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.

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.

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.

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.

In reading the book The Happiness Hypothesis by Jonathan Heidt I came across an important element that makes ultrasocial societies work – reciprocity.

Heidt defines ultrasociality as: living in large cooperative societies in which hundreds of thousand of individuals reap the benefits of an extensive division of labor. Only four instances of ultrasociality are in existence – among hymenoptera (ants, bees and wasps), termites, naked mole rats, and humans. In all species but humans the force that makes that possible is the genetics of kin altruism. In an ants nest or a bee nest, everybody is brother and sister, and since you have as much genes in common with your siblings as you have with your children, the evolutionary drive to leave surviving copies of your genes makes those ultrasocial communities work – shared genes equals shared interest.

In societies that are not structured like bee or ant colonies, the shared set of genes that you have with others drops off rather dramatically – while you share 50% of the genes with your children and siblings, you only share 1/8 the genes with your cousins, and 1/32 with second cousins. In a strictly Darwinian calculation, you would only spend as much energy to save 4 of your cousins as you would for 1 child or brother. That is why kin altruism explains only how groups of a few dozen, or perhaps a hundred, animals can work together. The rest would be competitors in the Darwinian sense.

So what happened to human societies? How did we get fictitious families, like the Mafia, where there is no real kinship, even though they talk about the Godfather and being part of the “family”, to work as ultrasocial societies? It’s the old fashioned “you scratch my back and I’ll scratch yours” phenomenon – which is in fact a mindless and automatic reciprocity reflex. if someone receives a favor, that person will be driven to repay that favor – not because it the proper thing to do – but because it is a built-in ethological reflex. It’s tit-for-tat, hardwired in our brains, that opens the possibility of forming cooperative relationships with strangers. Now mind you that tit-for-tat can only explain the existence of social groups up to a few hundreds. What allows larger social groups is its co-existence with vengeance, gratitude and gossip as tools that reduce the payoff to cheaters by the cost of making enemies.

Those very primitive hardwired human behaviors confirm a lot about what makes online communities work as well – the importance of reputation, the importance of self-organized posses to police communities, the importance of helping one another as a currency, and the failure of communities where reciprocity is not an integral component of the community.

With every company wanting to jump on the community bandwagon you see some pretty silly things happening these days.

One such funny community is the new P&G Tampax social network (ok, they don’t call it that way), which my partner Lois pointed out to me yesterday. Of course, coming from a company that calls Vocalpoint a community instead of a multi-level marketing effort, or their connect + develop effort a product innovation industry collaboration effort instead of a web-based idea box is not so surprising.

Heck, last week I met a CMO who called his mailing list a community.

And then there are the many people and companies who should set good examples and don’t – Seth Godin with his Tribes community to help him sell books, or various community platform vendors that set up communities in which they try to isolate their members instead of affiliating with one another and show community best practices, are just two examples of that.

Maybe one of these days we should create user-generated lists of best and worst community examples. That would be fun.

Following the launch of the 2008 Tribalization of Business study and the three webinars which were attended by more than 1,500 people, we developed a resource page with all the commentary that we could find so far – you can access it here.

We also got way more questions than we could answer during the webinars – which is why we decided to run a more Q&A focused webinar for all those who attended our previous webinars. The Q&A webinar will take place on September 9th at 1pm ET and you can register for it here – we hope to see you there.

We are also gearing up to start the surveys and interviews for the 2009 Tribalization of Business Study. If you have any suggestions or would like to participate, please let us know by emailing me at francois [at] beelinelabs.com.

Yesterday we participated in an online conversation with many of the Society for New Communications Research Fellows (of which I am one) on the Tribalization of Business Study.

We created a slidecast from the experience, which you can view/listen to here:

Note that next week Thursday at 2pm ET , Ed and I will be at it again during a webinar hosted by Awareness. We hope you can join us there and that perhaps we can address your questions directly as well.

In the webinar today on the 2008 Tribalization of Business Study that we did with Deloitte and The Society of New Communications Research it was interesting to see how more attendees who attended the webinar had their communities managed by IT rather than by Marketing. Of course, the poll is not scientific and does not reflect the percentage of companies who have their communities managed by IT, as multiple attendees could belong to the same company – but it is an interesting trend that somewhat confirmed a recent Forrester report that got some commentary in the blogosphere.

So is it a good idea to have your community efforts led by IT, or not?

Personally I think it is not a good idea for two reasons. First off, the default first step that you would expect an IT department to focus on is technology. And as we have found and documented, that is the wrong place to start. If your community will not survive in a discussion thread it will not survive anywhere. The key forces generating dynamics of increasing returns are content, members, member profiles and transaction – not the technology infrastructure nor the social infrastructure as described in this post.

The second reason why IT may be the wrong place to start is because if they get the budget and the mandate to build a community, they will do exactly that – build one. And yet your community may already exist somewhere else – on Facebook, Yahoo Groups, or in some other user-started community like the Tivo community. If that is the case then the best results from leveraging communities will be gained from engaging with the community on their existing turf instead of going through the expense of trying to get them to relocate on your turf.

What is your opinion?

For the second time in six months I got to listen to the Fiskateer case study at last week’s ANA Conference on Marketing Accountability. This time it was co-presented between Jay Gillespie, the VP of Marketing at Fiskars and Spike Jones, the Firestarter at Brains on Fire.

The folks at Fiskars did a lot of things right in order to build this community – they found an area of passion, scrapbooking, and they put the users at the center of their community, not their company nor their products.

In a nutshell, the Fiskateer community is a community of passionate scrapbookers who are helping one another in every aspect of the hobby – from providing social interaction guidelines for the community to finding the right tools for the job. A handful of community leaders are paid by Fiskars, all others are volunteers.

What started as a modest PR project, with a goal of recruiting 250 community members within 6 months, ended up with a movement of 5,000 passionate fiskateers in 18 months. In fact they achieved their original goal of 250 members in less than 48 hours. Another goal was for them to increase chatter by 10%, which they instead grew by 600%. They also blew past their original goal of increasing store sales by 10% and instead increased store sales by 300%.

What’s even better is that the program, which was originally funded by Fiskars at the tune of $1M, is now fully paid for by the box stores.

And just like we found with our own study on how companies leverage communities, they had some unexpected benefits from their community, including:

• The participation of the community in the R&D process
• Having the community members create better advertising than they used to
• Having community members take over much of the customer support function
• Having the community rally around the company when they had a PR crisis on their hands.

The key to success, said Fiskars’ Jay Gillespie, is to keep yourself accountable to the fans – not the company.

When companies deploy successful communities, the benefits are not level-setting; they are truly game-changing.