes down to human to human interactions or h2h.

For my first CMO 2.0 Influencer Conversation, I spoke with Rob Kozinets, a professor of marketing from York University in Toronto, about communities, consumer tribes and word of mouth marketing – not surprising considering that Rob was the editor of Consumer Tribes, a collection of research papers on consumer tribes, recently finished a book on word of mouth, and is one of the few researchers looking at the practice of business through the eyes of an anthropologist/ethnographer (among other things).

We started the conversation by talking about the disconnect between the world of academics and the world of business, especially as it relates to marketing. It is an unfortunate fact that many mistakes could be avoided if marketers were making informed decisions based in part on some of the recent findings in the fields of behavioral economics, anthropology, complexity theory, sociology, and psychology.

One of Rob’s main themes is that consumer learning, opinions and transmission of influence happens in smaller groups – hence the idea of tribes. Today’s tribes have looser affiliations and are more hedonistic in nature than ancient tribes. They are nomadic by interest, rather than geography, and centered around expertise and commercial culture. Consumer Tribes are also not typically focused on a single brand but rather on a whole group, a whole culture or lifestyle, or a set of activities. Another challenge for marketers, according to Kozinets, is that consumer tribes don’t typically develop long-lasting relationships. Even some of the stronger tribes, like the Star Trek groups that were so popular in the 90′s, aren’t as active anymore – people move on as they get more options. It would actually be interesting to see if the Harley community is still as strong as it used to be. People move in and out of consumer tribes, and the tribes seem to have a natural life and death cycle – including a revival stage sometimes.

Of course, most marketers don’t think of their customers as tribes yet, or don’t realize the enormous impact that successful customer communities can have, so for many of them this is an non-existent problem.

According to Rob, one of the big problems with communities is that companies are setting them us expecting fixed ROI. In reality the measurement of the the impact of communities is very hard. They are hard to set up, take time to take off, and are challenging to maintain. And, as Rob points out, a lot of the successful community marketers have had their communities formed for them by their customers – much like Harley.

We also talked about the proliferation of special interest communities sponsored by various companies – e.g., small business focused communities, of which there are dozens. Obviously members will not want to belong to multiple small business communities, so what then? Consolidation, with most members gravitating towards the most successful small business community, or further fragmentation, with more user-driven communities aggregating around micro objectives? It’s hard to predict where we will see consolidation vs. fragmentation of communities as we do not quite understand how people move in and out of those spaces.

An interesting concept which Rob brought up was “share of community time,” which, in a way, is a measurement related to John Hagel’s Return on Attention (John has also agreed to conduct a CMO 2.0 Influencer conversation with me – stay tuned for a date). The problem with calculating share of community time is that there is a huge spread in the estimated number of people who participate in communities – between 100M and 1b.

Other things we talked about include:

• The role of payments and incentives in communities
• Whether online focus groups are stretching the possibilities of online community environments
• How to engage with your detractors as well as your champions
• How, if you are going to open things up, you should have a strategy to deal with criticism that will come
• The pros and cons of having a neat classification system for communities based on the different needs that they are trying to solve
• How community organizers need to think about members first and brand second

We also touched on word of mouth and how most marketers expect word of mouth to amplify their message, when in reality most word of mouth will transform your message.

As usual, you can listen to the podcast on the CMO 2.0 site, and we will be releasing transcripts soon.

About a year ago I wrote about the fact that people have two evaluation frameworks – a market framework and a social framework – and how rewards are not a good idea when looking for community feedback on products.

Authors Ori Brafman and Rom Brafman, in their latest book Sway: the irresistible pull of irrational behavior, describe a research project at the National Institutes of Health (NIH), that confirms the same paradox through neurophysiology.

The NIH researchers placed participants in an MRI machine fitted with a monitor and a joystick to allow the subjects to play a game. At the beginning of each game a circle, a square, or a triangle would appear on the screen. A circle meant that if you succeeded in completing the upcoming task – zapping a figure as it appeared on the screen – you’d earn a monetary reward. Different circles meant different size rewards. A square meant that if you failed to zap the figure you had a penalty of either 20 cents, $1, or $5. A triangle meant that no money was on the line.

When the researchers monitored which part of the brain was active in the various stages of the game they found that every time a circle or square appeared, that is every time there was money to be gained or lost, the pleasure center of their brain lit up – the same center that is associated with the high that results from drugs, sex, and gambling, and which can result in addiction. When triggered, that part of the brain releases dopamine that creates the feeling of contentment and ecstasy – and as addicts will tell you, you need increasing doses of dopamine to achieve the same result over time.

In a separate study, subjects were asked to play the same game, but instead of making or losing money, the participants were told that the better their score, the more money would be donated to charity. Now the MRI revealed that the pleasure center was completely quiet, but instead the “altruism center” of the brain lit up. That is the part of the brain responsible for social interactions – how we perceive others, how we relate, how we form bonds.

The book also describes other case studies of people evaluating things in either their social framework or their market framework. A fascinating one is when the Swiss government was looking for places to dump nuclear waste after World War Two. When they selected two towns and tried to convince the town members to take one for the team by accepting to live near a nuclear dump, 50.8 percent of the voters agreed with it. Thinking that this was still too much opposition, the government instead offered a monetary reward to live next to the dump – the equivalent of $2,175/year. What happened is that after the monetary reward was offered, only 24.6 percent of the population agreed with it. And when the government upped the reward to $4,350 and then $6,525 per year, only one voter changed his mind.

This all proves that using rewards is really bad for marketing. People get addicted to it and they expect it in increasing quantities. This also explains why the SAP developer community had some bullying in the community when they offered individual rewards, and how that all went away when they changed the program so that the overall number of points within the community triggered a donation to a charity.

Ok, so you have a vibrant community. People are submitting ideas for your next generation products, they seem to be having fun, they are engaged and keep referring new members. Your community is growing at a healthy clip and you are happy.

Be careful – your chances of failure are still fairly high.

Let’s look at a couple of reasons why vibrant communities may not achieve the goals they were set up to deliver.

1. You are getting the wrong ideas from your community

There are all sorts of reasons why you could get the wrong ideas from your community. One of them is the use of wrong incentives. If you pay people $10 for 10 ideas you will get 10 ideas – but are those really the ideas that will make a difference in your new product innovation?

Dan Ariely, the author of Predictably Irrational would argue that by tapping into people’s social framework instead of their market framework, which is what you do when when you pay them, would deliver better results. The Economist argues a similar point as it relates to customer reviews (h/t Matt Rhodes).

2. You are getting too close to your community members

There is such a thing are listening too closely to your customers. First off, your customers may not know how to express their needs in a way that would let you help them. They may complain about group scheduling issues, but that does not tell you whether they need a group calendaring or a group task management solution. In new product innovation, there is a huge difference between what is being said and what is being meant.

Second, it is a known fact that innovations based on direct customer feedback leads to incremental innovations at best, not the breakthrough innovations that allow you to steal marketshare from your competitors.

Lastly, and as the late Peter Drucker once said, for most companies a majority of their future revenue stream has to come from people who are not yet customers (Drucker estimates that to be 70% across all industries). If that is the case, then listening too closely to your existing customers may result in products that will stand in the way of acquiring first time users.

So yes, communities are a must in today’s economy. And getting communities to work is hard – really hard. But once you have it working, it may still not deliver what you are looking for. Communities have to be fully integrated with the business processes they are intended to support and need to be driven by the same common sense principles (not that all real world processes are driven by common sense).

If you are trying to leverage communities as part of your marketing, there are a few things you need to approach differently. Some of them have already been described in other posts but I wanted to reiterate them here as part of a bigger picture.

1. Think consumer tribes – not market segments

As I described last week, the most important thing to know about your potential community members is how they behave with one another. That is much more important than to understand the market segment to which they belong based on market characteristics. That does not mean that traditional market segmentation will not allow you to discover tribes in some cases. As someone pointed out last week when we presented this concept at the BRITE conference, traditional market segmentation might have uncovered the stay-at-home moms as a segment in the health market. While true, traditional market segmentation would have described them by age bracket, income level and other such characteristics – and not by the behavioral characteristics that are so critical to understand how to structure the initial community.

2. Think network – not channel

Many marketers consider social media as another channel through which to push stuff to their customers and prospects. What they do not yet understand is that the conversations that are happening between those customers and prospects are much more important in making buying decisions than the conversations that they might have with those same people. So of the essence are the people networks through which the most influential conversations and recommendations are flowing, not the inner workings of social media as a communications channel.

Related to that is how marketers create and distribute content. Instead of creating lengthy white papers and long in-depth case studies, successful marketers are chunking up their branded content, or as my partner Lois calls it “social mediafying” their marketing content, so that it has a higher chance of being picked up and redistributed as part of the network conversations that matter.

3. Think customer-centricity – not product/brand/ or company-centricity

To be successful in today’s marketing 2.0 world, marketers need to rethink many other traditional marketing concepts as well. In most cases all it takes is to recast those concepts in the context of the consumer instead of around your products, brands or company. Examples of concepts that need to be reevaluated include:

• Value proposition – instead of being product-centric, a value proposition needs to become consumer-centric. Look to position your offering as a customer-centric solution, not as feature, function, benefits.
• Brands – most brands are product or company-centric. They need to become customer-centric. How do your customers feel about themselves in the context of your brand? Do they look cool, smart or informed? That is what really counts.
• Focus groups – are usually “focused” on your products or company. They need to become customer centric. Get insights from ongoing customer communities instead of having focus groups, and don’t run those communities as focus groups.
• Product platforms are important, but in addition to that companies now need to look for customer platforms. When a company as diverse as GE can find consumer platforms, that means that most other companies can find it too.

So recapping – every community-based marketing 2.0 activity you undertake needs to have the customer at the center of the activity. When you think about how to engage with those customers and prospects, think behavior, not market characteristics. And remember to always focus on the networks that matter.

If you are running communities, make sure to participate in the 2009 Tribalization of Business Study. You can take the quantitative survey here or you can visit the new companion web site at http://www.tribalizationofbusiness.com.

Most marketers have been trained to use market segments as part of their strategy to approach certain groups of people. Unfortunately when you try to leverage communities as part of your business that no longer works.

Marketers need to move away from market segments, which are based on characteristics, and instead embrace consumer tribes, which are based on behavior.

To understand the difference, let’s use a hypothetical example. Imagine a large health club chain which decides to leverage communities as part of their business. They could target health conscious people, who want a good quality of life and  believe in balance between mind and body, as a basis from which to build a community – that would be using market segmentation. Alternatively, they could look at the tribes that typically hang out at health clubs – such as weightlifters or stay-at-home moms. Weightlifters like to show off and enjoy an audience, they are competitive, they like talking about how much they can lift and what their goals are. Stay-at-home moms prefer fewer people at the gym when they go, preferable women, and like to talk about children issues and community issues.

Now which communities will be more successful in this case? Those designed around the market segment or those designed around the behaviors of tribes?

Reminder: If you leverage communities as part of your business and have not yet taken the survey for the 2009 Tribalization of Business, please do so now, or visit the new Tribalization of Business Site.