NZ e-businesses focus on community building

A sense of community is a great driver of traffic

E-commerce operators are focusing on building communities, delivering social networking functionality to groups as diverse as the creative sector, mothers, financial investors, mobile phone users and many others.

That means website developers and systems integrators are being tasked with building and integrating chatrooms, blogs, and other means of Web 2.0 communications. But communities don’t come out of a box. There has to be some shared interest binding them together.

For New Zealand’s most prominent community site, Trade Me, that interest is buying and selling. From simple beginnings, Trade Me is now one of New Zealand’s busiest websites, going well beyond trading to embrace online dating and friends reunited.

“We build and perpetuate communities,” says Trade Me’s head of commercial and regulatory, Michael O’Donnell.

Research into online communities started in 1995, when Florida academic Michael Froomkin suggested a model where online users would find a “community” of like-minded buyers and sellers, and would migrate to that community for both business and social interaction. Other studies followed, affirming the concept, noting its two-way nature and the idea of users investing in it and sharing content and thoughts.

Trust is another key community concept and is promoted by the community policing itself, O’Donnell continues. Members undergo a thorough registration process and then help Trade Me staff to monitor activity on the site. Trade Me’s member feedback rating system also helps users gain confidence of traders online.

If there are any concerns, such as doubts about identity, members will alert Trade Me staff and posts can be removed. Once some boys tried selling a photo of a kidnapped child, but the “vigilance of raving fans” stopped the sale within hours.

There is also self-moderation on Trade Me’s message boards, featuring 2,000 online conversations across 14 subject areas. Typically around 100 messages a week are removed by the community.

In 2007, Trade Me was the subject of a thesis on online communities by former Unitec student Ryan Elian. Elian, who now works for North Shore City Council, says “reputation” is a major part of communities, as online discussion boards allow members to rate each other. While global auction sites such as eBay are available, the small scale of New Zealand meant Trade Me could offer “a sense of belonging and similarities among its members”, he says.

By making members provide address details, Trade Me is able to verify its members and so boost trust. Feedback systems also ensure sellers will trade honestly to protect their reputations and ratings, Elian says. Interaction between members also allows users to decide whether or not to buy something based on the advice of trusted people.

Such is the growth of Trade Me, Elian notes, that some businesses now use the auction site as their sole sales channel.

Even web developers such as Taranaki-based Webfarm have their own “community” to serve customers. Newsletters are sent out, along with case studies of successful e-commerce sites.

Services manager Brett Wright says creating communities encourages people to return to a website more often. This can arise from interaction between the user and the site owner or from direct interaction among customers.

“Communities are about getting eyes on screen and depending on what is funding the community site, advertising space can be sold,” Wright says.

Systems integrator Gen-i says communities can be online apparel stores such as, which lets people submit ideas for t-shirt manufacture; or global giants such as Sony having forums where users can support their favourite products or services.

Users, argues Karen Monks, Gen-i’s emerging technology community manager, have a sense of ownership of the company, so they will freely recommend Sony.

“From the enterprises’ point of view, they are essential to marketing and product development,” Monks says.

Community sites create brand loyalty, helped by introductions to the company from people who are passionate about it.

“Personal recommendations always rank higher than the manufacturers’ description of the product. Amazon uses this method very successfully,” she adds.

However, the biggest challenge facing businesses here is not technology, but losing control of marketing and PR.

“If something goes wrong with your product you’re going to hear about it very quickly because it’s going to be very public. Apple suffered from this when the Nano was first released. News of scratches on the screens spread quickly through the internet. Apple did respond quickly to it but suffered some publicity issues, Monks explains.

The software to run communities can be bought off-the-shelf and is easily integrated into traditional e-commerce platforms. Free open-source systems for blogs, wikis, forums and more are also available. However, technology is just the start.

“It’s not just a case of build it and they will come,” Monks says. “Once a collaboration platform has been deployed, your job isn’t completed, it’s only just the beginning. You need a solid plan to help build and encourage your members to interact and contribute.

“It needs to be well supported by management and not seen as a toy for chatting but a crucial tool for business development. At the same time you also can’t keep too tight a rein on it, people need the freedom to express themselves and feel they are making a contribution to the community. Communities require careful nurturing to develop their potential and that means having managers from an IT base may not be the best. It requires contributions and governance from all areas of the business.”

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Tags social networkinge-businessTrade MeSpecial IDwebfarm

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