Commodity versus Community Part 1: Switching Costs

Switching Costs

News and journalism is rapidly becoming a commodity, and like most commodities people will readily switch from one to another. When the switching costs are low loyalty is rare. The only way to stem the loss of readers is to increase the switching costs: your visitors have to feel as if
they are giving up more than just another source of news.

Membership: An oldie but a goody

Switching costs can be psychological or tangible. American Express turned their commodity credit card business into a “membership” and published the “member since” date on the card. The idea of membership was later extended to air miles, and dozens of other businesses, where the rewards of membership were more tangible: free trips for example.

News organization have to turn their readers/visitors into members in order to increase switching costs and escape from the commodity trap. Many organizations recognized this and tried to layer on a social network to their sites. This was a near total failure. Readers don’t want to to network at news sites. They do that at Facebook or LinkedIn.

From Contributor to Member

What has worked is turning readers into contributors. Comments on blog posts and articles have been abundant (if not always valuable) and Flickr groups have done well. But none of these provide the visitor with an identity or a social context – people contribute but they don’t interact. The next evolution is to move from contributor to member. Membership involves
identity and interaction with other members of the community as well as editorial staff.

Social Q&A Provides Tangible Membership

Social Q&A has proven to be a non-intrusive approach to membership with tangible results. Questions and answers are appropriate for news media, because the news raises as many interesting questions as it answers. Q&A is best on a local level because people can ask questions and get answers that are relevant to their specific community and context.

If you have a question about insurance providers in Philadelphia wouldn’t it be better to ask it at Askadelphia (Q&A for the City Paper) than at Yahoo Answers or Google? There is nothing more social than a question, nothing more engaging than an answer.

Member Loyalty (Return Visits)

Creating a Q&A site is easy. It takes some effort to build the community, but unlike readers, these are people who come back again and again. And the more they come back, the more they contribute and the greater their sense of membership. These people, these members, don’t leave. The switching costs are too high. They can’t just create an identity, create a body of content and establish a reputation by going to another site. On an average YouSaidIt Q&A site, 45% of the members come back at 50-200 times a month and half of those (27%) come back more than 200 times a month!

Value your Members and they will add Value

There should be special benefits for members, beyond identity and reputation, they should have access or abilities that casual readers don’t have. For example, journalists often interview experts on a given subject and report in Q&A style: “A Q&A with Einstein on God and Physics” for example. This is a favorite and relatively easy format for both journalists and readers.

The problem with these, or at least the lost opportunity, is that the journalist thinks he/she knows what the people want to ask and they never get a chance to ask it themselves. Well, not never, more recently journalists have asked readers to ask questions in the comments section in advance. Why not let members ask the questions directly and vote on each others questions such that the most popular get answered?

Lose the Meddling Middleman!

One of the great assets of a news organization or media site is their ability to gather an audience and a readership. Sometimes they should use this ability for the direct benefit of their members, assemble and get out of the way. Let your members interact with the “expert” (be it chef, politician, doctor, CEO, publisher, etc). so that they feel valued. They will return that value by asking questions you never thought of, by getting into the subjects and detail that others really need and want. Don’t sideline them into the comments, make them a part of the process.

The Town Hall or “Talk Show” Model

The approach of direct interaction is similar to other models like a call in talk show or a town hall. In these contexts the people get to interact directly with the VIP or expert. The problem with these offline models is that most people never get to ask their questions or vote on the relevance of the questions being asked. In the online version, everyone can ask and voice their opinion by voting.

Is this the holy grail for the online new source? No. There is no holy grail. Newspapers once made money through subscriptions and a plethora of personal and commercial advertising models from classifieds, to job search, to real estate to roommates. There was no single model before and there won’t be one tomorrow. There will be a bunch of things that when combined make for high value, high switching costs and ongoing revenue.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s