e-Business Strategy:Virtual communities

4.4 Virtual communities

According to Rheingold (2000) virtual communities are 'Social aggregations that emerge from the Net when enough people carry on those public discussions long enough, with sufficient human feeling, to form webs of personal relationships in cyberspace.' A virtual community has the capacity to integrate content and communication, gives access to competing publishers and vendors, and promotes member-generated content. In a business setting the focus is likely to be on developing business networks, conducting business transactions, and job-hunting; the personal and social interaction aspects of an online business community will likely be less well-developed than a noncommercial community. Hagel and Armstrong identify four types of community orientation: interest, relationship, fantasy, and transaction.

Interest-oriented communities typically have high levels of interaction between members on topics of shared interest and are supported by chat rooms, message boards, and discussion groups. The community has a shared interest, such as a sport, music, or hobby. The Motley Fool investment advice site is an example of an interest-oriented community. In the theatre context, an interest-oriented community could provide a forum for theatre-goers to discuss performances they have attended, or for stage managers to share their expertise and to advertise job opportunities.

Relationship-oriented communities are typified by shared life experiences, such as divorce or cancer and the focus is on sharing information and opinions and community support. FriendsReunited is a good example of the power of relationship-oriented community and in the theatre industry a copycat initiative would be ActorsReunited, providing a forum for actors to get together with fellow actors they worked with in the past.

Fantasy-oriented communities are associated with role-playing and imaginary environments. Role-playing games of the Dungeons and Dragons variety are typical examples of fantasy communities. In the theatre context, a fantasy-community could provide an online environment for those who want play out acting roles but don't want to appear live on a physical stage acting in 'real roles'.

Transaction-based communities aid buying and selling. For example, Virtual Vineyards is a commercial site for selling wine but it also has community aspects that deliver expert advice and a forum for wine drinkers to chat with each other. A transaction-based virtual community for the theatre industry could allow members to buy and sell theatre memorabilia supported by discussion forums.

Value can be created for the organizer of a virtual community by selling products and services, taking subscriptions, placing advertising, and selling market research data (figure 4.12). FriendsReunited generate revenue streams from an annual subscription and from advertising (see figure 4.11). A virtual

community in the theatre industry would have potential revenues from subscriptions, commissions on ticket sales, and advertising. Selling demographic data is also a potential source of revenue but has to be approached with care if personal privacy legislation is not to be breached or the trust of the community lost.

The benefits of a successful virtual community are appealing to businesses. According to Forrester Research the paybacks for creating a successful community (in order of greatest importance) are:

• Customer loyalty increases

• Sales increase

• Customer participation and feedback increases

• Repeat traffic to the site increases

• New traffic to the site increases.

However, creating a viable community is not a simple task. The community facilitator needs to monitor content quality, monitor the free-riders (people who take from the community but make no contribution), protect the privacy of members, and nurture the community in the early stages so that it attains critical mass.