Leveraging User Content in E-Commerce to Gain and Maintain Market Dominance

A Thesis Presented to The Academic Faculty by Sheila Anne Mahon

In Partial Fulfillment Of the Requirements for the Degree Master of Science in Information, Design and Technology

Georgia Institute of Technology May 2000

LEVERAGING USER CONTENT IN E-COMMERCE TO GAIN AND MAINTAIN MARKET DOMINANCE

Approved:

s*l

?ctci ivicyuire, Ubair Ja^jf Bolter _ZJjaifeOvliOTaiL____ Fred Riggins * ^ ^ Date Approved: April 12, 2000 /

DEDICATION

Dedicated to my family, without whom I never would have gotten here.

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ACKNOWLEDGEMENTS

This thesis would not appear in its present form without the kind assistance and support of the following people: My committee: Pete McGuire, Jay Bolter, Janet Murray and Fred Riggins, who were always supportive and patient as I worked on this. Special thanks to Pete for always responding to my panicked emails with calmness and encouragement. Special thanks also to Fred Riggins for offering his E-Commerce students as research subjects. Survey and interview participants, without whom, this thesis would have been lacking something essential. Stagg who helped me keep my sense of humor, and who has demonstrated his constant faith in my ability to get this done. My family and friends, who listened patiently, commented constructively and were always ready to help me take a break when I needed it.

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TABLE OF CONTENTS

CHAPTER I: INTRODUCTION CHAPTER II: HISTORICAL REVIEW CHAPTER III: TYPES AND USES OF USER INTERACTION
PRODUCT REVIEWS. DATABASE DRIVEN PREFERENCE MATCHING ONLINE CHAT..... MEMBER PROFILES... MESSAGE BOARDS.... ... RATING SYSTEMS.

1 3 9
...9 11 13 15 16 17

CHAPTER IV: THE INTERNET, THE BRAND AND THE CONSUMER CHAPTER V: EFFECTS ON INTERNET CULTURE CHAPTER VI: METHODOLOGY CHAPTER VII: RESULTS CHAPTER VIII: INTERVIEW RESULTS CHAPTER IX: RECOMMEDATIONS
PLANNING FOR USER GENERATED CONTENT.. ESTABLISHING USER GENERATED CONTENT... MAINTAINING USER GENERATED CONTENT

20 27 35 39 46 60
62 ...66 72

CHAPTER X: FUTURE RESEARCH APPENDIX A APPENDIX B WORKS CITED

74 76 80 83

IV

TABLE OF FIGURES

FIGURE 5.1: Examples Of Internet Usage FIGURE 7.1: Purchase Frequency: GVU v. Mahon Survey ,

31 36 37 ..39 40

FIGURE 7.2: Site Loyalty v. Shopping Frequency (By Percentage)... FIGURE 7.3: Where Purchasers Research The Products They Buy Online FIGURE 7.4: What Forms Of Research Have The Most Impact

SUMMARY

As competition for loyal customers increases in electronic commerce, site owners are paying increasing attention to the use of user-generated content within ecommerce Web sites. While research has indicated that incorporating user content into a site can have a positive effect on the site's overall success, we have little information about how or why this is the case. This thesis considers the interplay between usergenerated content and the other factors contributing to the success of an e-commerce web site, including branding and Internet culture. In addition, it uses a survey and interviews to determine how and why user content can impact the success of a site. Based on this research, it proposes a set of preliminary guidelines for designers who plan to incorporate user-generated content in an e-commerce site.

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CHAPTER 1

INTRODUCTION

Our current practice of e-commerce: simple banner advertising, "spaniming" and catalogue remediation is drawing to a close and a more sophisticated form of Internet commerce is taking its place. Soon, Internet based businesses will generate profits, rather than minimize losses, As the 1999 holiday season demonstrated with an estimated seven billion dollars worth of sales, the practice of e-commerce has begun to take hold in popular culture. As we move into a new era of e-cornmerce, we will find a new kind of Web site paired with a new type of customer. The success of this next stage of e-commerce will be based in large part on how well it can draw individuals from this new audience into bonding with particular sites and products, thus creating repeat business. To a significant degree, this bonding will require strategic use of usergenerated content. The emerging strategy of incorporating user generated content into e-commerce is helping to shape the landscape of e-commerce in the present, and bringing companies and customers together to determine the e-commerce landscape of the future. The combination of immediacy and interactivity has required that familiar commerce issues such as repeat business, the brand, the customer, the culture and profit be approached in a new way, and user content is proving to be an ideal way to solve these problems. The

user content approach aligns the customer with the company, forming a partnership that instills value into the transaction of buying goods and services over the Internet that benefits both the consumer and the company. User generated content has helped catapult a handful of e-commerce Web sites to a position of market dominance. While user content is neither a requirement nor a foolproof indicator for success, there does appear to be a connection between the two. The public, while still tentative when it comes to equating commerce and community, has clearly indicated their support of a more community oriented approach to commerce in this new medium, suggesting that the connection between user generated content and success is growing stronger. To this point, there has been a limited degree of understanding surrounding why these elements have led to success, and what factors can mitigate this victory. This thesis investigates how and why user generated content benefits e-commerce Web sites. In addition, empirical evidence, collected from survey and interview research are used to determine why user content has often been a successful part of e-commerce sites. In addition, broad guidelines are established to make the path toward increased user interaction more clear and fruitful for both the company and the customer .

CHAPTER 2

HISTORICAL REVIEW

As e-commerce has become a viable avenue through which the general population can and will continue to make purchases, the time has come for closer attention to be paid to the strategic opportunities afforded by the medium. Rather than focus on the limits of the technology; namely security, speed and access issues, which have taken center stage up to this point, it is time to look beyond these issues to spotlight the underlying challenges and opportunities this new way of doing business presents. It is only though understanding and exploiting these opportunities that virtual businesses will flourish. These opportunities present themselves in this new medium both as remediations of older methods of doing business and new options which have been unavailable until the advent of e-commerce. The most significant of these opportunities is the ability to place a greater level of authority in the hands of the consumer by offering her both direct influence on the content of the site and direct access to the other consumers who use the Web site. While earlier Web sites have offered some means of user interaction; historically, these methods have been highly limited. Despite hype about the interactivity

of the Web, true interactivity has been severely limited. Simple e-mail and other feedback avenues have focused on allowing the consumer contact with the business, with varying degrees of importance placed on the business' response to the consumer. A recent PC World Online article concludes, "No matter how up-to-the-minute a company Web site may seem, chances are e-mail inquiry will go unanswered. Even when a Web site returned an e-mail message, 63 percent of the responses didn't address the original question, and 37 percent of replies were auto-responses" (Spring). Rather than extending a feeling of inclusion to these users, this limited functionality frequently results in users feeling distanced from the world of e-commerce, as it fostered the perception that the consumer was on her own in cyberspace. Further aggravating the issue, as competition increased, many people assumed that since 'the world was at the user's fingertips' the only way to compete within ecommerce was to have the lowest prices. As recently as August of last year, a professor of management policy from Boston University warned, "after you've poured out millions for marketing, someone else might come in three years later and undercut your pricing" (Emigh), reaffirming the notion that customer loyalty seems to have no place in the realm of digital business. However, this attitude has been changing recently, as there has been an increased understanding of the effect value-added services can have on the success of an online business. As the first generation of e-commerce ends, those companies who best understand and are able to exploit the potential of Internet commerce will be able to gain and maintain market dominance within the Web arena. The others, who may have enjoyed

dominance in the offline world, or those who fared well in the early domain name land grab, will fade into memory of a time when all that was necessary to establish an online Web business was a domain name and a server, Despite the enduring myth that e-commerce is an inexpensive way of doing business, it is becoming more expensive to run a successful Internet business. The growing pressure of profitability within the investment community has created a more intense burden on e-commerce Web sites to create and maintain loyal customers. At the same time, the traditional methods of establishing and expanding this customer base which have proven successful in the brick and mortar business world are proving unsuccessful or even detrimental in the electronic business world. Even virtual businesses that have existed solely online have not necessarily fared much better. Because the field remains largely unexplored and there is little consensus on what e-commerce users actually want, the guidelines for e-business development are hazy at best. While some innovators have been successful as the result of the chances they have taken within this domain, the majority have lagged behind, preferring the safer route that fails to analyze customer desires but reduces costs and can be easily explained to upper management, boards of directors and stockholders coming from a more traditional business background. As e-commerce becomes more common and begins to establish its own standards, there is a growing understanding that many of the principles that move regular commerce forward have online components. E-businesses understand that it is no longer enough to get users to a site. Now, users must remain with a site rather than defecting to

the competition whenever prices are lower. Concepts such as customer service and customer retention are beginning to find a home within the electronic commerce landscape. It has been noted that, "an established merchant can actually hurt its brand

by having poor online customer service" (Spring), an idea which causes concern to many online retailers. This has led to a new focus on maintaining market dominance by retaining customers. To this end, a growing number of e-commerce Web sites have begun to develop a community to support their products, as well as the business as a whole. Product reviews from customers, online chats with experts and discussion boards focusing on the products and the issues surrounding the products have become more common in the digital realm of business. It is in this arena of e-commerce that user content seems to be most effective, as it appears to impact the perception of customer service, and, consequently, customer retention. While the research in this area is inadequate, it does indicate that customers appreciate the ability to have an active voice within e-commerce. Retailers have been reluctant to embrace their customers in this way, however. The general fear is summarized by Manish Meta, senior management for online support at Dell, "when you finally get customers to select a product, to introduce something that might cause them to abandon a purchase would not be a good thing" (Tedeschi, Online), illustrating the gap between how retailers perceive customers to use information and how customers actually appear to use it. Similarly, a New York Times article characterizes online chats within e-commerce sites as being, "a double-edged sword that is made more dangerous by the fact that the long term value of chats is difficult to quantify" (Tedeschi,

E-Commerce), because customer comments during such a chat can be unpredictable. Currently, it appears that these fears are opposed only by the hope that customers will appreciate the site's honesty. For many retailers, this is simply not enough. At the same time, it seems clear that customers like the ability to have a voice online, and that this voice can foster a sense of loyalty in ways that other marketing schemes do not. The success of the Web site E-pinions, where users are invited to leave their opinions concerning a wide variety of subjects demonstrates the eagerness with which Internet users share their opinions. Similarly, the growing number of successful online communities, both free and those which charge a fee for membership, surrounding subjects from politics and current events to highly specialized topics where only a few members are able to participate also indicate the ease with which online entities can foster community and sharing online. Yet, it is not necessarily understood why or how the incorporation of aspects of community within e-commerce leads to more successful business. The retention community building has within these sites extends beyond those customers who participate in the chat room and product reviews to the others who ignore these aspects of the site and maintain a more traditional approach to purchasing their goods online. At the same time, there is still some contention regarding whether or not community aspects actually result in more sales within the Web site. Some have suggested that while the community may lead to more users to the site, there is a disconnect between the number of visitors and the number of actual purchases made.

Additionally, there is little information regarding what constitutes a good user of these community components. While there are some examples existing today that are clearly better than others, it is not entirely clear what makes some work while others flounder. As this particular area of e-commerce has not received much attention at this point, it is not entirely clear that effectiveness is even a function of how well the community and the business fit. This thesis will focus on unearthing the reasons behind the effectiveness of community within electronic commerce, and using those reasons to establish general guidelines for their use. Without this information, incorporating product reviews, online chat rooms and/or message boards can lead to clutter and confusion as easily as it can help businesses use these aspects to increase their sales and rates of customer retention. Having these guidelines in place will offer e-business two main benefits: a standard by which they can incorporate community into their Web sites in a manner that will benefit the business and the consumer and a foundation upon which further advances can be built.

CHAPTER III

TYPES AND USES OF USER INTERACTION

User interaction in an e-commerce Web site is essential to draw and hold users who may otherwise be lured away from the site due to a lower price. But interaction with other customers is not an end in itself. It becomes productive to the site owner only insofar as it supports the communal and branding goals of the business, the site and the owner. Specifically, the e-commerce Web site must use user interaction to encourage the customers both to make purchases now, and to return to make future purchases. The following pages describe currently successful techniques for both encouraging user interaction and making it communally productive.

Product Reviews One of the most widely used forms of user content within e-commerce is customer provided product reviews. The customer reviews often appear alongside professional reviews of the merchandise so that subsequent customers have both types available to them while they are considering a purchase. The different forms of descriptions work together, creating a more complete picture of the product.

Amazon.com was one of the first e-commerce Web sites to successfully incorporate customer written product reviews into its customer experience. A variety of other sites have followed, including Chumbo.com, kbKids.com and Emusic.com, each of which have had positive responses to these reviews, Even Borders.com, one of Amazon's competitor's has chosen to incorporate this type of user content in the hope of closing the competitive gap between them. PC Magazine elevated customer reviews to the level of a standard when they described E-Toys as "a strong number-two presence in this market, but its... lack of customer reviews leave it slightly lacking" (Pike) in a recent article ranking e-commerce Web sites. In some senses, product reviews in the online realm are reformatted versions of the user testimonial from earlier media, where customers are able to give their generally positive opinion of the product in question. However, within e-commerce, it is not uncommon for a customer review to offer a negative opinion, and these negative opinions are beginning to be recognized as adding to the integrity of both the reviews and the site as a whole. At the same time, product reviews can sometimes take the place of a more traditional product description, offering a particular customer's personal experience with the product, with little attention given to objectivity, essentially creating a more experiential view of the merchandise. Due to the combination of possible negativity and their inherent subjectivity, product reviews appear to work best when the company does not actually make the product being reviewed. Most companies who have successfully incorporated customer product reviews are merchandise resellers rather than manufacturers. The reviews

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become a method of transforming the e-commerce transaction into an experience readily differentiated from other sites selling the same products rather than an attempt to market any particular product directly. Continuing success in e-cornmerce will require both broader use of this technique in reselling sites and greater attention to how it might be used productively in manufacturers' sites.

Database Driven Preference Matching Preference matching, in its simplest form, is a high tech version of suggestive selling. Rather than the company choosing a particular product to showcase as its featured product, however, e-commerce is able to utilize sophisticated databases in order to identify more accurately products which are likely to interest a particular customer. Preference matching is a typically invisible method of capitalizing on user information, often not considered a form of user generated content at all. While it is true that the customer is most often an unknowing or passive participant in this form of content generation, customer preference matching comes directly from user behavior. Preference matching is a largely unobtrusive way of drawing the customer into the overall process; rather than highlighting the customer's choice to involve herself, it emphasizes the need for customer's continued compliance with the process. Virtual Vineyards (www.wine.com) and Reel.com both make good use preference matching, both as a regular function of the site, and as a method of generating targeted sales and

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specials for groups of customers, Interestingly, both sites rely heavily on humans in addition to computer programs in creating matches to increase their personalized feel. Specifically, employees at Reel.com are encouraged to hand match films as they choose (Easton 98), and Virtual Vinyards employs both a sommilier and a food expert to custom martch wines to recipies. These personalized touyches have paid off on both sites, both in increased sales and a firecly loyal customer base. While this form of user content is not apparent to the customer, preference matching does use information from previous transactions as a means of providing additional information that can be beneficial to the customer while generating additional sales. Provided that the company can successfully target customers, preference matching can be a way to simplify the customer's life, thereby making her more loyal to the site. Preference matching is a relatively easy way for companies to utilize information they already collect into an ancillary service for their customers. Both companies selling their own products and those distributing other companies' merchandise can customize their databases to be meaningful auxiliary services for their customers. Preference matching can become a starting point for other, more involved forms of user generated content. For preference matching to be more widely effective, site owners will need both a broader database and more sophisticated analysis tools, capable of tracking more variables. As long as such efforts do not violate customers' perceived sense of privacy, preference matching will be one of the most powerful and unobtrusive tools for ecommerce.

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Online Chat Online chat has been incorporated into e-commerce sites in a variety of forms, taking on a wide range of functions within these sites. Most sites use chat as a means of offering customers a convenient place to talk to staff members or special, generally expert, guests. Some sites also use chat rooms as a means of allowing customers to interact with one another without a direct company presence as a free-form experience with little or no direct relation to the business of the site. As a standard of membership has developed for chat rooms, the online chat function gives companies a way to collect additional information about their customers while transforming them from a "customer" to a "member." Once the customer becomes a "member," site loyalty generally increases as the customer perceives she has a stake in the success of a group to which she belongs. At the same time, membership forms provide the company with vital information about their customers, including several lines of contact with the individual. Providing customers with a place for real-time chat can be an ideal way for them to connect with one another within the site. Chatting allows customers to get a sense of the other personalities who populate the site, giving the site an unique depth and texture. Customers in need of information are given an immediate place to ask for it and others are given the opportunity to provide relevant information, giving them a feeling of adequacy, importance and participation in the commercial enterprise. Unfortunately, each of the opportunities associated with hosting a place for online chat carries with it the potential to work against the company. While customers have the

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opportunity to get to know their peers, they may find that they don't like them. Similarly, a question asked of another customer could result in misinformation, leading to a general distrust in the site. Alternatively, one member could present negative information about the company or a particular product while leading a customer to another site. Often, e-commerce sites use chat rooms as a means of facilitating customer service, both technical and non-technical to avoid some of the possible negative outcomes. By narrowing the focus of the chats, companies are able to direct the questions to staff members, thereby insuring that all questions are directed to people who will present the company in a pre-determined manner. At the same time, the company is also able to ensure a high quality of information, as well as information that will keep the customer shopping within that particular site. The potential of electronic chats poses a dilemma for e-commerce. It can bond customers through a sense of participation, but can alienate customers through false or derogatory information entered by any member. The key to solving this problem may seem to lie in improved software tools that alerts staff to certain types of conversations and triggers intervention, however a more personal approach is more effective. Relying on an automated monitoring device to flag staff members forces the staff to police the conversation, rather than guide it, potentially creating an adversarial atmosphere between the site and the customers. More effective would be a constant staff presence, able to guide the conversation away from potentially damaging subjects while simultaneously creating a bond between the company and the customers.

Member Profiles Of all forms of user generated content, member profiles are the least connected from actual purchases. However, member profiles offer customers the a unique ability to share information about themselves within the site. As a result, profiles can be online community-like as they offer customers to share information about themselves with their peers. At the same time, however, member profiling alone is not enough for members to forge true connections with one another within a site. In addition, member profiles can present a content problem similar to chat rooms: what happens when members share information other customers would rather not know about? Free-form member profiles carry the possibility that some customers may be offended by what they find and therefore reluctant to return to the site. One of the most successful uses of member profiles is the Virtual Garden section of the Garden.com Web site where customers are encouraged to create and maintain "gardens" which other members can browse. By focusing the content on gardening, Garden.com narrows the distance between the profile and the sale, and anchors the profile in interests common to all customers. In addition, the gardening metaphor reinforces the language common to the group by encouraging members to represent themselves through their gardening choices, Even though particular gardening choices may not be valued by all members, gardening decisions are unlikely to warrant reluctance to return to the site. The seasonal nature of gardens encourages users to return to the site so they can update and reorganize their gardens over time, making it an ideal choice to

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inspire loyalty among the users. Even if individual visits to the Virtual Garden do not lead to sales within the garden.com Web site, having a "garden" there does make customers more likely to buy their gardening supplies through the site when they are ready to make purchases. There is significant potential for extending this technique to other sites.

Message boards Like member profiles, message boards can be somewhat removed from the purchase making process, making many e-commerce sites reluctant to embrace them. Conversely, though, message boards offer customers an opportunity to communicate with one another in an environment that can be regulated by the company. In addition to giving customers the chance to communicate with one another, it also allows the company to become familiar with its customers and their opinions, thoughts and interests over time. When successful, message boards can become an environment where customers create strong bonds with one another, sharing their opinions and thoughts on a variety of issues. As a result, the company gains access to information about its customers that it would be unlikely to gather in any other fashion, while creating a situation which makes loyalty to the site the easiest option. Facilitating a successful message board within an e-commerce site can be rather complex. While the company can create and enforce rules regarding how the board will be moderated, especially concerning what information, language and topics will and will

not be posted to the site, some problems can arise. Unclear rules can lead to feelings of mistrust or censorship. Too many rules can stifle discussion and discourage people from participating. Too few rules can result in conversation straying far from the product or service line the company would like to see, although this type of freedom is often necessary for a successful board. Skilled moderators can be very useful in helping a company to build and maintain successful message boards. One company which has been successful in establishing a focused message board system is Cisco, which created a message board as a component of their customer support network. As with other examples, a narrowed focus eliminates some of the problems which the message board scenario can present. As Cisco customers seem to enjoy sharing their expertise with other customers, the message board is successful, accounting for between 350,000 and 400,000 transactions per month. The resulting decrease in volume in the customer service call center has both reduced costs and allowed representatives to focus on more complex customer problems more effectively (Seybold 141). While the expert dialogue that occurs on a Cisco message board is unlikely to be duplicated in less expert environments, the success of these bulletin boards has been replicated on Web sites with less experienced users. The key is to highlight a connection between the users that can serve as a point of community. From there, the conversation, and the sales, will grow.

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Rating Systems Customer ranking systems work with other forms of user generate content to provide an easy reference point for all customers. Generally, the customers themselves are given the means to decide how other customers should be ranked or rated. With a rating system in place, customers have a visual cue as to how invested in the success of the site the member in question is. This investment generally has some correlation to the quality of information provided, or its trustworthiness. One of the most highly regarded and well known raking systems is E-bay's, which is entirely anchored in sales experiences. As customers deal with their peers, they are encouraged to leave information about that experiences with them for others to see. When subsequent customers come to the site, they can evaluate potential vendors or customers by seeing what others who have done business with that member have said about the experience.

While each form of user interaction has is benefits, combining a number of these forms within a particular site often provides far better results than using any one alone. But as the amount and variety of user content increases, customers find new reasons to return to the site, and become more loyal to the company as a result. The sense of community resulting from these components transforms the connection between the customer and the company from a transactional model to a relational one where the customer has a stake in the continued success of the company. Each type of content has

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unique strengths and weaknesses, which may translate differently to particular ecornmerce sites. In addition to creating more loyal customers, well chosen and integrated user content also becomes part of the brand of the online business, helping the company make and keep relevant promises to its customers. At the same time, because the users constantly add to the site's content, some of the burden in maintaining a fresh and applicable site its removed from the company. When careful attention is redirected towards the content generated, an attentive company has an opportunity to better serve its customers. By doing so, they are able to, "anticipate its customers' current and future needs - even before customers can articulate those needs" (Ward 88) directly to the company through online or more traditional channels.

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CHAPTER IV

THE INTERNET, THE BRAND AND THE CONSUMER

While branding and responding to customers have been perennial commercial issues, the transition to the Internet has complicated them. The interactivity of the Internet has made the stasis necessitated by traditional branding not only a liability, but also an impossibility. Similarly, the immediate nature of the Internet has collapsed the time between a customer's problem and the need for a solution. In order to be successful, site owners need their brands, as well as the company as a whole, to respond to individual customers as soon as possible. Despite the overwhelming growth and success of e-coninierce within the past several years, the issue of branding an Internet business has remained largely misunderstood. Even expert marketers have had trouble mapping traditional branding concepts onto the fluid and complex nature of online business. On the whole, two main theories have developed: one which purports that branding efforts designed for offline endeavors can be extended to encompass the Internet based branch of the brand, and another, which attests that the two entities must be kept separate if both (or even either) are to survive.

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Further complicating the issue has been the fragmentation of attention within the popular culture resulting from the multitude of new media avenues. As the methods of reaching the public increase, the products and services under consideration seem to be growing more similar. Establishing and maintaining a brand, either online or off, has become more challenging: in more consumer-packaged-goods segments, where the strategy had its greatest success, rival products now differ so little that brands have become hard to promote. Marketers are resorting to new media and new kinds of messages, while feeling less and less confident about their impact (Sealy 172). Rather than seizing upon the Internet as the solution to their branding woes, marketers are forced to step back and admit they do not understand what it means to brand in this medium, lest they prove it to the global community through a misstep. The communications explosion has made creating a brand that will stand out from the competition increasingly difficult. However, the explosion itself cannot entirely account for the problems many e-marketers have experienced in creating successful Internet brands. Rather, at least part of the problem stems from these marketers' inability to understand the e-consumer and what is important to her as she chooses a site with which to do business. While the creators of e-eommerce and Internet brands may understand that, "cyberspace is not an extension of real space. It is a different medium and environment, with problems that rarely occur outside of cyberspace. It also has rules that are different from any other medium" (Morris), those responsible for marketing e-

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commerce to the public have not understood these differences. As a result, they have been unable to alleviate problems to the satisfaction of these e-customers. The situation has been so confusing for some companies, including a number of highly successful, large-scale offline companies, that a baseline effort has become standardized across industry lines. These companies have sidestepped the issue of branding through the creation of value by relying on the "dot com" image in hopes that it would be enough to pass as a brand. For a brief time, this type of branding has been successful, however, the strength of the dot com image appears to be crumbling. As more established e-businesses, such as Amazon, E-Bay and Yahoo! drop the dot com from their names, a more traditional brand image is taking its place. It seems only a matter of time before a heavy reliance on the dot com image will become a hindrance rather than a help to these companies. First generation Web sites often relied on price as a means of differentiating themselves from their competitors. While this proved an effective method for generating a one time purchase, it failed to motivate the customer to return for subsequent purchases. Rather, it created an environment where each purchase generated a search for the lowest price without regard to previous dealing with a vendor. Prolonged longevity with the hope of financial solvency can only be achieved on a field other than price competition, further emphasizing the need for marketers to identify and understand the consumers' needs and desires when attempting to create a soluble brand. Understanding the e-consumer, however, is a different process than understanding the more traditional consumer. Creators of successful e-brands have capitalized on one

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of the fundamental differences between traditional and online business practices: "where traditional marketing often treats customers as an undifferentiated mass, the Internet allows a company to discover and exploit their individual interests" (Sealy 175) offering marketers greater freedom in creating and updating successful brand images. Rather than necessitating a search for the "typical" consumer, the flexible nature of the Internet allows the company to tailor its image to meet the specific needs and desires of specific customer subgroups, In addition, the Internet's interactive capabilities allow the company to extend the customer's presence within the site by encouraging her to introduce content to the site, thereby becoming a co-creator of both the site and the brand. User generated content gives marketers the ability to identify what promises need to be made and kept in regards to the customer. Rather than resorting to conjecture drawn from focus groups or sampling, user content provides marketers with relevant first hand information from actual customers, By capitalizing on the benefits of user generated content, marketers create an environment that: permits companies to put ...separate channels of customer communication into a single, focused, coherent response mechanism. Marketers can create awareness, educate, generate trials, reward loyalty, provide customer support, and generally simplify the customer's life (Sealy 173) within a single Web site. Through this process, the resulting brand has relevance and import to the customer, while remaining flexible enough to respond to individual customers as well as customers as a whole. As in the offline world, online marketers are pressured to differentiate their products from the competition, no matter how slight the differences between them may

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be. Online, the brand must be established not only to support the purchase transaction, but also as an experience that can be differentiated from any other experience available online or off. For any product online to achieve some degree of broader market acceptance, it will "need to attract not only a broader base of customers but also a network of ancillary products and services" (Ward 88). User generated content becomes a type of unique ancillary service that helps to differentiate one Web site's e-commerce experience from another's Unlike price cutting, this is an advantage that will not only survive over time, but will also thrive and become stronger. Foregrounding user content within the e-commerce site presents a direct and highly visible way of highlighting the customer's importance. Of course, the customer has always been important, but e-commerce has made the customer more aware of her ability to effect the companies with which she does business, A successful member of the traditional retail industry explains the change: the Internet hasn't changed priorities. It has simply added another layer of urgency to an already established agenda. Our products and our service are all we've got to build on. What on-line shopping has done is force managers to examine their priorities in newly creative ways. And that in itself opens up a whole new realm of possibility (Maruca 161) In this way, electronic commerce challenges companies to reinvent commerce for the medium. Rather than simply identifying a new medium through which business can be done, the Internet provides companies the opportunity to identify new ways business can be done.

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Because the Internet minimizes the costs of interacting with the individual consumers, companies engaged in e-commerce have a newly realistic opportunity for contact with their consumers. By making contact with them, they are able to tap into a pool of knowledge about their products from the people who have the best understanding of their actual practical uses. In this way, "consumers become a new source of competence for the corporation. The competence that customers bring is a function of the knowledge and skills they possess, their willingness to learn and experiment, and their ability to engage in active dialogue" (Prahalad and Ramaswamy 80), with the company can be a highly profitable affordance. As the company better understands the consumer, it can better learn to serve her needs and desires, even as they change over time. By drawing on an unaffiliated public to provide information about saleable products, the company proves its affiliation is to the customer rather than to the supplier, or to a certain extent, to itself. As a result, the customer is given more reasons to trust the retailer with each opportunity to provide content within the site. Encouraging user content within commerce is a choice to de-conimodify their products by attaching changeable information and reviews. The consumers effectively purchases the information as they purchase the product and vice versa. Customer content dilutes the perception of the site as a retailer while presenting itself as something more than that without sacrificing sales. While the customer has always been an important part of the commercial equation, the transition to online commerce has elevated the customer to a new level.

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User content is a meaningful way for a company to signify this increased importance within the Web site while simultaneously benefiting the company. In addition to advantaging the customer relationship, user content also advances the online brand. For the site owner, collapsing the distance between the company and the customer to create and maintain a relevant and dynamic is not only logical, but necessary to ensure relevance to the customer base in this. At the same time, the company is able to demonstrate their participation in and support of the culture of the Internet.

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CHAPTER V

EFFECTS ON INTERNET CULTURE

As demographic research indicate a relative homogeneity , it seems likely that its culture would remain intact to this point. Considering that the Internet's early adopters were mainly academics and computer programmers, combined with the limited availability of access, these original users formed a tight bond, and exhibited, "the spirit.. .of pioneers cooperating with each other in the exploration of new territories" (Besser in Johnston andJohal 184), in an environment where competition was not a concern. One article discussing the culture of the Internet describes: if there is one thing that seems to captivate people more than anything else from the moment they first make contact with the Internet it is that inexplicable sense of civic pride and community spirit that bonds each of us to every other user on the net (Duetsch in Johnston andJohal 183). Although this feeling may have dissipated some with the influx of new users since the explosion of the World Wide Web, a greater number of users have helped transform the

While the population of the Internet is becoming increasingly diverse, the entry barriers of education monetary success remain. The resulting population subset can be considered to have a great deal in common, despite the many differences between them.

27

Internet from a place where people informally agreed on the way things should be done into a true Internet culture with values, mores and codes of conduct. Whether it ever actually existed as such, the Internet of years past is often presented as a virtual Utopia where free thinkers could meet and exchange ideas without fear of ridicule or pressure from the commercial world. At that time, commerce on the Internet was perceived by some as a threat to this culture. How could a community guided by intellectual sharing and networking prosper alongside competitive business? The two seemed incompatible; commerce in the electronic realm would only serve to undermine the spirit of cooperation that had become the standard in the virtual world. Johnston and Johal present the encroachment of commerce as: colonisation of a community that perceived itself as a fairly closely-knit community of peaceful academics, innocent of the cut and thrust of commerce by the marauding buccaneers of digital capitalism has historic resonances (179). They, and others like them, "would argue that e-commerce has brought about the end of the true Internet culture, leaving in its wake two distinct cultures which use the Internet for distinct and opposing purposes" (184). It seemed as though a choice would need to be made: participate in the community of the early Internet as a whole by aligning oneself with the communities established therein, or abandon those communities and participate in the emerging culture which embraced commerce and competitiveness. While those who made the choice to accept the new commercial influence were in the majority, the purists, they contend, are left to, "'[fight] for the preservation of their culture' in the same way that critics of Third World development oppose change" (184). The others, those

28

who embraced the commercialization of the Internet, or at least did not oppose it, were often viewed as a sub-culture of late adopters willing to extend the real world into the virtual realmWhile there was certainly an initial conflict between these two opposing purposes for the Internet, the conflict seems to be approaching resolution as a result of user generated content. The incorporation of the users' voice in e-commerce disputes both the idea that business and independent thought cannot exist in the same arena, and that there are now two distinct and incompatible Internet cultures. The need to create user content within e-commerce arenas offers the consumer a sense of power previously unavailable to her by giving her both a voice and an audience. Rather than being a passive consumer, user content allows the user to actively affect the nature of the commercial experience for herself and for all subsequent users. Because product reviews, postings to message boards and member profiles become "residents" within the e-commerce site, the user's words and personality become intertwined with the site itself. In this manner, subsequent users are touched by, and possibly empowered by the content contributed by the earlier user. A chain of cooperation within commerce is established; once established, it builds upon itself. This cooperation becomes a type of conversation between the customers and the company itself. As the conversation continues over time, a community can develop and grow as the time passes. Rather than being an advantage solely for the consumer, the communal spirit and empowerment benefits the commercial interest in the chain as well. One e-commerce developer comments:

29

Providing the means for people to interact on your Web site allows mutually rewarding relationships to take root. Ideally, loyal visitors recruit and retain others like themselves, because more people participating in conversation - whether for entertainment, education, or emotional support - often enhance the conversation for everyone (Figallo 62) Expanding the relationship between the seller and the buyer, then, allows for an enhanced environment which benefits both parties. For the consumer, the Internet audience

presents an opportunity to communicate with a larger group of consumers than previously conceived possible. For the company that finds and supports ways for consumers to participate in commerce beyond the purchase transaction, an expanded, loyal customer base can result. While all forms of user generated content serve to incorporate independent thought within a commercial landscape, different methods of incorporating user conent have different functions. The practice of including user generated reviews of products for sale utilizes aspects of older business practices while capitalizing on the capabilities created through this new medium. Rather than attempting to recreate a practice from the recent past, where mega-stores, vast shopping malls and vast discount warehouses have become so common, these reviews attend to a business affordance that existed in a time when the corner store owned by familiar faces was the norm. Customer written product reviews remediate the corner store of days of old where most customers knew each other by name and character and held conversations with one another about the purchases they made. The community in which customers lived extended to the store, and customers trusted both the store owner and other customers' opinions.

30

While it may seem unlikely that customers would be willing to return to trusting commercial vendors in the brick and mortar world of retail commerce, the roles of honesty and community within the foundation of the Internet has brought to life a new opportunity for this type of trust. That the spirit of trust and sharing pervaded the Internet before commerce stepped foot onto the landscape has changed the perceptions of the online information, even within a commercial realm. One surveyed user highlighted the tension between her perception of vendors in the two different realms by describing what occurs in the offline world as "advertising," while describing similar information online as "product descriptions," While this differentiation may not be present grossly disparate views of information, it does suggest an altered perception of commercial intent. The original spirit of the Internet continues to exist despite the introduction of commerce. That many customers rely on the Internet to research product information also indicates that there is a higher degree of trust within the medium than in others. The following survey (see Figure 5.1), taken from The Harvard Business Review, demonstrates that customers use the Internet as a source of information regarding products they intent to purchase:

Examples of Internet Usage Reason for Use E-mail Search for Product Information Shopping or Purchasing Goods Downloading Software Searching for Information (Fumell and Karweni 375) Figure 5.1 Home % 52 47 22 52 50 Work% 91 73 j 30 64 84

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The fact that users are more than twice as likely to search for this information online than purchase products online does point to sustenance of at least parts of the original Internet culture. Another example of the low level of commercial interference within e-commerce is the negative reaction Amazon.com experienced when it recreated a common brick and mortar book selling convention of accepting money from publishers for showcasing certain books at the front of the store. The public outrage over Amazon's selling space on their front page so that certain books would be designated as "Editors Choice" offered an early demonstrable indication that Amazon had been successful in creating a community for its users rather than simply a place for them to buy books. The highly publicized customer opposition to this practice demonstrated a fundamental change with the introduction of the new medium. Rather than identifying the retailer as an online equivalent of the brick and mortar store, the e-commerce user saw the online bookseller as something that could be trusted; Amazon was a sort of haven where users could contact other readers as well as the makers of books. When the public objected to Amazon's remediation of the preferred book model, the company was faced with a choice. They could explain this practice to the public in a way that would make it clear that there was no intention of changing the book selling world, or they could make a change that would create a chasm between the mediums of selling books, Amazon apologized publicly, explaining they had learned, "our readers have higher expectations for us. We've responded by trying to meet their higher

32

expectations" (Stone), setting a new policy that all advertisements would be clearly flagged in the future. In addition, Amazon responded more directly to its customers by amending their return policy to include any book purchased as a result of one of these reviews. The Internet culture's basis in trust allows users to interact in a different manner than they would in an offline situation. Contact with content generated by other customers is able to trust the other customers "within" the site as well as the corporate entity behind the scenes which makes the choices about which reviews will be included. Customers assume that reviews written by other customers are accurate and can be trusted. Similarly, they accept other members of a chat room as other customers, and take their comments at face value because these are the standards that have been established for this kind of dialogue. The overall atmosphere of trust and camaraderie, then, has survived the entrance of commerce to the Internet. With the help of user generated content, it appears that commerce can become another way to strengthen the bonds between users. For some, the commercial atmosphere may even provide greater numbers of opportunities for connection as these connections can be grounded in highly practical, everyday contexts. Rather than becoming a middle ground between the two perceived cultures of the Internet, user content within e-eommerce represents a new direction for the culture as a whole exploiting the best of each while allowing both to continue successfully. The juncture of commerce and community allows for the collectivist, cooperative spirit of the

33

Internet not only to exist alongside e-commerce, but also provides a base in which both

can flourish.

CHAPTER VI

METHODOLOGY

The general understanding the effectiveness of user content within e-commerce has led companies to the current state, where user content has been a helpful, prosperous addition to the field. However, understanding the issues at work can only take the field so far. In order for new opportunities to be recognized and taken advantage of, new data must be collected to alert Web designers and business strategists alike to developing trends in user expectations and e-commerce as a whole. The following research, from a limited sample, was conducted to facilitate the transition to the future of user generated content in e-commerce, and hopefully to point the way to new opportunities in this field. Primary research for determining the effectiveness of utilizing user generated content within e-commerce Web sites was collected through a paper survey given to approximately 175 people, of which approximately 125 were returned. In order to create a larger number of responses so that a more accurate investigation of the dat7a could be reached, an online survey was also created. This survey was e-mailed directly to approximately 60 people, who, in turn, e-mailed it to others, yielding approximately 65 responses. Survey responses collected after 20 March, 2000 were disregarded.

35

Survey participants were given the option of remaining anonymous, while they were also offered an option of including personal contact information when they were willing to be contacted for in-depth interviews. Ten such interviews were conducted with people from this group, in person when possible, and by phone when necessary. The information gathered through these two methods is presented in the following chapters to demonstrate the actual effects product reviews have on customer loyalties. Little attention was given to the specific demographic profile of the surveyed group. Rather, as each participant was an Internet user, it was assumed that the demographic profile should roughly replicate the profile of the meta-category of Internet users, with a more focused lens on the sub-group of users who have used the Internet to make purchases. One expected deviation from the norm was a higher incidence of online purchasing, due to the subject of the survey. Approximately seventy surveys were distributed in MGT 4056/6056: Electronic Commerce at the Georgia Institute of Technology during the Spring Semester of 2000. This class was comprised of both graduate and undergraduate students of mixed racial and economic backgrounds. The course "examine[s] the business and technical issues related to electronic applications, such as the Internet, WWW, EDI, and electronic linkages with trading partners" (http://www.oscarweb.qatech.edu/fall/catalog/MG T/6056.html). The remaining fifty five paper survey responses came from a variety of sources, including professionals, retired professionals and students across the country as well other Georgia Tech students,

36

The online survey was able to represent a more geographically comprehensive sample of the country. Few international responses were collected from either source. The survey had eighteen questions2, which focused on the habits and behaviors of the respondents as they made e-commerce purchases, and surfaced the effect of user generated content on these purchases. Comparisons to respondents' behavior in other (offline) commerce situations were addressed as a contrast to their online behavior. One issue not dealt with in the survey is the issue of price. Although cost of goods is certainly a concern for most (if not all) e-commerce users, price can often be a more complicated issue than a simple survey can address. As a result, the issue of price was reserved for the interview. While each interview took its own course, a standard list of questions formed the basis of each3. Like the survey, these questions sought to discover the issues underlying the behaviors of e-commerce users as they relate to the issue of product reviews. Closer attention was paid during these interviews to unearth discrepancies between what the users' perceptions of their actions with their actions in actual practice. The role price plays in purchasing decisions was also considered in these interviews. In order to generate more relevant questions, interviewed subjects were asked specific questions about online purchasing, and then were asked to elaborate from that example. While in most cases the specific and general complimented one another, there were some incidents where the two were incongruent. Interviewees were given as much

2 3

A copy of the survey has been included in Appendix A. A copy of standardized interview questions can be found in Appendix B.

37

freedom in answering the questions as possible, and were encouraged not to limit themselves to current constraints when considering their ideal solutions for problems.

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CHAPTER VII

RESULTS

While many of the results of the survey will be listed, not all will be highlighted as direct results of the survey, as they are more enlightening when viewed in comparison with the results of other answers from the survey. Ninety percent of the participants had made at least one online purchase, which is significantly higher than the statistics collected by most analysts. This increased percentage is most likely a matter of self selection, as several people invited to participate in the survey declined because they felt that they did not have enough experience with ecommerce to offer valid responses. Although some effort was made to encourage these people to participate despite their inexperience, most demurred. While some participants who had not made purchases did answer some of their other questions, this group was not large enough to appear a valid sample. As a result, for this analysis, those participants who had not purchased a product online are not considered for inclusion. Of the participants, eight percent had made only one Internet purchase, while fifty eight percent make purchases occasionally or sometimes, and twenty five percent see themselves as regular online purchasers. When compared with the results of the GVU's

39

Tenth WWW User Survey (http://www.gvu.gatech.edu/gvu/user_surveys/survey-199810/graphs/shopping/q 124.htm) (see figure 7.1), frequency of shopping was similar, though not identical, largely due to a difference in measurement of frequency.

Purchase Frequency:
GVU v. Mahon Survey

Newer

Once

Occasionally

Regularly

] Ma h on S u rvey Re s u Its . Poly. (Gvu Survey Res ults)

Gvu S u rvey Res u Its _ _ Poly. (Mahon Survey Res ults)

FIGURE 7.1

The GVU's concentration on a more exact determination of actual shopping frequency shows a distinct decline as the spans of time between shopping decreases, while the Mahon survey shows a far more gradual decline. Although the inexact terms in the Mahon survey offer a less precise picture of consumer's actual shopping behavior, the purpose of this question was to establish the participant's perceptions of her Internet shoppmg frequency.

40

In addition to their participation in e-eommerce, surveyed persons were also asked about their connection to more traditional online communities. Sixty seven percent had never participated in one of these communities. Of the thirty four percent who had, their visiting frequency was unremarkable, with seventeen percent visiting only once, seven percent returning occasionally, and eleven percent considering themselves regular participants in an online community. In looking at their loyalty to e-commerce Web sites, participants indicated that they are very loyal to the sites they purchase from, indicating that they are at least half as likely to return to a site approximately ninety three percent of the time. The most common response was that people usually return to the same site (60%), with twenty eight percent indicating that they revisit the same sites. Responses on either extreme were far less infrequent, with six percent saying they always return to the same site, and only three percent each saying that they usually or always go to a different site to make their purchases. The frequency of online shopping had little effect on an individual's likelihood to return to a site (see figure 7.2), although those people who said they had only bought one product online were more likely than the others to say that they always went to the same site, or always purchased through different sites. Interestingly, those who made regular online purchases were three percent more likely than occasional online shoppers to identify themselves as usually shopping at the same sites, but no regular shopper said they always used the same sites, while seven percent of the occasional shoppers did.

41

Site Loyalty v. Sopping Frequenc (by percentage)

60/'
Percentage of Respondents 40 20

oA
nOccassionally IjOnce |dj Regularly I I Overall

Ahways Same

Usuaiy 1 About ' Usually j Always Same Half Different Different

9 20 0 7

53 30 55 52

33 30 31 32

3 0 10 5

2 20 3 4

FIGURE 7.2

Happiness and comfort with the site were marked as the most important factors that play into the decision to return to a regularly used e-eornmerce Web site, at rates of fifty three and forty percent, respectively. Less common factors involved with returning to a Web site were indicated to be a feeling of belonging (15%) and trust (13%). More specifically, seventy percent indicated that customer service was a very important factor when deciding whether to return to an online store. Brand name recognition (26%) and security (29%) were also cited as important factors in this decision. Few people indicated that the ability to share their opinions with other customers (1%), or interaction with other customers (9%) was important. Furthermore, participants were asked to rank eight items in regards to their importance in using an e-commerce Web site, with one being the most important item and eight being the least important. While one answer was clearly less important than the

42

others (the ability to share your own opinion with other customers, earning a ranking of 6.48), the other items were much more closely grouped together, making an accurate ranking more difficult. Rather, these answers did form two clear priority groups, a higher priority group and a lower priority group, that are somewhat enlightening. The higher priority comprised speed of service, security, product descriptions and customer service, each carrying a ranking of approximately three. The two members of the lower group each earned a ranking of approximately five, and included reviews of products from professionals and reviews from other customers. Approximately seventy six percent of the participants research (see figure 7.3) the products they purchase from an e-commerce Web site always (38%) or usually (38%). Of this group, eighty eight percent4 research products online, with ten percent occurring within the site where the purchase is made, while only thirty eight percent research offline, with eighteen percent occurring within a store. In contrast, only twenty four percent of the surveyed group researched the products they purchased online less than half the time (11% researched half the time, 8% usually didn't research, and 2% never research their purchases). Although forty four percent of this research is still done online (11% within the online store), it is more likely that research will be done offline (46% offline, with 22% within the store).

Survey participants were able to check more than one response, if applicable. As a result, some results total more than 100%.

43

Where Purchasers Research the Products They Buy Online

offrwi
Overall D Less Than Half Time Researchers M o r e ThanHalf Time Researchers 40 48 37

Cflli:-

T"j!ore

Online 115 81 143 1

Online at Site 24 20 18

44 40
33

[ 1
|

FIGURE 7.3

When doing research people are most likely to research computer products (50%), while least likely to research toys (7%). Electronics were the second most likely group of items to be researched at forty four percent, followed by books (32%) and CDs or videos at thirty two percent. An available "other" category was marked twenty eight percent of the time, notations that travel, furniture, automobiles and sporting goods were researched often. In addition to knowing that these participants were likely to conduct research when making an online purchase, it was also important to discover the sources of the information which framed their decisions (see figure 7.4), In both online and offline situations, friends recommendations and experiences with the product were most likely to have an impact. According to the results, friends were more likely to have an impact

44

offline (67%) than online (41%). In contrast, professional reviews carried slightly more import online (38%) than offline (30%). Overall, previous experience with the brand in question was indicated as the least likely determining factor in making a purchase, with thirty five percent indicating it was a factor in offline research, and thirty percent in online research.

What Forms of Research have the Most Impact on Purchasing Decisions

B Professional Renews g Previous Experience

@ n

Friends Recommendations Other

FIGURE 7.4

While a good deal of the survey approached the idea of other customers' influence on a particular purchase obliquely, only two questions directly addressed the question. Responses to these questions a showed that sixty seven percent believed the ability to read others' opinions was important to them, while only thirty six percent indicated that leaving their own opinion was important.

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CHAPTER VIII

INTERVIEW RESULTS

Interview participants were chosen from those people who had indicate a willingness to participate at the time of the interview. Approximately four weeks after the surveys were administered, this group of people was contacted by e-mail and questioned again as to their willingness to be interviewed. They were informed that the interview would last between one half and one full hour and would deal with e-commerce. The email requested that the recipients respond with a convenient time for them to be interviewed. As a starting point for the interviews, participants were asked to describe their methods when they make an online purchase. While helping to put the interviewees at ease, this question also demonstrated how directed the individual typically is when making an online purchase. Although each of the subjects had some idea of what they wanted to buy when they went online, they described a varying degree of specificity at the beginning of their process. Some know the exact item they want to purchase, and narrow their search from this point by looking at a number of Web sites, or by using a Web site designed to

46

compare prices and availability. Only one person described his process at this point as being concerned with finding the lowest price saying, "there are certain sites that, like if a buddy of mine were wanting to buy something online, I would not give him some 'fly by night' site, whereas, I myself might purchase from a less well known site;" the others who fell into this category select the best price from a small number of Web sites they are comfortable with, then choose the best price from that very small list. One person even commented that the she often chose the best Web site over the best price, because it made her feel more confident about the purchase. The other main group begins with an idea of what they want to buy, but have not narrowed their idea to a single item when they get to the Web. This group described a more research intensive process for their purchases, but follow avenues similar to the previous group when it is time to make the specific purchase. One individual commented that the majority of purchases he makes online come after offline research. He described his process of buying running sneakers: I go to a few different stores to try on some shoes that I have liked in the past, then I go online and find out more details. I don't make spontaneous purchases, I buy goods and services that [I] have actually seen and felt before we actually buy them online. He commented that although he typically looked at several different sites to compare prices and information, he almost always went back to specific sites even if that he wanted was more expensive on those sites. In discussing this question, the issue of price invariably surfaced, so it became an ideal time to talk about this issue as well. While survey participants had often written

47

comments about price being the most important thing, each of the interviewed people found at least two other factors with which they balanced price. Most commonly, these included reliability, consistency, brand name recognition, ease of use and trust, factors that were also shown to be important in the survey. One respondent claimed that he, "[doesn't] go to sites that don't already have value-added in it, if its just a browser site with a picture, it doesn't interest me. I want to know: does it mesh with who I am" before taking price into consideration. Another commented that she considered design in her decision, stating, "if the Web site is poorly designed, I usually give up and don't order from there. If its not easy, then I don't bother with them because I feel like they are not organized very well, and it makes me suspicious," a sentiment which was echoed through comments made by others who were interviewed. While it is clear that price certainly factors into the decision process when these people are preparing to make an online purchase, at no point does it become the sole determining factor. Overall, it seemed that the most important issue leveraged against price was customer service. For some, this presented itself in a straightforward manner, as one male explained, "returns are pretty key to my Internet buying strategy, so I need to know if I can, and how easy it will be" before he was willing to make the purchase. Another belied the lack of service he was accustomed to by commenting, "if a site really took the time to really have some personal attention. Stuff like that you really remember, if someone takes the time to really help you." Others described customer service in more general terms, pointing to helpful policies for delayed or incomplete shipments and assistance within the site as service concerns often left unmet in e-cornmerce. One

48

extreme example of poor customer service included an inability to remove items from a shopping basket once they were selected. The choices available to the customer in that instance were either empty the basket and start over, or call the company's customer call center and ask them to remove the item. Either option left the customer feeling less than important to the company. Of the interviewed group, only one person had any trouble recalling a situation during a purchase when he experienced a problem that would have been solved more easily in an offline environment. The others could immediately describe a time when they had had a problem, most often relating to a lack of information. Each had anticipated that, occasionally, desired information would be lacking online, but expected a quick and easy way to elicit that information from the company while remaining online. But in some of these cases, there was not even a way to e-mail the company to request the information, while in others, the e-mail was simply not answered. In most of these incidents, the person left the site without making the intended purchase. In discussing ways to improve this system, most described a desire to interact with company employees online. One individual described his process of trying to elicit the information important to him: well, I've tried the FAQ's, and it never seems like my question is frequently asked. E-mail is what I was looking for... the ideal thing would be to have somebody right around and talk to them, but that seems almost an impossibility... but you would probably have to wait there like you wait on the phone. But that would be ideal. It would be the best customer service you could have.

49

Another person concurred: It strikes me as an ideal situation for an instant message system, where you would have a simple button that you could IM somebody and the answer would come right back to you so you wouldn't even have to leave the form. If there had been a live person there, or some sort of live interaction, that would have been a lot more fruitful. Most participants, however considered this type of service an impossibility, although many mentioned that It would be nice to have someone from the company online at all times waiting to answer their questions. Reasons for dismissing the idea included the cost of the service to the company, as well as the implausibility that such an implementation would be properly staffed to be effective and have reasonable wait times. From this point, the interview turned to a discussion about the ways in which users can currently add to the content of the site. Each of the participants declared they have read at least some peer reviews during their shopping excursions, and each said that the reviews had at least once affected their decision about a product. Several also suggested that they had voluntarily participated in at least one other form of user content within an e-commerce site. Those who had not participated in other forms disclosed that they were aware of their existence, and had considered participating, but chose not to, typically as a result of time constraints. A number of the interviewees reflected that the reviews themselves were a factor in going to a particular site. In speaking of discussion boards, one individual commented, "if the reviews are related to something I am doing professionally, or something that is a hobby, then the content becomes a real driver... I will often go to what they are selling

50

because there is content," indicating that the user generated content motivated her to return to the site regularly. The addition of discussion boards to a current site was suggested by one individual as a way of making him more loyal to the site. He described, "that would make it sticky to me because it is adding value to the transaction of 'I want to buy [x]' into, 'I want buy [x]' and lets see what else is going on,'" despite the fact the he considered himself to be relatively loyal to the site already because of the incorporation of peer reviews into the site. Another person commented: one of my favorite things is reading other people's reviews. It's a major factor if a lot of people rave about something, and I even like the negative reviews, because they tell me something important. They give me a better idea of what the downside is, and you can always balance it out to decide if you would like it then. She continued, describing that she felt very loyal to the company that offered her these peer reviews, elaborating that she only shopped with them as opposed to their competition and that going elsewhere for a better price would make her feel guilty because this service helped her so much. While these individuals were very enthusiastic about user generated content, others were more ambivalent in their descriptions of the effect it had on them. They found the customer reviews helpful when they were dealing with an unfamiliar product or subject matter, but did not see them as overly helpful when making more purchases they were more accustomed to making. These participants did generally agree, however, that when they were making these alien purchases, peer reviews were one reason they chose the site from which they purchased.

51

All participants agreed that having a place for customers to add their words to the site, whether through peer reviews, discussion boards or online chats, made the site more human. One person commented that he generally felt that shopping online was a very cold and solitary activity, going on to comment that this type of content, "relievejs] any bother I have about have about not being able to talk to people. Sometimes even peer reviews are enough to make me think that other people... it gives it more human appeal," which he suggested often made him more willing to make purchases. When asked whether professionals or peers had more influence over their purchasing decisions, the contributors stated that each played important, but distinct, roles. While professional reviews were very helpM in narrowing a decision down to only a few items, customer reviews were more influential in the smaller field. One individual suggested a reason for this difference in describing the end part of her searches, "I still read them both, but the professionals, I don't know, they don't mean that much to me at that point. I like the broad consensus of what different people think. The [professional] reviewer might be good, but they are only one person." Each of the interviewees stated that the ability to compare customer reviews with one another was something that was important to them. Due to the extensive comparisons involved with customer reviews, each person interviewed was asked how she decides which information to pay attention to, and which to disregard. For the most part, the opinions of people who seem similar to themselves was ranked as very important. Reliability and consistency were also listed as important factors in determining relevance. Interviewees maintained that persons who posted to the

52

site regularity demonstrated a commitment to the site, and could therefore be trusted. At the same time, past performance was also considered important. One user suggested an almost quid pro quo attitude when assessing information: Past history of the person, reliability, something that I can take a look at. If it's a type running shoe that I like, and there was someone who said all bunch of good things about them that I ended up liking, then the next time I saw them staying something good about a shoe, I would be more likely to buy it. According to these participants, the impression of persistence when combined with a history of similar tastes can be a powerful indicator that a particular piece of information, or a particular member should be seriously considered when making a purchase. One interesting comment that resonated throughout the interviewed group was that the more moderate reviews carried the greatest perception of reliability. One respondent commented, "its sort of like the bell curve, you know, you slice away the really negative ones and maybe the really rave ones," in order to find the ones most likely to be relevant to her. This is especially interesting when compared with this group's likelihood to leave a review when their experience with it was not exceptional. The issue of anonymity within the content was also an issue for some of the people interviewed. One of the interviewees demonstrated the importance of knowing who is leaving a message: so many people have good experiences, so many people have bad experiences, so many people can give you little tips and tricks, and it's a great thing to have that, because I can even see who it is and write to them, and even ask them to elaborate further. So that way you really are tied to the other people, and usually they write right back. Everyone *

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helps everyone in that kind of environment, because they feel like its all the users together. For him, anonymous additions take away from the community feel of the content because it constrains further contact users. Another participant offered another reason anonymous posts could be considered problematic, when she asserted that she, "[doesn't] trust reviews as much online because of the anonymity," continuing to describe her reason, "I have a friend who had written a book that was being sold on Amazon, and she had all of her friends write reviews for it, and the other authors are people too. They also have friends," foregrounding the important issue of responsibility for the quality and reliability of user generated content. For the most part, each of the participants believed that company's should be held responsible for filtering all customer comments posted to the site for profanity and, interestingly, grammar concerns. The majority of these individuals expressed an expectation that the company shield its users from comments that, as one individual phrased, "wouldn't be G-rated," as the site owner cannot filter who will be reading the information. In addition, some editing from content was universally expected, as the areas for customer content, "shouldn't be just a blackboard where anybody can write anything they want and [the company] doesn't look at it. They don't have to take things out, but it should make sense, and they should make sure that its keeping with its purpose," lest users' comments become page clutter. Overall, these consumers agreed upon a level of intervention that would make the comments a benefit, rather than a detriment, to their shopping experience.

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At the same time, however, there was less consensus regarding how much editing a company could do. One individual held tightly to the notion of caveat emptor in regards to protecting the customer from reviews that might contain inaccurate or misleading information, "since you sign your e-mail name, its your opinion, its not [the company's]. The purchaser still needs to make the conscious decision to buy something. So it's the purchaser's responsibility to do the research," as opposed to the company's. While maintaining that the site had no responsibility to protect its customers, this individual also defended the company's right to present only those comments it chose to present: they have the right [to block some views], since it is their site, but they may lose something as a source. If there's a Web site that wants to push Nike apparel, and will edit out anything that says 'Reebok is good' they will lose credibility because it is slanted, and the reader needs to be aware, wait a second, there is a particular slant here, and why is that? Generally, however, this group expressed an expectation that the company should not edit in this manner: they pointed to an expectation of company objectivity when it came to comments. Several of the interviewees interpreted customer content as having an inherent honesty, where interference by the company distorted the overall purpose of having the comments there. One person explained, "it is supposed to appear as an open thing where people can input anything they wanted to, then its not cool to be weeding things out when they [don't compliment the product]. I don't think that's right," adding that one of the things he liked most about reading the comments is that he felt he could trust what they said. To a certain extent, however, some of these people perceived removing certain

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types of negative comments as a right, as one individual clarified, "if they're going to do it, then I don't think they should limit what people are going to say... unless its some blanket negativity that can't be helpful, like 'I hate Sony' rather than 'this screen flickers'." While the customers' right to express their honest opinions is explained as more important than the company's right to censor their customers, these individuals do see the company as having some rights when it comes to shaping the comments they include. Not surprisingly, then, many customers see the inclusion of negative comments as proof of the company's honor in regards to the comments, When discussing a particularly condemnatory comment about a product on a Web site, one woman considered the choices the company had in allowing it to be posted to the site: almost think that they should have the right to not print it, but then again, I'm glad that they did print it... [it made me[ respect them more for being honest... they had more integrity, and the other reviews had more integrity because I knew that they weren't just printing the positive ones. This particular person admitted she felt "bad" that it did get posted because it meant that many people would not consider buying the product, even though the review might not be completely accurate. Others echoed her satisfaction in seeing comments that take away from the product, especially when they exist in combination with more flattering comments. As the survey indicated that people perceived reading customer comments as important, but did not consider leaving their own comments as important, participants in the interview were asked about their own participation in commenting. They agreed that

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leaving their own comments was not as important to them, explaining , "I'm not getting anything by sharing my experiences with them, but I am getting something by them sharing their experiences with me." While a small number of the interviewed participants had left comments on an ecommerce Web site, most had not. Several of the latter group said they had almost left a comment on at least one occasion, but had decided against is before they finished. Reasons for stopping included the amount of time involved in leaving the comment, confusion met during the process, and the level of complexity involved. One user started the process out of sense of obligation to the site and its other users, but got frustrated after being prompted to fill out three screens of information before seeing the comment form. Interestingly, several participants commented that an exceptional experience with a product would make them more likely to leave a comment about the product. One individual explained her reasoning, "I can't see myself taking the time to say, "yeah, it was ok, it did what it said it would do" because there doesn't seem to be much point in that," as she believed that other customers would not be interested in reading that the product met her expectations. In contrast, however, most members of the interviewed group suggested that very negative or very positive comments tend to influence them less than more moderate ones. Few participants listed other possible motivators to submit comments. One woman did notice that she felt more inclined to comment when there were only a few reviews for a product, because she felt as though what she had to say would make a difference. In her view, as the number of comments increased, the value of her

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comments, or any one customers' comments, decreased. At the same time, she saw additions after a certain point as more distracting than helpful. Another individual saw the reviews as something so valuable to later customers that he believed the company should reward them for his contributions, "they should give me something, some sort of incentive... a discount or something. That seems like a good way to get it started, anyway... tell people that they will get a discount for reliable, honest reviews" rather than simply providing the space for it. Supporting this argument, all members of the survey said they liked seeing other customers' comments even when they didn't read them because they reminded the users that other people had been to the site. One expert user commented that the solitary nature of shopping online is something he has still not gotten used to. Seeing other customers' comments within the sites, however, "relieve[s] any bother I have about have about not being able to talk to people ... sometimes even peer reviews are enough to make me... to make me think that other people... it gives it more human appeal," continuing to say that his higher comfort level often led to more purchases within those sites. Finally, interviewees were asked if having customer generated content incorporated within an e-commerce Web site made them more likely to return. Each of the participants said they would be more likely to return to a site who, "valued its customers enough to put their thoughts next to [the company's] own," typically because it made them feel like they were more important than other sites. In addition, ten participants mentioned that customer comments made them less likely to switch to another Web site when they were ready to make another purchase. One individual

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explained, "the information...while it costs nothing to manufacture, actually has worth, and I am willing to pay more for that worth." Although two people said that they would still go elsewhere if there were a lower price on another Web site, this was certainly a minority point of view.

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CHAPTER IX

RECOMMEDATIONS

Both the survey and interview results indicated that the public actively seeks opportunities to interact with others online. Interestingly, they are fastidious in choosing the interactions they participate in. They express reluctance when the opportunities for interaction are too obvious, but become frustrated when the community is hidden from view. While the medium between these extremes will vary for individual companies, integrating community into the site seamlessly, both in form and function, is a necessity if user content is going to benefit the companyLike their seemingly conflicted attitude regarding the placement of opportunities for user generated content, the enthusiasm with which the public greets customer comments within e-commerce contradicts the Internet's boast of more streamlined, quicker transactions. User generated comments slow the shopping because they interfere with the purchase transaction. Rather than being perceived as a negative, however, this interruption becomes a welcome one which shoppers deliberately seek out when participating in electronic commerce. Customers are willing to spend time to learn more about other customer's thoughts and opinions about the products they intend to purchase

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because they believe they are saving time by consolidating their research and purchase functions. When the additional time it takes to read other customer's comments is balanced with the general perception that the Internet can be a barren place that can leave people depressed and lonely5, it makes sense that people would appreciate anything that would humanize the face of electronic commerce. In this way, customer comments serve a role beyond informing the customer: they provide the Web site with a perceived ambience and character. The comment's persistence over time can transform an electronic space with aspirations of interactivity into a person centered, responsive place that happens to exist within a computer. Although the distinction is highly subjective and largely perceptual, to customers at a Web site, it can mean the difference between making an individual purchase and developing a relationship that will span many purchases. Including the customer in the company by supporting methods of user generated content is certainly a step towards making this transformation. Finding the best ways to do this for any particular process, however, may not be as simple as it seems. Rather than adding whichever forms of user content may seem the easiest or most cutting edge at the moment, there are some guidelines companies would be wise to follow.

As was misinterpreted from the results of the 1998 HomeNet Study, "Internet Paradox A Social Technology That Reduces Social Involvement and Psychological Well-Being? " (http://www.apa.oru/iournals/amp/amp5391017.html), and subsequently globally reported in most major news sources.

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These guidelines follow, and fall into three main categories: a) Planning for user generated content b) Establishing user generated content c) Maintaining user generated content Rather than describing a static process that a company can progress through at a single point in time, these guidelines are intended to arrange a dynamic process that will propel the company in a direction of growth and positive customer relations.

PLANNING FOR USER GENERATED CONTENT

1. In the best cases, planning for user generated content within a Web site must begin before the decision to incorporate it. If at all possible, find people who can consider the issue objectively. While this may seem a rather academic consideration, several Web sites have been hurt by poor planning of user generated content. In order to protect a company against this possibility, it is essential to ensure that all decisions to incorporate user generated content have been arrived at after an unprejudiced deliberation of the facts. While mistakes caused by neglecting this step can be fixed, they are generally more costly and complicated than if the process had been approached more levelheadedly. The following steps in the planning phase of user generated content flow from this initial principle.

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2. Define the goals of the company Web site as clearly as possible, and consider how these goals are currently being met, There is a possibility that the Web site is currently working at peak efficiency, and all customers are satisfied and want things to remain as they are. Giving users a way to influence the content of the Web site may confuse and detract from what already exists. A value-added feature only adds value when it does so for the customer. Interview participants noted that only relevant comments held value for them; others were viewed as clutter that made the purchase more difficult. They also agreed to an extension of this idea: when user content as a whole does not add value, it is clutter as a whole. Another possible outcome of a poor match of Web site goals and user content goals is that the community aspect of the site could become more important to the users than its commercial aspect. Consider the success of the success of the community areas of levi.com, which has recently ceased selling its merchandise online. Generally, user generated content appears to work better when it is a means to an end rather than an end in and of itself. In this manner, the user comments are more grounded in actual practice of the company and the site as a whole rather than being something that is haphazardly tacked on as an afterthought. In addition, something considered as a means rather than an end typically receives more attention and maintenance, which user content will necessitate.

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3. Consider the role of the customer in the company. Because user generated content is, by nature, highly customer oriented, it is important to consider the role of the customer within the company before moving forward. Companies who use their customers wisely are able to draw power from their customers thoughts and opinions because they understand that any information their customers are willing to give them can be used to strengthen the company overall. This includes the likelihood that some customers will use their ability to add content to the site as an opportunity to express negative opinions of the company or its products or services. If the company views the customer as something separate from itself, then it is unlikely that attempt to join the two will be successful.

4. Consider the current branding strategies of the company; determine what effect user generated content could have on the brand. As discussed earlier, user content can strengthen the brand by using the customer to help shape it. If the company does not begin with a clear understanding of its brand and its brand strategies, however, user content could hurt company efforts. While user content will an effect on the brand, the company must provide a core around which the customer can respond. Without that core, user content becomes flotsam within the Web site that competes with the branded image. Similarly, it is essential that the forms of user content offered compliment the promises inherent in the brand. For example, it would make sense for a company who promises the excellent customer support to offer the customer as many ways of

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interacting with the company as possible. Online chats for customer support and well organized bulletin boards would be a meaningful extension of the brand promise. In contrast, it would not be as logical for a company who suggests that it can operate invisibly in its customers' lives to incorporate user content on its site.

5. Consider the resources needed to maintain the content additions. The decision to incorporate user content into a Web site can be an expensive one, and continue over time. For example, the job of sorting through customer reviews needs to continue for however long these reviews are permitted on the site. Additional information collected by membership forms and databases must be evaluated and interpreted on a regular basis. Discussion boards and chat rooms need to be moderated and encouraged to thrive. If these functions are not maintained, the company will lose the benefits of incorporating these aspects of user generated content into their sites. Worse still, the content can become a liability as the balance between customer and company becomes skewed.

6. Don't expect miracles. User generated content can be a very powerful force within a Web site. It can bring new users to the site, and transform current users into members vested in the success of the company. But counting on an overwhelming and immediate transformation will almost certainly lead to disappointment.

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ESTABLISHING USER GENERATED CONTENT

1. Set specific goals for content. As with other business ventures, specific goals for user generated content must be established to ensure that it is functioning properly. Without these goals, restructuring the Web site to include user generated content is not very productive because there is no way for the company to know if it is beneficial at all. A mission statement for user content, whether included in the Web site, or reserved for staff members at the company office, can be a useful item to ensure adherence.

2. Decide which form(s) of content will be incorporated into the site. Some handy rules of thumb: Almost any company can find a way that preference matching would benefit the company. The key to successfully incorporating this feature into a Web site is ensuring that customers are provided with useful and timely information. While mass e-mails to a broad group of customers may be easy for a company to implement, customers often find this intrusive and unhelpful largely because these e-mails are too broad and ill timed. Customer reviews are generally best reserved for distributors of goods rather than manufacturers. While manufacturers may use peer reviews as an extremely open way to illicit feedback on their products, there is a real chance that negative comments can hurt the overall brand of the company. Distributors, on the other hand, can afford this type of negative comments because while the quality of the products they distribute

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may reflect on the brand, customers are less likely to abandon the company because of an individual product. Chat Rooms and Discussion Boards seem to work best with a homogenous population in relation to the products or services being sold. For example, purchasers of home improvement products may span a vast range of skill levels, intention and profession, in addition to more basic demographic diversity; facilitating a general conversation in this group could prove to be very difficult. However, when points of similarity among customers can be found in a diverse group, chat rooms and discussion boards can bring customers closer and inspire further sales. For example, hosting a chat about kitchen remodeling would narrow the field of participants but give each member of the chat something specific in common. Ranking Systems and Member Profiles work only in conjunction with other forms of user generated content. In general, member profiles should be separated from product pages of the site, as their function is more support than sale oriented. When a customer is unsure whether a comment they have read within the site is relevant to them, member profiles can be influential, as they will let that customer know how similar he is to the poster. Similarly, with a little creativity, ranking systems can be a key indicator regarding how influential a particular poster has been. In many sites, rank promotions have become a reason for customers to return to the site. When a high enough level has been reached, customers will be very reluctant to lose their status they have achieved by switching to an alternative site. With a little creativity, ranking systems can also be fitted to other

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functions within the site. For example, companies who encourage customers to indicate their preference can rank company suggestions of additional products according to closeness of the match.

3. Determine content policies, and make them clear and available to all customers. Limits, benefits, consequences and reasons for company editing are all key factors in developing a policy for user generated content. In addition to boundaries, it is important to develop consequences for crossing the boundaries as well. A formal constitution can be an effective tool with a dual purpose. While it sets limits and responsibilities for its members, it will also create a sense of culture for the site based on those obligations. Not only must the customers be aware of what is expected of them, but members of the company must know where the boundaries between customer and company are. Without a clear strategy of repercussion boundaries may be ignored, at serious detriment to the Web site. In addition to the static constitution, the site owner must also develop a way to amend the rules. As the membership grows, needs will change; as one interview participant explained, "when I first started looking, there was this one person who made lots of comments, and it was nice to see the same name over and over. But, after a while, it got really annoying, and I just wished he would stop commenting! I wish there had been some way to filter him out!" Without an established method for responding to customers' evolving expectations, the company could find themselves falling behind its

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customers' needs. At the same time, a completely unexpected situation could arise, and the company would not want to be bound by an outdated constitution.

4. Determine the best ways to get customers to participate. Jumpstarting customer generated content is important. The longer it takes for customers to begin adding their comments once they have the ability to do so, the more difficult it will become. A plan to minimize the time between going live and being live is essential to the success and longevity of the plan. A strategy to offer discount for participation for a limited amount of time may be a wise choice to speed content generation. The discrepancy between the number of people who want to read other customers' opinions and the number of people who want to leave their own should be a concern for online businesses. Perhaps, however, it need not be an urgent concern, as the existence of "lurkers6" within online communities have not have a negative impact on their success. In fact, there are many who consider the lurkers to perform an essential function within the community, as they provide an audience without creating more information to read.

People within online communities who return to the site often so that they can read others' posts and keep current on the happenings within the community, but rarely, if ever, post themselves.

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5. Re-design the Web site with the user content in mind. There is little worse than sites that cluttered with content that distracts from the goals of the site. There is a music site which does little to filter their customer reviews. It is not uncommon to see profanity filled comments that have little to do with the artist or the music supposedly being considered. Rather than being a help to customers. This content is a distraction that make their site difficult and unpleasant to use.

6. Determine how autonomous the customers will be able to be. If the company begins a discussion board, who will be able to start a new thread within the discussion? Who will be able to start a new category? Will only members who have achieved a certain rank be allowed to make these changes? The answers to these questions will determine how much control the customers have over the content the submit to the site. Members with little control over the space purported to be their own can become frustrated when they are restricted from doing things they believe they should be able to do. At the same time, one interviewed customer commented that he liked the fact that one site he visits does not allow members to create additional topics: "It makes me think about what I want to say, and focus it clearly to make sure it fits within one of the categories before I say it. It makes me feel better knowing that other people who are leaving their comments have had to think about them, too." Clearly defining how members can effect their space at the start of a venture will alleviate much confusion for all parties down the road.

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7. Determine what information customers will be required to provide in order to participate. Anonymity can have a profound effect the perception of user content within an commerce site. While some members may be reluctant to submit their opinions if they are held accountable for them by leaving their real name or e-mail address, many customers equate accountability with honesty. All interview participants agreed that knowing, on some level, who was leaving a comment made a difference in how they perceived that comment. Decisions regarding the level of self disclosure required to submit comments to the site will effect how the user generated comments develop. Member names and passwords are often a way to find balance between the privacy requirements and public obligations, and often satisfy customers' desires to know who is speaking. In addition to identity, companies need to decide if they will require users to submit other personal information that may benefit the company. For example, a company may be interested in collecting residence information to more closely determine the relationship between online sales and brick and mortar sales on a regional or local basis.

8. Determine how information will be kept current: if and how old information will be removed or archived. As several interview participants expressed concern over the age of comments they read, especially product reviews, it would be wise for a company establishing user

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content to consider how to handle this issue. The other side of the concern, that some members may want access to older information needs to be considered as well.

MAINTAINING USER GENERATED CONTENT

1. Review form and function of user content within the site to ensure consistency with changing customer and company needs. As a company and its customers grow, their needs may change. Ensure that the user content abilities and limitations change along with these needs. These changes may prompt the company to seek different information from its preference matching databases or membership forms. Or, perhaps the changes suggest that a change from chat rooms to discussion boards, or vice versa, would be fruitful. Similarly, reviews can help even when there are no significant changes within the company. Periodic review of goals set for content ensure that the current methods of embracing the customer are working. Early determinations that current methods are not working offer the company a better chance of minimizing losses, both in profits and in customers.

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2. Offer customers a way to contact the company directly. One benefit of user generated content is that the customers become more available to the company, they gain access to their thoughts, opinions and desires in regard to the company as a whole, its products and services, In return, the company must offer itself to the customer. Although the information the user is contributing will ideally be used to fulfill customer needs more efficiently than previously possible, there must always be room for the customer. Even if she never feels the need to contact the company, knowing that she can is essential to the symbiotic loop user content creates.

3. Pay attention. Just because user content has truly become a part of the Web site does not mean that it can be forgotten about. While the people submitting their comments and thoughts may appear to be happily doing so on their own, it is important to always remember that these people are the customers. As a result, they must have attention paid to them, and because the company has developed more points of contact between itself and the customer, it is responsible for equally raising the level of attention paid to them.

Overall, the best guidelines in regard to incorporating user generated content into a site are to use common sense, proceed slowly and follow up. As long as the company can follow these basic principles, most things should naturally fall into place.

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CHAPTER X

FUTURE RESEARCH

It will be important to see how the public's reaction to and participation in this type of online commerce community develops as electronic shopping claims higher percentages of overall sales. The Internet has already had a huge impact on the way Americans (and others) purchase the goods and services they use. It seems likely that this trend will continue, possibly to the point that in store sales lose their place of dominance within the commercial landscape. At the same time, advances in bandwidth issues offer more options when it comes to connecting users to one another. It will be interesting to see what effect these things will have on the way people shop, specifically in how customers interact one another and the business they patronize while they shop online. Similarly, as business to business commerce is becoming more influential, it will be interesting to see if there are any differences in the role of user generated content in this arena. While there are some obvious differences in the needs of businesses as opposed to individual consumers, the level of attention to customer needs seems to be ideal for business to business commerce. In fact, because this market is so much more

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profitable than the business to consumer market, it seems like an ideal place for vast expansion of the idea. One viewpoint absent from this research has been the view of the company, as no company wanted to participate directly. It is important to understand more clearly the impact user generated content has on companies, both individually and as a whole. Without this information, it is difficult to make definitive conjectures pertaining the actual success of user generated content.

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APPENDIX A

SURVEY

1. Have you ever made an online purchase? Yes No

2. How often do you make online purchases? Once 2-5 Purchases / Year 2-5 Purchases/ Month 2-5 Purchases/ Week

3. Have you ever participated in an online community? Yes No

4. With what sort of regularity? Once 2-5 Times / Year 2-5 Times/ Month 2-5 Times/ Week

5. When buying similar products, are you more likely to return to the same web site to make other purchases, or go to a variety of sites? Always Return To Usually The Same Site Its About Half And Usually A Different Always Different

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The Same Site

Half

Site

Sites

6. What factors play into this decision? Happiness Wiith The Previous Purchase(S) Comfort With The Site Trust In The Site Feeling Of Belonging Within The Site Other

7. Please rank the following in terms of their import when using e-commerce web sites Ability to share your own opinion with other customers Brand name recognition Customer service Product descriptions Reviews of products from other customers Reviews of products from professionals Security Speed of service

8. What factors contribute to your returning to an e-commerce web site? Ability To Brand Name Good Opinions Of Share Your Recognition Customer Other Security Own Opinion Service Customers With Other Customers 9. What do you see as the biggest problems with e-commerce as it exists today? Customer Service Separation From Other Customers Speed of Service Other

10. Bo you research products you purchase before buying them from an ecommerce web site?

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Always

Usually

About Half The Time

Usually Not

Never

11. Where do you do this research? _ Off Line _ Offline In A Store _ Online _ Online At The Site

12. What forms of research have the most impact on your decision when doing research offline? Professional Reviews Friends Recommendation s And Experiences With The Products Previous Experience With The Brand Other

13. What forms of research have the most impact on your decision when doing research online? Professional Reviews Friends Recommendation s And Experiences With The Products Previous Experience With The Brand Other

14. Do your methods of purchasing things differ when you are buying them for yourself and when you are buying something as a gift? Yes No

15. If your answer to question 10 was yes, how do your methods differ? Less Attention More Attention Other

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Others' Opinions

To Others' Opinions

16. When you have made an online purchase, do you want to be able to share your opinions about the products you purchase online with others who may buy the same products online? _Yes _No

17. When you are going to make an online purchase, do you want to see the opinions of other customers who have bought the product you are considering purchasing? Yes Optional Information: If you would be willing to be contacted for an interview about this subject, please include your name, email address and telephone number below*: Name: Email: Telephone: No

*Please note that including this information does not mean that you would be required to participate in an interview if at that time, you choose not to.

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APPENDIX B:

INTERVIEW QUESTIONS

1. Can you describe the process you go about when you buy something online? 2. Are there any online e-cornnierce sites you return to for reasons other than an intended sale? > Is there anywhere you go for online "browsing?" > Why do you go to those places and not others? 3. Have you ever run into trouble/ not understood something/ had a question about something on an e-commerce site? > What did you do? > Would it have been helpful to you to have had a way to get help in site? > What would have been the best way? 4. Do you currently feel like you are alone when you are "in" an online store? > Why or why not? > Would you change this?

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> Do you think that things like online chat, customer product reviews &c would change that? 5. Have you noticed opportunities for people to share their ideas/etc within ecommerce? > Have you participated in them? > Why or why not? > What did/would make you more likely to participate? 6. Would it be difficult for you to research a product on one web site and buy it on another? 7. When you look at another customer's review of a product, what do you look for? 8. How do you determine whether you can trust the reviewer, or are you concerned about that? 9. Do you think the web site has any responsibility when it comes to publishing reviews? 10. Are product reviews the best way to include customers in the site? 11. When it comes to reviews, are you more likely to trust a professional or another customer?

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12. In regards to the survey, many people say that price is really important, but also said they usually return to the same site when they make their purchases. > Which is more important to you, consistency or price? > What things do you balance price with? 13. ore people said that seeing other people's opinions of products was important than having the opportunity to voice their own (2:1). > What would make you more likely/willing to leave your opinion at a site? 14. Do you perceive a difference in how you interpret information online and offline? 15. Do/would you find it easier to "talk" to someone online about something you wanted to buy, or something else?

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WORKS CITED

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