In an exclusive preview of her latest book, Elen Lewis reveals how eBay taught millions of strangers to trust one another.
Unlike any other brand I know, eBay offers a snapshot of humanity. All human life is there. It is a new-generation brand, one that's shaped through its rabble of noisy traders.
EBay's brand is moulded and guided by its community. It is a brand that is less about consistency and more about involvement and interaction with consumers. It's an organic, messy brand that enables its customers to shout and rage in its chat rooms and rebel against unpopular corporate decisions.
Sometimes, this symbiotic relationship makes life more complicated for eBay's leaders, but when it works, it can result in some of the brand's best innovation. It also means that eBay grows through word-of-mouth and has some of the most loyal consumers in the world.
EBay's business model is almost entirely reliant on its army of buyers and sellers. While eBay provides the arena, its community of bubble wrap entrepreneurs must set up their market stalls, engage their customers and sell them stuff before packing and posting to them.
The members of eBay's vast online community trust each other, although they've never met. This is largely due to a public, self-regulated ratings system where traders leave feedback for each other following transactions. It means bidders can have confidence that the seller will not take their money and run, while sellers are confident that the winning bidder pays for their item. EBay's 203 million members worldwide have left more than three billion feedback comments for one another regarding their transactions.
Take a step back and consider the concept of eBay. The whole idea of sending money off into the netherworld and expecting someone to send you something in return is a leap of faith. Yet, eBay's founder Pierre Omidyar astutely realized that the eBay brand experience was defined by how its customers treated one another.
EBay's feedback system is one of the greatest innovations in online auctioneering. Without it, strangers would find it difficult to trust one another. But it has always inspired high emotions.
Early in its history, eBay management learnt the danger of making strategic decisions without involving its community. The creation of the coloured stars in the feedback system in the late 1990s initially caused uproar. Mary Lou Song, eBay's third full-time employee developed the system and posted her proposal on eBay's bulletin board for users to view.
She was shocked to discover the strength of feeling that poured from the eBay community. They were disappointed that they hadn't been consulted earlier on in the process. Song's choice of green was particularly unpopular and led to email messages along the lines of "are you insane?" She was surprised by the extent to which the eBay community expected to be involved. As she noted at the time, if McDonald's unveils a new sandwich, people just decide to buy it or not. They don't say, 'Why didn't you talk to me?
But in today's world of empowered customers and social networking, there are so many lessons that other brands can take from eBay's journey. EBay with its emphasis on interaction, involvement, personal experience, culture and community is the shape of brands of the future. When it works best, it is branded as translator, never dictator. It is a brand that valued the human soul at $504 and taught over 200 million strangers to trust one another.
The Story of eBay by Elen Lewis will be published by Cyan Books in February Click here to buy the book