THE CASE OF THE GIFFGAFF COMMUNITY EXPLORING THE DARK AND BRIGHT SIDES OF ONLINE CO-CREATION:

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EXPLORING THE DARK AND BRIGHT

SIDES OF ONLINE CO-CREATION:

THE

CASE

OF

THE

GIFFGAFF

COMMUNITY

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Exploring the dark and bright sides of

online co-creation: The case of the Giffgaff community

Dissertation submitted for the Double Degree

MSc International Business and Management,

University of Groningen

MSc Advanced International Business Management and Marketing,

Newcastle University

Junfeng Xue

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Confirmation

I confirm that this dissertation is on my own work and all sources are fully referenced and acknowledged.

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Acknowledgement

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Tables

Table 1.1 Research Objectives ... 11

Table 2.1 Typology of co-creating practices ... 14

Table 2.2 A summary of online community terminology... 18

Table 3.1 Data analysis processes ... 26

Table 5.1 Categorisation of members‘ postings ... 32

Table 5.2 Intersections between two categories of members‘ reactions. ... 33

Table 9.1 Managerial implications of each community role... 56

Figures

Fig. 2.1 Building blocks of interactions for co-creation of value ... 15

Fig. 4.1 Goodybag options in ―Goodbag Community Consultation‖ ... 30

Fig. 5.1 Characteristics of members‘ behaviours ... 37

Fig. 5.2 Roles of online community members ... 46

Abbreviations

NPD: New product development

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Abstract

Consumers today have become increasingly knowledgeable and innovative so that more and more companies try to involve customers in their business not only for marketing purposes but as part of the company‘s core strategy. The Web has cultivated a number of online communities where business can interact and create value with users at a lower cost than ever before. However, value creation in collaboration with members may also trigger dissatisfaction and oppositional reactions.

This study explores behaviours of online community members in joint value creating initiatives with a firm. Using netnography on the Giffgaff community, an online community created by the mobile virtual network, Giffgaff, the findings unfold three major behavioural characteristics of online community members: co-production; marketing and sales; and reciprocity. Through further investigation, the research reveals community roles under these three characteristics.

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1 Introduction

The traditional concept of a market is company-centred, whereby consumers were part of the value exchange but not part of the process of value creation (Prahalad & Ramaswamy, 2004). In recent years, with the power of search engines and social interactive platforms based on the Internet, consumers have become increasingly ―informed‖, ―connected‖, ―networked‖ and ―empowered‖, and also unprecedentedly savvy and cautious when confronted with various marketing tools and techniques introduced by companies (Prahalad & Ramaswamy, 2004; Ramaswamy, 2008; Nuttavuthisit, 2010).

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10 strengthening brand loyalty and gaining insights into the brand from the customer‘s perspective (IKEA); LEGOIdeas encourages consumers to contribute their ideas for new Lego models and chooses the most popular ones among customers as potential next new models (LEGOIdeas, 2014); Giffgaff, a mobile virtual network operator (MVNO), created the Giffgaff Community where members help shape the business by solving other members‘ problems, submitting their ideas, voting for new product decisions, etc. (Giffgaff, 2014).

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1.1 Research Objective

The general objective of this research is to explore behaviours of online community members when they co-create value in companies‘ initiatives and to extend the knowledge on both favourable and detrimental aspects of co-creation in an online community setting. The research will use the Giffgaff online community, a community affiliated with Giffgaff, a mobile virtual network operator (MVNO), as a subject to reveal certain characteristics of members‘ behaviours. In order to achieve this aim, a group of objectives has been identified (Table 1.1).

Objectives

1 To understand the customer co-creation concept.

2 To overview the existing knowledge of members‘ behaviours on online communities and their influences on the company. 3 To develop a suitable method and technique for this research. 4 To extend existing knowledge of members‘ behaviours on

online communities and their influences on the company. 5 To provide managerial implications for companies which

engage consumers in value co-creating activities in an online community.

Table 1.1 Research Objectives

1.2 Research Question

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12 characteristics of community members who exert negative influences on a company. To contribute more knowledge and fill this gap, this study will be conducted on the brand community of Giffgaff, due to its representativeness for online co-creation and the distinctive characteristics that qualify it as a suitable candidate for this research. The forthcoming research is subject to the main research question: How do behaviours of online community members influence business value co-creating activities? In order to support the main question, the following sub-questions are used:

1) What roles do online community members play in co-creating value with business?

2) What behaviours that online community members conduct may damage the company and what characteristics do they share?

1.3 Research Structure

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2 Literature Review

Value co-creation is a broad concept in the business field and it has several dimensions, such as ―employee/internal co-creation‖, ―customer/community co-creation‖ and ―partner/network co-creation‖ (Ramaswamy, 2009, p. 36; Kozinets, 2010); this dissertation, however, concentrates on ―customer/community co-creation‖. To better understand customer/community co-creation, co-production as a nested concept will be introduced. In addition, to avoid unnecessary complexity, this study focuses on the online customer as our main subject in this research, a group which has been growing more and more valuable in the last decade (Chan & Li, 2010; Habibia, Laroche & Richard, 2014). Literature in this area is related to online communities (Marchi, Giachetti & Gennaro, 2011; Noble et al., 2012; Brodie, Ilic, Juric & Hollebeek, 2013). Furthermore, it has been believed that value co-creation emerges in the process of consumer engagement within an online community (Brodie et al., 2013). The majority of the literature focuses on the benefits of customer co-creation; for example, it can improve a company‘s innovation process (Sawhney, Verona & Prandelli, 2005), establish relationships with existing or potential customers and increase loyalty (Füller, 2010), and create positive WOM (Kozinets, Wilner, Wojnicki & de Valck, 2010). Yet several articles also discuss the dark side of customer co-creation, such as opportunistic consumer behaviour (Ertimur & Venkatesh, 2010), loss of control of a consistent brand message (Noble et al., 2012), and lower customer satisfaction (Heidenreich et al., 2014).

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2.1 Co-creation and co-production

Although literature on co-creation is diverse and there are many different definitions, there is an extensive consensus that co-creation mainly refers to the collaborative activity between a firm and consumers that contributes to value co-creation (Etgar, 2008; Hoyer et al., 2010). Nuttavuthisit (2010) argues that the way consumers get involved in value co-creation can be categorised as participation and creation, and the purposes of consumers co-creating can be divided into two types: for self and for others, leading to a 2×2 typology of co-creating practices (Table 2.1).

Creation Participation

For others Creation-for-Others Participation-for-Others

For self Creation-for-Self Participation-for-Self

Table 2.1 Typology of co-creating practices. Source: Adapted from Nuttavuthisit (2010)

Prahalad and Ramaswamy (2004)believe that high quality value co-creation interactions are key for companies to gain a new source of competitive advantage. To facilitate the co-creation experience, Prahalad and Ramaswamy (2004) suggest the DART interaction framework between consumers and the firm, comprising the building blocks: dialogue,

access, risk-benefits and transparency (see Fig. 2.1). Dialogue is a key element, referring

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Fig.2.1 Building blocks of interactions for co-creation of value, Prahalad and

Ramaswamy (2004)

The relationship between co-creation and co-production is that they are both nested concepts of value (Lusch & Vargo, 2006). Co-production involves ―the participation in the creation of the core offering itself‖ and the value can be created through sharing innovative ideas, participating in designing or producing related products, while co-creation of value is more encompassing, indicating that ―value can only be created with and determined by the user in the consumption process and through use‖ (Lusch & Vargo, 2006, p. 284). Following this idea, Etgar (2008) further explained the meaning of co-production as the participation of consumers in the performance of the various activities in the production process, including ―intellectual work‖, ―resource aggregating and processing‖, and ―delivery and consumption‖, which comply with the three stages of NPD: idea generation and concepts, design and engineering, and test and launch in an online community, revealed by Füller et al. (2006). Furthermore, Etgar (2008) also elaborated the co-production processing model including five distinctly different stages that consumers will experience before engaging in co-production activities initiated by firms: (1) development of antecedent conditions, (2) development of motivations, (3) calculation of the co-production cost-benefits, (4) activation, (5) generation of outputs

Co-creation of Value

Transparency Access

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16 and evaluation of the results of the process. Ertimur and Venkatesh (2010, p. 259)add that, in co-production, instead of a formal working contract the consumer is bound by the ―social contract‖ with the organisation which refers to ―a basic understanding of what constitutes proper behaviour in the process of co-production‖.

2.2 Online communities and consumer engagement

2.2.1 Typology of Online communities

The term ‗virtual community‘ or ‗online communities‘ was first referred to by Internet pioneer Howard Rheingold (Rheingold, 1993, p. 5) as ―social aggregations that emerge from the Net when enough people carry on those public discussions long enough, with sufficient human feeling, to form webs of personal relationships in cyberspace.‖ In recent years, this term appeared in different forms in the relevant literature. The meanings of terms like ―virtual communities‖ (Chan & Li, 2010), ―online brand communities‖ (Noble

et al., 2012) and ―online innovation communities‖ (Gebauer et al., 2013) are similar or

interrelated in most of the research in this specific field.

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18 Terminology Definition/Characteristics Relevant references

Online community/Virtual community

Social aggregations that emerge from the Net when enough people carry on those public discussions long enough, with sufficient human feeling, to form webs of personal relationships in cyberspace Rheingold (1993) Chan and Li (2010) Spaulding (2010) Seraj (2012)

Healy and McDonagh (2013)

Online brand community

A specialised, non-geographically bound community, based on a structured set of social relationship among admirers of a brand

Muniz and O'Guinn (2001) Zaglia (2013)

Kuo and Feng (2013) Brodie et al. (2013)

Online innovation community

A virtual meeting place for innovative users to discuss opportunities and ideas for product improvement. Füller et al. (2006) Gebauer et al. (2013) Online marketer-created community A versatile brand-building tool for marketers so that they can create, customise, and distribute persuasive advertising messages for products and services

Lee et al. (2011)

Jung, Kim and Kim (2014)

Online consumer-created community

Lead other members to engage voluntarily in various community behaviours such as membership intention, recommendation, active participation, and so forth.

Lee et al. (2011) Jung et al. (2014)

Primary online community

Brand specific settings, including forums, discussion boards, and chat rooms.

Noble et al. (2012)

Extensive online community

Other vehicles, such as Facebook, Twitter, YouTube videos, and other emerging social networking platforms

Noble et al. (2012)

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2.2.2 Engagement in an online community

Brodie et al. (2013) believe that value co-creation can be reflected in the consumer engagement process within an online community. The definition of consumer/customer engagement is diverse. Vivek, Beatty and Morgan (2012, p. 133) define ―customer engagement‖ as ―the intensity of an individual‘s participation in and connection with an organization‘s offerings or organizational activities, which either the customer or the organization initiates‖, while recent business discourse depicts consumer engagement as a marketing tool to establish and improve consumer relationships (Brodie et al., 2013). Further, in the online environment, Mollen and Wilson (2010, p. 923) give ―online engagement‖ a definition of ―a cognitive and affective commitment to an active relationship with the brand as personified by the website or other computer-mediated entities designed to communicate brand value‖.

Brodie et al. (2013) argue that the consumer engagement process in an online community is highly interactive and experiential, comprising five sub-processes, including ―learning‖, ―sharing‖, ―advocating‖, ―socialising‖, ―co-developing‖, referring to learning knowledge, sharing information, contributing to product development, socialising and giving advice to other members. The consumer engagement process may lead to consumer loyalty and satisfaction, consumer empowerment, connection and emotional bonding, trust and commitment (Brodie et al., 2013). Online community engagement is identified as one of the community interaction characteristics by Kuo and Feng (2013), referring to positive responses to participation in community activities. Kuo and Feng (2013) find that community engagement is positively and significantly related to learning benefits, social benefits, self-esteem benefits and hedonic benefits for community members, and consequently generates community commitment and oppositional brand loyalty which triggers the negative attitude or even adversarial behaviours towards other competing brands.

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20 priorities – understanding customers and customer experience‖. Questions like ―how should engagement be conceptualised, defined, and measured?‖ and ―how do social media and other marketing activities create engagement?‖ (MSI, 2014, p.4) are highlighted in the ―Research Priorities‖.

2.3 Bright and dark sides of co-creation in an online community

2.3.1 When online community co-create value

In the online community setting, co-creation can generate many benefits for the firm engaged in it. Prior literature concurs with the notion that innovations generated through co-creation is more reflective of consumer needs (Hoyer et al., 2010; Ostrom et al., 2010). Füller et al. (2006) consider online communities as sources of innovation for NPD and outline a three stage NPD process: idea generation and concepts, design and engineering, and test and launch; within these stages, community members play the role of sources of ideas, co-creators (co-designers), and end-users and buyers, respectively. Further, Marchi et al. (2011) identified three characteristics that influence the level of innovativeness of online community members, which are: ―willingness to collaborate‖, possession of ―product knowledge‖ and ―strategic alignment with the brand identity‖. To engage more consumers, many firms created online communities on different platforms, such as online forums, Facebook and Twitter.

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2.3.2 When things go wrong

Compared to the substantial literature addressing the bright side of co-creation via online communities, little is known about the negative influences that those communities could generate. However, there are many real business cases exemplifying how sometimes co-creative activities could go wrong. Kraft Foods held a contest to collect ideas for a new name for its popular spread Vegemite, well known to millions of Australians for decades, while the new name chosen caused a fierce protest from its customers (Vasek, 2009). Another example, SPAR Austria, one of the retail leaders in Austria, conducted a worldwide online design contest for shopping bags, ―SPAR Bag Design Contest‖, which resulted in community members complaining extensively and resisting the result of the contest by posting negative comments online (Gebauer et al., 2013). Probing into this case, Gebauer et al. (2013) considered members misbehaviours as ―dysfunctional customer behaviour‖ and identified co-creation experience, perceived fairness, satisfaction and sense of community as triggers that affect the negative and also positive reactions (e.g., Negative and positive WOM) of online innovation community members. The term ―dysfunctional customer behaviour‖ in related studies usually refers to ―behaviour by consumers within the exchange setting that deliberately violates the generally accepted norms of conduct in such situations‖ (Reynolds & Harris, 2009).

Another conception to explain negative consumer behaviours is opportunistic customer behaviour. Ertimur and Venkatesh (2010) identified two types of opportunistic customer behaviour, i.e., active and passive. While active opportunistic behaviour manifests in ―distorting information‖ and ―violating principles‖, passive opportunistic behaviour refers to ―withholding information‖, ―shirking‖, and ―evading obligations‖. In addition, the implications of the co-creation process, such as a certain level of firm transparency, ownership of intellectual property, an overload of information analysis, and dilution of control, may also undermine the well-being of the firm (Prahalad & Ramaswamy, 2004; Hoyer et al., 2010).

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22 conduct negative behaviours. Seraj (2012)believes that there are seven different types of social roles: seekers (looking for the information in the community), educators (sharing knowledge), challengers (questioning the provided information), governors (monitoring the contents and manners in the community), appraisers (praising others‘ involvements), players (entertaining others), innovators (bringing novelty to the community), generating intellectual value, cultural value and social value in an online community. Füller et al. (2006)found that, in NPD, community members can function as the source of ideas in idea and concepts generation; as co-creators in the designing and engineering of new product; and as end-users and buyers at the stage of new product testing and launching. In comparison, the literature rarely identifies and categorises the unfavourable reactions of the online community members.

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3 Research Methodology

This is an exploratory research into behaviours of the online community members in relation to companies‘ value co-creating initiatives. To meet objective 3 and answer the research question, netnography will be applied, a qualitative methodology adapting ethnographic research techniques to research on online communities (Kozinets, 2002; Kozinets, 2010). In recent years, netnography has been widely employed as the research method of studies related to customer co-creation in online communities (Noble et al., 2012; Brodie et al., 2013; Habibia et al., 2014), or at least as part of their research method (Chan & Li, 2010; Gebauer et al., 2013). Netnography as an online marketing research technique for providing consumer insight is preferred for our research as it builds upon online observations and participation in publically available forums in an unobtrusive and

naturalistic but still participatory manner (Kozinets, 2002; Kozinets, 2010; Seraj, 2012). There are four main procedures to conduct netnography: suitable online community and thread (i.e., a group of initial postings on a single topic) selection (called Entrée by Kozinets, 2002), data collection and analysis, data interpretation, and providing research ethics (Kozinets, 2002; Kozinets, 2010).

3.1 Online community selection

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24 familiarity with the chosen online community is essential because the first phase of netnography, community and thread selection, needs market researchers to know as much as possible about the forum, groups and the participants they are trying to understand. Some knowledge, such as group membership, market-oriented behaviours, interests, and the language of the online communities, should be obtained before the research (Kozinets, 2002; Kozinets, 2010).

Accordingly, several considerations prompted the selection of the Giffgaff community and the thread of Goodybag Community Consultation: first, the Giffgaff community is mainly designed for the user co-creation purpose so that it is highly relevant to the research topic. Up to 11th August 2014, Giffgaffers have submitted 12009 ideas, 535 of them having already been put into practice by Giffgaff and 24 being in the implementing process (Giffgaff, 2014). Second, in the Giffgaff community, the average response time for questions is within just three minutes and 95% of queries are answered within 60 minutes (Lithium). Thus, the Giffgaff community is highly active and interactive. Third, the number of Giffgaff community members is substantial and the chosen thread attracted 86,000 visitors (Giffgaff Community, 2014). Fourth, there is enough elaborate communication provided in the chosen thread for content analysis (i.e., 8700 comments in total). Finally, the author is familiar with the community since he has been one of the users of Giffgaff and the members of the Giffgaff community for more than half a year. Even though there are many other online communities that meet the conditions above, for example NikeTalk (where skilled Nike fans design basketball shoes), LEGOIdeas (where users submit ideas for new Lego models), etc., the Giffgaff community is a unique case since it is the core business strategy of Giffgaff instead of just a peripheral marketing strategy.

3.2 Data collection and interpretation

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25 ―particularistic ties‖ to the revelatory depth of online communications; thus some significant conclusion could be drawn from a relatively small amount of data if the content contains ―sufficient descriptive richness‖ and is interpreted with considerable ―analytic depth and insight‖ (Kozinets, 2002, p. 64). The data of the research will be collected from Giffgaff‘s online community forum. The researcher used NCapture for NVivo Google Chrome extension as a tool to collect data by capturing the website page. The postings were processed and stored in NVivo 10, a Computer Assisted Qualitative Data Analysis Software (CAQDAS), to deal with large amount of data (Kozinets, 2010). In this dissertation, the researcher used QSR NVivo 10 to analyse and interpret the data collected. Adapted from the qualitative data analytics processes of Miles and Huberman (1994, p. 9) and the computer saftwarre uses in qualitive research of Weitzman and Miles (1995, p. 5), the data analysis in this netnography research is shown below (Table 3.1).

Analytical processes

Main tasks

Coding

Using software to store data, affix code or categories to data, and connect relevant data segments to each other, forming groups and networks.

Noting

Writing reflective annotations or ‗memos‘ on the data as a source for further analysis.

Abstracting and Comparing

Performing content analysis, organising and sifting the data to identify similar phrases, shared sequences, relationships, and distinct differences; building the categorised codes into broader, more general and conceptual constructs or patterns; comparing the similarities and differences.

Generalising

Presenting the materials in a reduced, condensed, organised format, e.g., a matrix.

Theorizing

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26 from previous literature; creating diagrams or graphical maps that depict finding or theories.

Table 3.1 Data analysis processes. Source: Adapted from Miles and Huberman (1994, p.

9) qualitative data analytic processes and Weitzman and Miles (1995, p. 5) computer software uses in qualitative research.

The interpretation of the collected data needs to be ―trustworthy‖ in a way that every aspect of the ―communicative act‖ such as ―the act, type, and content of the posting; the medium‖ should be taken into consideration as they are related to observational data (Kozinets, 2002, p. 64). The quoted comments are corrected by another proof-reader due to existing unreadable grammatical errors.

3.3 Research ethics

Finally, ethical standards should be employed throughout netnography to ensure healthy results and to prevent any invasion of privacy (Kozinets, 2010). The researcher should reveal his/her identity and purpose to the community; be confidential with informants‘ personal information; and be aware of the private-versus-public medium issue (Kozinets, 2002).

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4 Giffgaff Community

When discussing co-creation in an online innovation community, the Giffgaff Community perhaps is one of the best cases for consideration. Giffgaff is a SIM-only pay-as-you-go (PAYG) mobile virtual network operator (MVNO) based in the United Kingdom. Part of the Telefónica O2 family, Giffgaff runs its service on the O2 network, though it is an entirely independent firm. Unlike the big mobile networks, Giffgaff really is a community-led MVNO. It keeps costs low by encouraging its customers/members, known as Giffgaffers, to help to grow and run part of the business, passing the savings on to them. The community has been shaping the company by solving problems from other members, introducing new users, helping to promote the company, or even helping to improve their product, e.g., ―Goodybag Community Consultation‖ in August, 2014. ―We have no call centre and all customer service is done by the online community. I don‘t know of another company like us.‖ stated Robbie Hearn, Giffgaff‘s Head of Member Experience (cited by Lithium). Giffgaff‘s business model is distinctive. Without retail stores, heavy advertising expenses, or massive calling centres, their business operates 100% online. In order to thank active community members for their contribution to Giffgaff, they are rewarded with virtual praise called ―kudos‖. As accumulated points, ―kudos‖ is not only a symbol of reputation in the community, but can also be used for payback. These points can be applied every month in the form of credit, a cash reward or donation to a charity chosen by members. There are two ways to get ―kudos‖. One way is to help Giffgaff grow by introducing other people to Giffgaff, e.g., order a SIM. Another way is to contribute to the community through helping to solve various problems encountered by Giffgaffers, coming up with ideas or making suggestions, etc. Until 11th August 2014, Giffgaffers have submitted 12009 ideas; 535 of them have already been implemented by Giffgaff and 24 are in the implementing process (Giffgaff, 2014).

4.1 Goodybag Community Consultation

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29 minutes and texts of monthly usage (Giffgaff.com, 2014). In August, 2014, Giffgaff decided to make some changes to their Goodybags. In order to follow their ―run by you‖ business concept, Giffgaff ran a Community Consultation over one and half week to ask Giffgaff users to vote for one of the three Goodybag options proposed by Giffgaff (Fig. 4.1). This consultation provided deep insight into behaviours of community members in value co-creating activities while it also involved members‘ complaints and protests since some members believed the change was just a way to raise the price and did not want it happen at all. Many members posted negative comments in the form of blaming Giffgaff for pursuing high profit violently and no longer being ‗run‘ by its users as they claimed at the beginning, indicating that they would not continue using Giffgaff if the change was made, to show their resistance. Both the positive and negative reactions this consultation caused provide insights into business-to-consumer interaction in an online community. The Goodybags Community Consultation was held on Giffgaff‘s community forum via a

thread (post). Every Giffgaff user was invited to participate in this consultation and vote

for one of the three new Goodybag options by just replying to this post with his or her choice. All posts were read and votes were collected by Giffgaff staff. During the voting, members were allowed to put their comments and interact with other members or Giffgaff staff. However, since many members were not satisfied with either of those options, Giffgaff made a compromise, namely that existing users of the 15 GBP Goodybag had the right to stick to the old plan instead of having to change to the new one. Moreover, the 20 GBP Goodybag is reduced to only 18 GBP until the end of March 2015.

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Fig. 4.1 Goodybag options in ―Goodbag Community Consultation‖.

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5 Empirical Findings

Once the head of community opened the thread for ―Goodybag Community Consultation‖ and presented the three new options that Giffgaff proposed to their community members, it aroused a fierce discussion and evoked dissatisfaction from the majority of members. Many members expressed their discontent about the decision to change the current Goodybag, in tones ranging from polite to angry. However, apart from this challenging behaviour from community members, positive reactions have also been identified. For example, many members replied to others‘ negative comments and tried to justify Giffgaff‘s decision; some members provided constructive opinions about modifying some options backed up with persuasive supporting evidences. The result of this consultation can be considered as a win-win situation where Giffgaff modified part of the options according to the voice of community members and overall consumer satisfaction increased.

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32 percentage of members and the percentage of references reflects the fact that members who interact with others on this thread tend to post repeatedly. The fact that the total percentages are more than 100% indicates that some members expressed multiple ―voices‖ in the same or different comment(s) that can be categorised differently. There are as many as 57 positive-interactive comments and 42 negative-proposing comments. Table 5.2 shows the intersections between two reactions of users. In addition, 50% of members participated in the voting, while others either refused to vote for any of the options or did not mention their choices. The developed categories enabled the researcher to refine the ―raw‖ data and inspired him to proceed with further in-depth analysis. The next two sub-sections present the further results of this research.

Table 5.1 Categorisation of members‘ postings

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33 Negative comments Positive comments Neutral comments Interactive comments Proposing comments Enquiring comments Negative comments 352 5 2 33 42 0 Positive comments 5 165 5 57 15 6 Neutral comments 2 5 76 0 8 5 Interactive comments 33 57 0 205 11 6 Proposing comments 42 15 8 11 179 6 Enquiring comments 0 6 5 6 6 50

Table 5.2 Intersections between two categories of members‘ reactions.

5.1 Members’ behaviours on the online community

The analysis and interpretation first revealed three major characteristics of members‘ behaviours on the Giffgaff community during the Goodybag Community Consultation:

co-production, marketing and sales, and reciprocity. In the following sections, empirical

evidence will be provided accordingly.

5.1.1 Co-production

Co-production indicates that consumers participate in one or more of the activities in the production process (Etgar, 2008). In Giffgaff‘s case, community members were invited to contribute their ideas and opinions to Giffgaff‘s new product (Goodybags). This process can also be considered as the NPD of a virtual community (Füller et al., 2006).

As most of the Giffgaff community members are also the direct customers of Giffgaff‘s mobile network, the participation of community members provides the initial market feedback and helps business to make decisions.

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34 Member 13 ―I like option 2 the best for a variety of reasons. Firstly, the goody bags should have increasing minutes for the increase in cost. Having to jump to 20 quid for more than 500 mins is a mistake in my eyes. Also, option 2 gets rid of the unsustainable unlimited data model.‖

Member 9 ―With wifi at home work bus train Starbucks etc etc etc pretty much all over & increasing, I find my data usage is decreasing. However, having more talk minutes would be brilliant & max / unlimited texts. It's a no brainer IMHO - Option 3 please‖

Member 529

Apart from just voting for the options that Giffgaff proposed, many members tried to give advice as part of the consultation activity or come up with other options that they considered better. They feel like an insider when they see their ideas and advice are taken on board by the company (Porter & Donthu, 2008).

―@gregg_b [notify the head of community] any chance of adding some updates to the OP [original post] mentioning some of the points you have already clarified, such as the fact this doesns't affect bags £10 or lower, and that at the moment it doesn't take into account 4G. It may help deal with some of the repeat questions coming up considering how long the thread has got and how difficult it is to keep up with some of the answers.‖

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35 This would put off people who don't require that much data but would need between 500 and 2000 minutes which is quite a large gap … The ultimate solution would be for members to be able to pic'n'mix minutes and GBs for their own goodybag's requirements but I suppose that's out of scope for this discussion.‖

Member 207

5.1.2 Marketing and sales

An online brand community is considered a valuable and efficient instrument for marketing and customer relationship management (Zaglia, 2013). The result indicates that some members voluntarily engaged in positive WOM. Since comments can be generated almost at no cost and can be spread both with and beyond the community, positive WOM may be much more powerful on online brand community.

―Hi, I prefer option 1 as this would give me enough tethering capacity to cancel my tescomobile contract for extra tethering. Well done Giff Gaff again for offering excellent value for money. Thank you for this opportunity to participate in this consultation.‖

Member 312

In addition, some members appreciated the chance to be involved in Giffgaff‘s business decision-making and expressed their sense of community (Gebauer et al., 2013).

―First of all I would like to say thank you for consulting us all in the first place; this is something no other company ever seems to do and is what I appreciate about giffgaff.‖

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36 things. In the final count I'm called a member and part of a community.‖

Member 1

5.1.3 Reciprocity

Chan and Li (2010, p. 1034) define reciprocity in an online community as ―voluntary and discretionary behaviours in terms of giving help to not only those who help the giver but also other members in the virtual community who need help and who would provide assistance on request‖. In this sense, community members can play the role of customer service, solving product related problems posed by other users. This phenomenon not only alleviates the company‘s customer service expenses, but it has been argued that it also generates quicker responses and thus generates customer loyalty (Spaulding, 2010).

One user posted their question about the utility of the new Goodybags at 2:04 am, and just 16 minutes later the question was answered by one of the other community members.

―[Member 188] wrote: But another question to arise from this is there's no mention of the £10 goodybag so is it staying the same or is giffgaff getting rid of it because if so I can see a lot of people having issues with that because like me that's what they buy for their kids.

It's staying the same. They wouldn't just get rid of it without saying anything.‖

Member 5 Another user asked a similar question. The member who answered the question in 4 minutes also provided personal opinions and extra information.

―[Member 50] wrote: Just to confirm would these be 4g or 3G goodybags ?

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37 can say that I'm sure that they have noticed how many more providers are supplying 4G connectivity for no extra cost. The limiting factor to my mind is the speed of O2's rollout, it seems to have nearly stalled at least in the Home Counties/East Anglia area with which I am most familiar.‖

Member 2 At this stage, the result of the study reveals three general characteristics of members‘ behaviours in value co-creation activities in online communities. They can be summarised as in the figure below (Fig. 5.1).

Fig.5.1 Characteristics of members‘ behaviours during the value co-creating activities

5.2 Roles of online community members in value co-creating

Section 5.1 discusses the results of the earlier study, introducing three general characteristics of online community members‘ behaviour when they participate in value co-creating activity with the company. So far, none of the negative reactions from community members are mentioned; however, the result of data analysis reveals that there are many members who conducted negative behaviours toward this consultation and Giffgaff. This section will deepen the investigation of behaviours of community members and discuss their roles in this consultation, exerting both positive and negative influences

Members’ behaviours on online community Co-production Contributing to product development

Marketing and sales

Building consumer engagement

Reciprocity

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38 on Giffgaff.

5.2.1 Community roles: co-production

In section 5.1, part of members‘ behaviours have been discussed. Due to further investigation into their behaviours, three roles are identified in members‘ participation of co-production with Giffgaff.

The innovators of the community contribute their ideas relating to the product development of company. They can be considered as a resource in the company‘s innovation for NPD (Füller et al., 2006; Füller & Matzler, 2007). The comment below represents a well-established idea, including detailed information and evidence supported by their work experience with one of Giffgaff‘s competitors.

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39 GiffGaff. However that being said o2 in the next few months are rolling out more packages to actually compete with GiffGaff and a lot of other networks out there.‖

Member 423 However, members who put a lot of effort into designing and refining the company‘s products are actually in the minority. The majority of members of Giffgaff community just provided a sketch of their opinions. The usefulness of consumers‘ ideas is very limited when the content is not clear and of low quality, even though customer innovation is the core part of co-production (Humphreys, 2010).

―I think we should should have an option for more data and less mins and texts also. I don't see anything‖

Member 18 ―Option 1 would be my vote, however with Three offering AYCE for £15 and tethering for £20 GG should ideally be trying to replicate this or something similar to the deals offered by Lyca.‖

Member 213 The customer feedback reflects the potential market for the company‘s next new product. This role is also one of the most important that community members played during the community consultation. Testing new products on community members by letting them vote on the options may reduce the market uncertainties. The examples of this role have already been presented in section 5.1.1.

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40 ―…i'd like to see more data and less minutes. eg: 4GB and 200 mins and a speed that i could stream ANY sort of video, the lowest quality would do, i don't need to watch HD on a 4.7in screen.‖

Member 181 ―option one needs changing for at least peace of mind can you guys please increase the allowance of £12.00 to 8gb and the £15.00 8gb also it would be a good peace of mind for users like me who range on the goodybag usage front it would go some way to mitigate allowance anxiety as i am feeling now‖

Member 14

In co-production characteristics, the result reveals three roles of community members. The innovators and customer feedback types contribute creativity and market information to the company, while the opportunists may undermine the outcome of value co-creating activities.

5.2.2 Community roles: marketing and sales

Online brand communities have been used as an effective marketing tool to build consumer relationships and brand loyalty (Spaulding, 2010; Jung et al., 2014). Members learn and share their knowledge about certain brands, and also recommend specific brands through the interactions in the community (Brodie et al., 2013). While the literature on the positive side of user behaviours in online brand community is rich, we know much less about their negative influence on the company.

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41 more significant than in off-line settings (Hennig-Thurau, Gwinner, Walsh & Gremler, 2004).

―So disappointed with GiffGaff. Once again you sign up for one thing and then it all changes at a later date. Nice to ask our opinion, but I have the feeling it has already been decided and a vote would be somewhat pointless.‖ Member 315 ―Nothing to say about it if you set up a proper customer service like the other companies (since from the slides you compared gg to them); if you stay as you are now then I think you are sucking people. Remember that people have joined you because you used to be cheap and not for the quality of your service which frankly is not one of the best (not a good coverage), but nevermind for ten £ a month! the 12£ goodybag was perfect for me and frankly I would not pay that much (£20) unless, again you will set up a proper customer service and improve your network coverage.‖

Member 262 The joint protesters seek to expand the group of participants who involve themselves in the protest and thus exert negative impact on the brand, by advocating joint protest in the online community. This behaviour may accelerate the dissemination of negative WOM and exacerbate the company‘s situation confronted with the protest.

―Do you (as in everyone) want the network to change? …If you like things as they are, then whatever you do, DON'T VOTE. Why vote for the option that you hate the least? At the end of the day, you still don't actually LIKE it do you?‖

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42 thinks too many people would vote for that option, as thats what I signed up to GiffGaff for Unlimited Data at £15.

very true ... why are giffgaff not giving us the ‗LEAVE IT AS IT IS OPTION‘ PLEASE DO NOT VOTE ... YOUR GIVING IN TO GIFFGAFF

LETS ALL STICK TOGETHER AND TELL GIFFGAFF WE DO NOT WANT THESE CHANGES !!!!‖

Member 4

The competitor agents not only generate negative WOM to the initiating brand, they also recommend others brands which usually are the competitors of the company they protest against.

―Why should I pay £20 to giffgaff for unlimited data with poor speeds when I can pay Three £20 and get unlimited data including 4G with unlimited tethering, 5000 texts and 2000 mins?‖

Member 86 ―I dont like any of the proposed changes. I need unlimited data and not a lot of minutes. The £12 goodybag is perfect. If it goes, I will be moving to T-mobile, which after cash back works out to be £11.49 per month for 2000 mins, unlimited data and unlimited text.‖

Member 587

The dropouts indicate explicitly that they will stop doing business with a brand or exit the community.

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43 definetely lose 3 customers.‖

Member 72 ―Customer requirements not fully considered - I will not vote. You are leading the customer by the nose. Looks like my best option is to move to a better provider!‖

Member 55

Four roles have been identified above that depict the negative reactions of members in the online community when co-creating value with the company. However, during the consultation, members‘ interactions also revealed some behaviours that may benefit the company.

The appraisers are considered as the opposite side of the challengers, who engage in positive WOM, instead of negative WOM. Section 5.1.2 already exemplified this phenomenon.

The brand defenders respond to dissatisfied members (e.g., the challengers and the competitor agent), and intend to disagree their opinions and justify the company‘s business. The behaviours of the brand defenders may alleviate the spread of negative WOM in the community, and even influence the original attitude of dissatisfied members towards the brand.

―Member 13 wrote: Giffgaff will lose a lot of customers due to this.

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44 The moral being that giffgaff still seems to motor on despite every change and continues to grow, and once again the same will happen here despite all the protestations,‖

Member 6 ―Some people were mentioning Lycamobile with their unlimited data at a £15 price point ( started at 12 quid back in April ) buy I read on The Register that once a user hits 10gb then they get throttled down to GPRS ( basically 2G ), so it's 'unlimited' but not as we know it.‖

Member 200

The behaviours of online community members under marketing and sales characteristics are rich and six roles are identified from the analysis. While the challengers, the joint

protesters, the competitor agents and the dropouts represent the group of members who

are not satisfied with the initiatives of the company in the value co-creating activities and seek to challenge them, the appraisers and the brand defenders play positive roles, counteracting that negative influence.

5.2.3 Community roles: reciprocity

As mentioned above, reciprocity in this research refers to the phenomenon that members provide help to other users or community members on request, voluntarily and discretionarily. Since Giffgaff does not have a call centre and relies on the community to provide the customer service (i.e., answering other users‘ questions and solving their problems), reciprocity is part of their culture of the Giffgaff community.

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45 ―@[member 10] Just to inform you:

If you do run out of data on your mobile you CAN still access all of the websites ending in "giffgaff.com" including the community forum as they have been free rated.‖

Member 12 ―@[member 102] You should not be using hotspot on unlimited data package‖

Member 7 Educators play the significant role of product support, not only solving each other‘s problems but also leaving the post history as an archived knowledge base for future users who have the similar problems. In addition, this behaviour alleviates the pressure on the company‘s traditional customer service and also may enhance customer loyalty as members get involved in the company‘s business (Spaulding, 2010).

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46

Fig.5.2 Roles of online community members in business value co-creating activities. Co-production

Innovator Customer feedback

Opportunists

Marketing and sales

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47

6 Discussion

The purpose of this study is to better understand behaviours of online community members when they co-create value with a company. Using netnography on a highly active thread in the Giffgaff community, this study reveals various phenomena in the value co-creating activity of the firm. While previous literature focuses on the positive reactions of online community members in value co-creating activities with the firm, this research contributes a more holistic view of members‘ behaviours. To meet objective 4, this chapter discusses the findings that were presented in the last chapter in the survey of previous literature.

In this qualitative study, three characteristics are identified as the major behaviours from the interactions within the Giffgaff community: co-production; marketing and sales; and reciprocity. More specifically, co-production here refers to members‘ contributions to the process of product development in the company; marketing and sales mainly concerns consumer engagement on online communities; and reciprocity stands for members‘ voluntary and discretionary support of other users who need help.

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48 An online brand community is also considered as a valuable and efficient instrument for marketing and customer relationship management (Zaglia, 2013). Spaulding (2010) believes that online communities can be used for the commercial advertising purpose and building brand loyalty. Further, they can be useful for sharing product-related knowledge and recommending certain brands to other users, activities which underlie the consumer engagement process in an online brand community (Brodie et al., 2013). Chan and Li (2010) find that reciprocal interaction in an online community can lead to the coordination and cooperation of purchasing.

The observation also reveals that some members intend to help others to solve their product-related problems voluntarily. This discretionary behaviour is recognised as

reciprocity in this research. This finding is supported by many empirical studies.

Spaulding (2010)defines this reciprocal behaviour as product support and argues that this characteristic may not only alleviate the burden of traditional support mechanisms by reducing the expense and improving the speed, but also enhance customer loyalty. Chan and Li (2010) find that reciprocal behaviours positively and significantly affect commitment and group purchasing in a virtual community through an online survey. Also, Noble et al. (2012) argue that an online community with high traffic and quick responses to members‘ requests improves community engagement and, consequently, induces purchasing.

Through further investigation, a list of particular roles of members‘ behaviours in online community is revealed by the netnography conducted on the Giffgaff community (Fig 5.2). The innovators of the community contribute their ideas to the product development of the company. Füller et al. (2006) and Füller and Matzler (2007) believe community members play the role of ―source of ideas‖ in idea generation, and ―co-creator‖ in designing and engineering new products.

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49 (Dahan & Hauser, 2002; Füller & Matzler, 2007). For example, the French telecom firm Orange refines its marketing strategy through collecting comments about the beta -test of its products on Lab‘Orange, a company-created online forum (Ramaswamy, 2010).

However, some members who are involved in this co-creation activity initiated by Giffgaff behaved like opportunists, driven by their self-interest. Opportunistic behaviours in co-creation can be categorised into two types: active and passive (Ertimur & Venkatesh, 2010). While active opportunism refers to the breach of the social contract between consumer and company, passive opportunism emerges when consumers do not contribute their efforts and knowledge to the value creation initiatives by the firm. For example, Nike‘s iD service allows customer to customise a pair of shoes with the print of ―own words‖ on the side. When a student requested ―sweatshop‖ as the chosen word, driven by his self-interest of pursuing a consumer activist agenda, Nike refused to complete the purchase order. The email correspondence between Nike customer service and the student were shared to millions of people and various organisations and media worldwide (Peretti, 2001; Ertimur & Venkatesh, 2010).

The challengers represent the group of dissatisfied members who are likely to spread negative WOM on the internet. Noble et al. (2012)believe that dissatisfied members in an online brand community may post negative product reviews and send private messages to other community members to convey their dismay. With the power of social media (e.g., Facebook has 864 million daily active users on average and 1.35 billion monthly active users as of September, 2014), online negative WOM can be traumatic to the firm (e.g., the ―United Breaks Guitars‖ music video case mentioned earlier).

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50 The competitor agent is the member who recommends other competitive brands (e.g., Three, EE, Virgin, etc.) in the Giffgaff community. This negative reaction of online brand community members has not been mentioned in previous literature. Since members usually engage in spreading positive WOM for competitive brands when they recommend them, this behaviour may drive the dissatisfied customer to switch brands.

The dropouts claimed that they would exit the brand and community if Giffgaff neglect their complaints and continue to implement certain decisions. Consumers are likely to exit the brand if their complaints are treated unfairly (S.Tax & Brown, 1998). However, users‘/members‘ ―special attachment to an organisation‖ or the lack of substitutable alternatives raises the cost of exit from a brand/community (Hirschman, 1970; Healy & McDonagh, 2013).

From a more positive perspective, the appraiser stands on the opposite side to the

challenger, spreading the positive WOM for the brand and the online community. Much

literature has already revealed this behaviour in online communities (Spaulding, 2010; Brodie et al., 2013). The brand defender, however, is rather a new character in relevant literature. The brand defender acts defensively when confronted with the negative reactions of community members (i.e., the challenger, joint protester, competitor agent, and dropout).

Brand defenders should add to the marketer‘s dream group (Noble et al., 2012), along with lead users, market mavens, super users, brand champions, and other members who have a deep attachment to the brand. The brand defender may also express negative attitudes and conduct adversarial behaviours towards competitive brands, and develop

oppositional brand loyalty (Muniz & O'Guinn, 2001; Kuo & Feng, 2013).

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51 community members (e.g., answers of other users‘ problems) can be considered as a knowledge base for future product support (Spaulding, 2010).

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52

7 Conclusion

The objective of this study is to better understand behaviours of online community members when they co-create value with the company. In order to answer the main research question—how do behaviours of online community members influence business value co-creating activities? —this research uses netnography on a highly active thread in the Giffgaff community: Giffgaff Community Consultation. The data include 962 comments from 594 Giffgaff members and two Giffgaff staff members. This study reveals various characteristics of community members in the value co-creating activity of the firm. While previous literature focuses on the bright side of online community members in value co-creating activities with the firm, this research contributes a more holistic view of members‘ behaviours, including negative reactions.

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8 Limitations and future research

This research is exploratory in nature due to the lack of earlier empirical research concerned with negative members‘ reactions in value co-creation activities in an online community. In addition, the nature of netnography entails several practical issues. Therefore, there exist several limitations in this preliminary study. First, while the data include 594 members and 962 comments, this study is based on a single online community of a particular brand (i.e., Giffgaff community), and a single thread (Giffgaff community consultation). Although the Giffgaff community is a highly active forum (Burkitt, 2010), and the chosen thread generated rich data comprising 8700 comments in total, the Giffgaff community cannot represent all online brand communities, nor can the particular thread represents all of the threads that were created for value co-creating initiatives. Additionally, the real identification of each member remains unknown due to the ethical issues of the research approach, so that apart from the potential demographic bias, there also exists the possibility that some ―community members‖ are actually Giffgaff staff. Also, adopting netnography on this study manifests some limitations due to ―its more narrow focus on online communities, the need for researcher interpretive skill, and the lack of informant identifiers present in the online context‖ that makes it difficult to generalise the findings to subjects outside the online community sample (Kozinets, 2002, p. 3).

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9 Managerial implication

This research gives online community managers a holistic view of members‘ behaviours when they participate in value co-creating activities initiated by the company. Managers should develop different strategies according to each behavioural role played by members. For example, on the one hand, community managers should intervene when members post malicious and illegitimate complaints, and in extreme cases certain forms of regulation should be practiced, such as dismembering and IP block to prevent members‘ further attacks; on the other hand, to cultivate favourable members to the business (e.g., innovators, brand defenders), companies should create incentives that function within the community, such as individual reputation, useful knowledge, social relationship, enjoyment and material rewards (Noble et al., 2012; Seraj, 2012; Kuo & Feng, 2013). In a bigger map, an online community is not only a marketing strategy, but also a business strategy (Fournier & Lee, 2009). To accomplish Objective 5, the managerial implications of each community role are presented in Table 9.1.

Role Managerial implications

Innovator

Managers can encourage community members to come up with creative ideas that can be used as a knowledge base for new product/service innovation and product/service improvement. Innovations based on consumers can reflect the market needs.

Customer feedback

Managers can use online communities to test the market response to the company‘s next product/service or strategic decision. This strategy can reduce the risk and market uncertainties of the company‘s next move. Managers can encourage community members to participate with proper incentives.

Opportunist

Managers should be able to recognise the opportunistic behaviours of community members in co-creating initiatives and be critical and cautious when considering their ―contribution‖.

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56 motivate them to spread positive WOM so that the company can

expand this group of members.

Brand defender

Managers can engage with brand defenders and understand the drivers that motivate them to justify the company‘s decisions so that the company can expand this group of members. In addition,

managers should pay attention to the conflict between brand defenders and dissatisfied members. Proper intervention is needed when the conflict escalates.

Challenger

Challengers usually express the reasons why they are not satisfied with the company. Managers should collect the reasons, understand and respond to their dissatisfaction before further engagement in negative WOM or escalation of negative reactions.

Joint protester

Managers should be able to identify them, understand and respond to their advocate before the protest escalates and involves more

participants within and outside of the community. Competitor

agent

Mangers can collect market information from them and understand what features of competitor‘s product/service drive customers to switch brands.

Dropout

Managers can predict the potential loss of customers and analyse user information (demographical, geographical, behavioural details) from membership accounts to understand the possible market response after certain business decisions are made.

Educator

Managers can consider educators as the complement or even

substitute of the company‘s customer service and product support. To encourage members‘ voluntary contribution to the community and the brand, managers should implement reasonable incentives, such as payback points.

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