Value Co-Creation through Digital Brand Communities

Abstract

Rapid digitalization across the globe has given birth multiple channels for interaction between consumers and the brands / organizations who are willing to interact with them. The abundance of data that is now available for brands about their consumer’s behavioral patterns is utilized by firms to derive strategic value and thus achieve competitive advantage across players in the market. One forum that various brand across industries have lately been using to interact with their customers are brand communities. These can be defined as platforms designed and maintained by brands to stay in touch with them and derive some upstream value in some cases or impart downstream value to their consumer in other cases. This project focuses solely on the former part of the argument i.e. brand community design for firms to derive strategic upstream value. To do so, the initial research involved a deep and thorough analysis of various existing brand communities across business domains. The engagement forums were intensely scrutinized to identify and understand the business decisions while creating and using these communities for generating strategic value. The objective is to then identify the type of engagement that helps derive upstream value and recommend a generic and exhaustive engagement strategy for firms’ basis the type of benefits and value they are looking to obtain from the digital communities. Basis the research conducted on brand communities; the upstream value that was derived from it were mapped to then cluster them into similar buckets. On doing so, six primary clusters were arrived at namely Content Contribution / Co-Creation, Promotions, Product Ideas / Improvement – Value Co-Creation, Customer / Product Support, Revenue based Business Model and Loyalty based Engagement. Each cluster represents a specific upstream value category that the brand / business wanted to derive from the design of the brand community. As part of the recommendations, a framework has been designed that maps each identified upstream value cluster and the amount of engagement the brand is willing to have in terms of Low and High to a strategic action that should be undertaken. To expand further, the strategic action can be understood as the brand community design in terms of customers on the forum, engagement activities, brand contribution and incentives. This will thus serve as a quick guide for brand community design basis how the brand sees its required upstream value and the commitment of this brand towards maintaining the forum.