VIRTUAL CUSTOMER COMMUNITIES IN CONTINUOUS
PRODUCT DEVELOPMENT –A COMPARATIVE CASE STUDY
FROM THE MEDIA INDUSTRY
and Hanna-Kaisa Ellonen1
Lappeenranta University of Technology, Finland
Virtual customer communities are online groups of customers who apply
communication technologies to engage in dialogue with manufacturers of
products and services. This inductive study of four cases from the media
industry examines what types of customer interactions provide support for
continuous product development. We classify the interactions to customer to
customer (C2C), customer to company (C2B) and company to customer (B2C)
categories. Based on a comparison of individual cases, we position these
interactions along a continuum based on their contribution with regard to
CPD. Whereas interactions representing an instrumental mode provide input
on one-time basis, those taking a more equal mode help companies to
understand customers’needs and values, and co-develop the product with
customers. Our cases demonstrate how customers contribute more to product
development when they are able to influence the virtual customer community
and its operations.
Keywords: virtual customer community, continuous product development,
continuous creation product, customer interaction
Virtual customer communities (VCCs) provide companies an opportunity to interact
directly with their customers. In prior research, VCCs have mainly been investigated
from the new product development (NPD) viewpoint, where some researchers (e.g.
Nambisan, 2002) claim that customers have eventually played a relatively passive role
as an information resource. In our view, the potential of VCCs is truly revealed within
on-going interactions in continuous creation products, such as many media products
(Picard, 2005) that involve the continuous creativity every day or week. While prior
research offers some illustrative single cases on the subject (Boczkowski, 2004; Ellonen
and Kuivalainen, 2006), current research is still in its infancy in terms of linking VCCs
with continuous product development (CPD).
Prior research has described how interactions in VCCs may take place on two levels:
one between the firm and its customers, and the other among customers (Nambisan,
2002; Füller et al., 2006). Nambisan (2002) in particular advanced the understanding of
different customer roles in VCCs. In our opinion it is exactly the microfoundations of
VCC’s, such as the different roles and different types of interactions, which enable the
development and existence of such communities. However, prior research has not
examined what kind of interactions take place in VCCs in order to systematically
identify and classify them. Secondly, these interactions have not been linked into
continuous product development.
Building on concurrent research on virtual customer communities, the aim of this paper
is to advance the theoretical and practical understanding of customer interactions in
CPD. The research questions are:
1. How can different types of customer interactions be classified?
2. What type of interactions between customers support CPD?
3. What type of interactions between the company and its customers support CPD?
The research questions are explored with a comparative case study strategy (e.g.
Eisenhardt, 1989). Our research design includes four cases from the media industry.
Building on triangulated data of interviews, observation and secondary data we
inductively identify the different types of interactions and relate them with CPD. The
rest of this paper is structured as follows: We start by a brief introduction of prior
research on virtual customer communities. Thereafter we describe our research design,
methods and data. The empirical part of the paper starts with case-by-case analysis of
each VCC and its role in the CPD. We conclude with case comparison and discuss the
theoretical and practical implications of our findings.
2. THEORETICAL POINT OF DEPARTURE
Current literature on open innovation (Chesbrough, 2003; Thomke and von Hippel,
2002; O’Callaghan, 2004) suggests that collaboration with users and customers can be
organized in the form of social communities, often referred to as virtual customer
communities (VCCs). They are online groups of customers who apply communication
technologies to engage in dialogue with manufacturers of products and services. VCCs
are suitable for developing information products such as software (Jeppesen and
Frederiksen, 2006) and media products (Kosonen and Ellonen, 2007; Ellonen and
Kuivalainen, 2006), but they are increasingly applied also among businesses developing
physical products, as within the sports industry and the automotive industry (see Füller
et al., 2006, Prandelli et al., 2006).
The benefits of VCCs are various. Companies may host them to support new product
development (Nambisan, 2002), on-going development of existing products (Kosonen
and Ellonen, 2007), building brands and increasing brand awareness (McWilliam, 2000),
collecting feedback (Williams and Cothrel, 2000), and providing product support cost-
effectively, also allowing member-to-member support (Wiertz and de Ruyter, 2007;
Fahey et al., 2007). By bringing together enthusiastic users willing to exchange opinions
and experiences, VCCs provide companies with new opportunities to create value and
leverage knowledge embedded in customer relationships. Members of these
communities demonstrate high product interest, high levels of product-related know-
how, and typically high presence on the Internet; they serve as a source of product
innovations and development insights (Sawhney et al., 2005; Prahalad & Ramaswamy,
2000). The collective dynamics of VCCs may thus have the power to influence strategic
decisions on company level (Moon & Sproull, 2001).
There are three important attributes within VCCs that are of special relevance for
companies. Information shared in communities relying on iterative interaction patterns
would be difficult or impossible to obtain using research tools (eg. Prandelli et al.,
2006). Moreover, VCCs provide such information with drastically lower costs than in
offline environments. Finally, the community engages in ‘natural’and continuous
discussion as opposite to temporary, one-time initiatives to support product
development. As Nambisan (2002) and Füller et al. (2006) have described, interactions
in VCCs take place on two levels: one between the firm and its customers, and the other
among customers who help and support each other.
Nambisan (2002) describes how VCCs enable firms to support product development
and modification through a variety of customer roles. Firstly, customers can be involved
as buyers of the product. Secondly, they can be seen as information resources, thus
supporting innovation processes. Thirdly, customers may take the role of users who
contribute eg. into product testing, and also support other users as peers. Finally, as co-
creators customers directly contribute to the development of new products. In our view,
these roles are manifested not only in new product development, but also in continuous
development and modification of existing products (see Kosonen & Ellonen, 2007). To
capture the different types of customer interactions in detail, we now proceed into
introducing our research design, and thereafter, case analyses.
3. RESEARCH DESIGN AND METHODS
Following Nambisan’s (2002) suggestions to collect rich descriptive data on the design
and evolution on VCCs in different product development contexts, we chose to conduct
a comparative case study. In multiple case studies, a replication logic is applied and
each case is treated as “an independent experiment” that stands on its own as an
analytical unit (Yin, 2003; Eisenhardt & Graebner, 2007).
Our primary data collection method was semi-structured interviews. We interviewed 13
key people responsible for the online services and from different business functions
(management, editorial, marketing/sales) about their product development and customer
communities. Interviews typically lasted 60-70 minutes. All interviews were taped, with
the permission of the interviewees, and transcribed. This resulted into a textual dataset
of 102 pages. As typical to case studies (Tellis, 1997), the interview data was
triangulated with other data. All case communities were observed (cf. Kendall, 1999)
for several weeks to explore the interactions between customers and the companies, and
the site functionality in general. Also secondary data (statistics, newspaper articles and
other print materials) on each case product was collected.
As suggested by many case study experts (e.g. Eisenhardt, 1989; Yin, 2003), we started
with building individual case studies. Using the interviews, together with observation
and secondary data, case descriptions were prepared. Thereafter, we analyzed the data
for each case using template analysis (King, 2004) to identify and categorize different
types of customer interactions. This way of thematically and hierarchically analyzing
qualitative data allows modifying the initial set of codes during the data analysis process,
and thus makes the research process reflexive. The unit of analysis in this case study is
the media product concept consisting of all products offered under the same brand (ie.
print products, website, mobile services, marketing campaigns etc.). In the analysis we
identified different types of interactions that were seen to support the continuous
development of any part of the product offerings.
In order to increase the reliability of our study, both authors participated in the coding
phase and contributed to the key findings individually. The findings were double-
checked and agreed upon jointly. Two tactics suggested by Yin (2003) were also
followed to ensure the validity of the research: using multiple sources of evidence and
establishing a chain of evidence with the coding. Having presented our methodology,
we now proceed to describe our cases.
4. WITHIN-CASE ANALYSIS
4.1 COMIC MAGAZINE
The comic magazine is a local edition of a global comic. With a circulation over 300
000 the comic magazine is one of the most popular magazines in the country illustrating
that it is not only read by children but in every age group. The comic magazine
launched its new website early 2008. The new website uses a wide range of Web 2.0
applications, such as a wiki, discussion forums, and blogs maintained by the editorial,
and also has some video material. After the launch peak in the visitor traffic, the weekly
number of visitors has now stabilized at around 15 000.
The VCC communicates by writing on the discussion forums and on a wiki. Only
registered users may contribute. The customers exchange opinions, provide peer support
and expert knowledge, and also tell each other how to behave on the discussion forums
and what kind of content is appropriate for wiki publication (for instance, younger
members are advised to avoid opinion-types of postings that belong to the discussion
forum). In addition to forums and wiki, members of the community also participate by
rating comics published in the print magazine, and by making drawings by their own.
The company organizes seasonal “art exhibitions” where the selected work by
community members are published on the site in its Gallery section. The customers also
communicate with the company by sending feedback, and concrete ideas for product
development and actively comment the editorial blog.
”We are planning on launching a campaign that includes a game that was suggested by
The company has asked for customer input, e.g. ideas for comic covers. They also
moderate the discussion forums, and host activities that will help the customers to spend
time on the website. Active participants are rewarded with a special “medal”that is
visible to others.
“We try to come up with ideas that will help our customers to get to know the site and
spend time there…”
Currently all feedback and other communications by the customers that are linked to the
website are immediately taken into consideration and possible modifications made on
the site on a continuous basis. So far, the company has not utilized the customer input
in the print magazine, although they are about to launch a new marketing campaign
based on a customer’s idea. They also point out that they keep an eye on the discussions
and if there is something interesting they have an opportunity to have a special comic
made on the topic or comment it on the editorial pages. While there are only a limited
number of editorial pages in the print magazine, the editors can now immediately react
to customer input on the website and their blog. They also follow the discussions to spot
ideas, such as publishing new books.
4.2 DIETING COMMUNITY
The dieting community is an online-only service provided by a magazine publisher. It is
independent of any of its magazine brands and was launched in Spring 2006. The
community is targeted at customers, mainly women, willing to lose weight. The service
consists of a software that guides your nutrition and exercise, a number of discussion
boards for peer support, and articles written by an external expert panel and journalists.
During the first half year of its existence, the community had attracted over 20,000
unique visitors, each paying a monthly fee of nearly 10 euros. However, the number of
visitors has been declining since and in the beginning of 2008, the service had only
1500 weekly visitors.
Customers participate in active discussions on the forums, and by producing content,
such as personal food diaries. Volunteer club hosts participate in the discussion and
keep up a pleasant atmosphere. Many times, the discussions also touch the topic of the
dieting community application, and customers help each other with technical problems.
“The discussion is really supportive… sisters stick together!”
Customers actively send feedback to the community staff. The feedback is visible on
the forums, and the community staff answers it publicly. Both the expert panel and the
community staff participate in the discussions. Active participants have a possibility to
become volunteer club hosts, and the staff hosts face-to-face meetings for these
volunteers. The company also moderates the discussions, and sometimes asks for
customer input (feedback or e.g. interviewees for articles).
“We have been very open and publicly said we are sorry if we have made mistakes; we
have answered the questions as soon as possible on the forums.”
The whole product development of the Dieting community is based on customer
feedback either directly posted to the staff or ideas picked up from the discussion
forums. The community staff and editorial panel closely follow the discussions and
write articles on “hot”topics. There is a core group of approximately 100 members who
are actively involved in the interactions with the company regarding product
4.3 LOCAL NEWSPAPER
Our third case is a local newspaper published by major media company. The print
newspaper has over 125 years of traditions, and a protected position in the market with
no direct competitors. The circulation of the newspaper is 32 690, and readership of 81
000. The website content mainly summarizes the print newspaper’s news content. There
are also 10-12 blogs written by editors and invited local people, together with some
interactive applications, such as daily polls. The readers also participate in discussion
using text messages that are published both in print newspaper and online. In early 2008,
the website had approximately 15 000 weekly visitors.
The VCC interacts mainly via text messages that are published both online and in print.
The text messages posted comment on each others opinions as well as current issues in
local area. Some posters know each others alias and other posters may comment if a
regular poster has not posted for a while.
“You can even see some brands in the text message board. Like [alias]… People get
worried if she does not post for a while.”
Sometimes customers send feedback to the company, but many times they react to
company initiatives and send pictures, news tips or answer daily polls on the website.
Some editors write a blog which, however, only rarely gets comments. The editors also
answer customer feedback privately.
“I answer our customer feedback almost daily by email.”
The local newspaper publishes some of the text messages and other material posted by
the readers. The editors check the quality of the material and it is published both online
and offline. The journalists read the material sent to the newspaper and pick possible
topics for their articles. Either provocative messages or topics with a large number of
messages often for the basis of a journalistic piece. Sometimes also the daily online
polls are reported as articles in the newspaper.
4.4 BUSINESS DAILY
Case four is the leading business daily targeted to decision-makers. The circulation of
the newspaper is 81 377 and the readership 208 000. On their website they publish free
content related to the print newspaper, online-only content with usage fees, and they
also host active discussion forums and a collection of over 500 blogs. The website
traffic has doubled during last year, and currently they have over 360 000 weekly
Customers participate in many ways: they discuss on the forums, write blogs, comment
on other (non-editorial blogs), and linking external web-material on the forums.
Volunteer visitors have taken some hosting duties, and participate in the conversation
with their own opinions.
“Our readers are really critical and they discuss our articles a lot … they let us know if
we made mistakes.”
The editorial blog is visible on the main page and usually gets lots of comments,
sometimes as many as 100. Customers send feedback about the print newspaper as well
as about the website, and have also presented concrete ideas for product development.
“A group of bloggers had an idea of product development on the web and they called
Also the company has taken an active role by organizing polls in the discussion forums
and by introducing new discussion forums to meet their business motives. Editors write
a shared blog, and they comment on the comments they receive. The company also
hosts face-to-face meetings for active bloggers and an investor competition with special
discussions. The discussion forums are moderated and company staff responses to
customer feedback publicly online.
“He [editorial blogger] asks people for their comments, and always comments the
comments and then utilizes the comments in future articles.”
The Business daily shows user-generated content visibly on their website. Newest
discussion entries and newest blog entries are there, and also the number of replies they
have received is shown. Therefore, the VCC is visible and in part of the product
development on the website. Customer feedback regarding the website is always
considered, as are concrete ideas suggested by the customers. Print journalists follow
the discussions for ideas for articles, and also read blogs and blog comments to get an
idea of their target groups interests. The editor follows customer feedback closely, to
see how the readers react to the articles published. Some discussion forum posts are also
published in the newspaper, and the editorial blogs are posted both in print and on the
web to activate discussion.
Having presented the case-by-case analysis, we now proceed to case comparison. We
start by summarizing the different types of interactions observed in all cases.
5.1 WHAT TYPE OF INTERACTIONS SUPPORT CPD
Based on our data, we can identify different types of interactions between customers,
and customers and the company. A summary of the interactions found in each case is
presented below in table 1. We observed examples of “customer to customer”,
“customer to company”and “company to customer”interactions in all the studied cases.
Interactions on the website
Customer to customer
Content production x x x
Participation (forums, blogs, etc.) x x x x
Peer moderation x x
Volunteer hosting x x
Customer to company
Commenting editorial content (articles/blogs) x x
Giving feedback x x x x
Presenting concrete ideas for product development x x x
Reacting to company iniatives x
Company to customer
Asking for input x x x
Commenting comments x
Editorial blogging x x x
Hosting (discussions / meetings / activities) x x x
Moderating the discussions x x x
Participation in the discussions x
Private responses to feedback x
Public recognition of active participants x x
Public response to feedback x x
Table 1. Types of interactions
5.2 HOW DO DIFFERENT TYPES OF INTERACTIONS SUPPORT CPD
Having identified the different types of interactions, it is now time to proceed to
consider their relevance in CPD. As described in section 4, all interactions were
identified for having some support for product development. We now explore their role
in CPD in more detail.
Based on our analysis, there are interactions that support CPD but which, as interactions,
only take place on a one-time basis. This is visible in all four cases. For example,
corrections can be made based on a single customer feedback and sometimes customers
respond to a company iniative. However, the parties do not take part in reciprocal
communication, but the interactions are often one-way and one-time.
“Customers tell us what is wrong, what is good and what should be changed.”(Dieting)
“We have invited customers to send us pictures to be published on the website… We
haven’t got any pictures now for quite a while –I think it is a pity.”(Local)
On the other hand, when customers get to engage in conversations on the discussion
forums or blogs, the interactions provide more ongoing support for CPD. In fact, the
constant discussions between customers on the discussion forums or the like provide an
ideapool for product development and also serve as a “sounder”of what is accepted and
valued among customers and what is not. This is something interviewees in all four
"This is really valuable for us because we get to see what is in their heads and what
they think." (Comic)
“If there is a hot debate on some topic, the experts will write an article on that.”
Some interactions support and nurture the community and its discussions. By
supporting the continuation of the community, these interactions also enable the
continuing support for product development. This type of interaction was mostly visible
in Dieting and Business cases:
“The good thing about discussion forums is that when there is critique, we can comment
the discussion… the development project is totally public…I think this is how we got our
most committed customers.”(Dieting)
“It is important to understand that we do not own the community, and they could decide
to go somewhere else any day!...Therefore, we need to show them that we actively listen
to their wishes and ideas and have high regard for their opinions.”(Business)
Finally, there are also interactions that empower the customers to become co-creators of
the product and take responsibility in the community. When the community members
take more responsibility in the community actions, they are likely to become more
committed and also engage others in active participation. Comic case illustrated these
interactions, together with Dieting and Business.
“The users write to a wiki to build a database of all facts and trivia on the topic. They
get to present all the knowledge they have and edit it together.”(Comic)
“The club hosts are active participants, who keep up a good atmosphere and help
Figure 2 summarizes the above discussion. We have positioned each type of interaction
along a continuum based on an evaluation of the importance of the interaction with
regard CPD. The interactions on the left hand side contribute to CPD mainly by
providing input on one-time basis, where as those positioned in the middle help the
company to better understand the needs and values of their customers. Interactions
positioned closest to the right represent ongoing and more open product development
where customers have a visible role.
Instrumental mode Equal mode
Getting input Better
customer needs and
Figure 1. Different types of customer interactions and their support for CPD
We note that it is not only their role in the CPD that connects each type of interaction
with others positioned close by. Based on our understanding, the positioning of the
different types of interactions also reflects a mode of interaction, ie. how equal the
parties involved are seen by each other, and how reciprocal their communication is. In
our understanding the left extreme of the continuum could be described as representing
an instrumental mode of interaction whereas the other end of the continuum represents
an equal mode of interaction. Let us elaborate on this argument in more detail in the
The instrumental mode of interaction is in many ways close to the traditions of the
traditional media by which journalists have been the authority who has decided what
customers should read. This way of communication is described by one-way
communication, with limited, and often only private, discussion between the company
and its customers. In our view, some of the interactions identified in the previous
section carry the heritage of this kind of one-way and temporary, company controlled
communication, such as when companies ask for a specific type of customer input.
Clearly, it is the company that sets the rules for the interactions, and customers simply
react to the company initiatives, but no reciprocal communication takes place.
We could also argue that on the other extreme are situated those interactions that are
characterized by on-going and two-way reciprocal communications. An example would
be when the company publicly responses to feedback on the website. The customers are
not seen as below of the company, but rather as equals. Therefore they get ‘an open
voice’and also public recognition for active participation and authority in the website
(hosting, moderating). By producing content on the website they become respected and
valued co-creators of the product. Rather than working with the rules of traditional
media and journalists, these interactions follow the rules of new Web 2.0 and its users.
6. DISCUSSION AND CONCLUSIONS
The objective of this paper was to identify and classify different types of interactions in
VCCs and examine how they support CPD. Building on our analysis of four cases from
the media industry, we classified interactions to three categories: customer to customer
(C2C), customer to company (C2B), and company to customer (B2C) interactions,
which we identified from all the studied cases. To answer our second research question
related to the types of interactions between customers, we identified that participation
and content production, together with gaining a responsible position among the
community (peer moderation, volunteer hosting), provide support for CPD through
increased opportunity to influence the community’s operations. As regards C2B
interactions, we noted that customers comment the content and give feedback either
reactively or proactively. Finally, B2C interactions supporting CPD involve asking for
customer input, engaging in open discussions with them, hosting and moderating,
responding to customer feedback either privately or publicly, and showing recognition
to active participants of the community.
When we compared the findings of the individual cases, we positioned the identified
interactions along a continuum based on their contribution with regard to CPD. We
noted how interactions adopting an instrumental mode merely provided input on one-
time basis, while others taking a more equal mode help to understand the customers’
needs and values, and even co-develop the product with the customers.
Reflecting back to Nambisan (2002), we emphasize how the equal mode of interactions
empowers customers to engage in more responsible roles and positions within the VCC,
and therefore become co-creators of the product. Our cases demonstrated how members
contribute more to CPD if they are able to influence the VCC (e.g. by producing content
themselves and gaining public recognition), and respectively the company’s actions. For
instance, voluntary moderators exert a great influence on the community, and their
efforts are also being rewarded by the company’s side. From the company’s viewpoint,
nurturing member interactions requires understanding about the community culture and
thus active engagement. For instance, rewards and ‘tokens’to encourage participation
tend to be context-specific (Moon & Sproull, 2001), in other words, they only have
meaning for the specific community.
Our lesson for managers is considering the options Web 2.0 based VCCs could offer for
companies. Based on an analysis of over 200 brand and corporate websites, Prandelli et
al. (2006) note that only a limited set of two-way communication tools is available and
only few companies demonstrate an optimal level of interest towards taking advantage
of VCCs and web-based customer involvement. However, more opportunities to
integrate customers to product development have emerged, as our cases illustrate.
Secondly, we emphasize that companies should be aware of the mode of operation
within VCCs, whether instrumental or more equal-based. The latter not only empowers
customers, but also requires a new mindset from the company’s side in terms of
engaging in more open product development. The instrumental mode considers the
Internet as an information resource which allows companies to collect information in an
one-way setting, whereas the equal mode allows customers and company
representatives to engage in two-way communication to explore new ideas and
Having identified the two modes of interaction, we respectively note the dilemmas
involved in them. Companies need to manage VCC relations of volunteer members, but
simultaneously avoid attempts to overwhelmingly ‘control’their interaction (see Moon
& Sproull, 2001). As (media) companies are increasingly migrating to Web 2.0
applications for their customers’use, the question about balancing between these two
remains a focal issue for management. Secondly, there is a fundamental trade-off
between exploring new alternatives and exploiting existing resources (March, 1991); in
terms of our cases, whether the media companies are able to ‘open themselves up’for
the array of web-based customer interactions or whether they stick into the traditional
mindset of controlling the content, and more broadly, the whole media product concept
Finally, the present study carries certain limitations. The data was gathered from four
cases representing VCCs within the media industry and therefore should be applied with
caution into other contexts. Furthermore, other types of cases and methods are needed to
investigate the relationship between the equal mode of interaction and support for
continuous product development.
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