Should firms pay for online brand communities: Using lead user theory in analyzing two contrasting cases

Abstract

Despite the importance and benefits of Online Brand Communities, there is little discussion in the literature about whether it is necessary for a firm to financially sponsor its online brand community. By incorporating brand trust, brand knowledge, and reciprocal behavior into Lead User Theory, this paper studies what influences consumers' participation potentials in new product development. Two online survey instruments are employed, and data is collected from two matchable well-known IT companies for two types of online brand communities: Company-initiated and Consumer-initiated. Two separate parallel Structural Equation Modeling analyses are conducted to test these two matchable samples and assess the research model. Our findings suggest that firms may not need to pay to sponsor their online brand communities. We infer our conclusion about company-sponsored communities from our findings that brand trust and brand knowledge play different roles for company-initiated and consumer-initiated online brand communities. Brand knowledge directly impacts consumers' participation potentials in consumer-initiated online brand communities, but only indirectly impacts through brand trust in company-initiated online brand communities.