For businesses and individuals alike,

1. REPUTATION MANAGEMENT
result, users will often go to great lengths to laborate, and whether or not we can be trusted. thers banker John Zimmer, who wanted to cre­
build and protect their reputations. eBay’s peer­ Companies involved in social technologies ate more sustainable transportation but not go
policed rating system weeds out the bad behav­ (social media such as Facebook and other sites) down the route of environmental guilt. They
iours and encourages the good. often focus on the newest bells and whistles, realised the enormous potential of mobile tech­
believing this will make their venture succeed or nologies to reinvent an old idea – car pooling.
THE RUMOUR MILL fail. Undoubtedly, a great user experience is crit­ Given that an estimated 20 per cent of all CO2
The striking thing about the feedback among ical but a well­designed reputation system driv­ emissions come from cars, and about 75 per cent
users on eBay is that it is so positive. Studies have ing the right behaviours and community culture of all car trips in the US and Australia are solo
found that about 99 per cent of trades receive a can make the difference between a flying success rides, the idea made a lot of sense from a pure
“positive” rating and the 1 per cent rated “nega­ and a miserable flop. Reputation systems build green­savings perspective.
tive” or “neutral” are often downgraded for rela­ peer transparency and knowledge – of interests, But Zimmer and Green’s vision was bigger: to
tively minor reasons, such as “item arrived one whom users know, personal preferences, past turn commutes and errands into a social activity
week later than expected”. actions – about strangers, thereby taking ano­ by transforming solitary rides into shared ones.
So why do people behave so well? It’s pretty nymity out of transactions. Critical to the success of Zimride – and other
simple: users know people will see feedback left ride­sharing platforms just getting started in
about them and that their behaviour will affect RIDING ON REPUTATION Australia, such as Needaride or Catchalift – is
their ability to transact. It’s the ancient power of In the United Statesand Canada, Zimride is one enabling people who have never met to over­
word­of­mouth meeting the modern forces of of the fastest­growing ride­sharing services. It come the understandable wariness of sharing a
the networked world. As Axel Ockenfels, an eco­ uses social technologies and Google Maps to ride; in other words, using technology to build
nomics professor at the University of Cologne, match riders and drivers taking the same route. trust between strangers. There is a Russian
puts it, the reputation system on eBay “functions The company was founded in 2007 by entrepre­ proverb, “doveryai, no proveryai,” that translates
like an organised rumour mill”. neur Logan Green and former Lehman Bro­ as “trust, but verify”.
Ratings and reviews built upon the opinions of
millions of users (“the wisdom of crowds”) are
increasingly influencing our consumer behav­
iour. From the books that we read (Amazon), to
THE REPUTATION ECONOMY
the music we download (iTunes), to the restau­ 10 ISSUES TO CONSIDER WHEN DESIGNING A PEER­TO­PEER REPUTATION SYSTEM
rants or shops we choose (CitySearch) to the
tradespeople we hire (WhoCanDo) to the prod­ 3 Unforgivable behaviour: 3 Signal: People need to be and meaningful about
ucts we buy (Epinions), we are increasingly rely­ Identify the single most crystal clear on what they themselves.
ing upon the opinions of peers. But reputation important good behaviour are rating. Identify the main 3 People like me: We like to
systems are now entering a turbo­charged age that the reputation behaviour signal you want know, and tend to value,
of sophistication and they will become more mechanisms need to users to be able to share, eg what our friends and people
YOUR GOOD NAME IS BECOMING THE NEW CURRENCY, AS TECHNOLOGY important in building collaboration and
trust, peer to peer.
encourage. This will
simultaneously act as a
like/dislike;
satisfied/dissatisfied;
like us think of other people.
Integrate “inner­circle”
ENABLES TRUST AMONG STRANGERS Over the past 20 years, we have literally wired strong disincentive for bad trust/distrust; vouching mechanisms
our world to share, creating an unbounded mar­ behaviour. reliable/unreliable, etc. (for example, went to the
ketplace for exchanges between producer and 3 Decipher: There is a gap 3 Sticky ratings: Pick a same school, work in the
STORY RACHEL BOTSMAN
consumer, seller and buyer, lender and bor­ between what people primary scoring system same office) into your
rower, and neighbour and neighbour. actually care about and (stars, ticks, tiers, thumbs, reputation system.
I
t would have seemed like a crazy idea a dec­ transaction, buyers and sellers can rate each “Reputation is a summary of one’s past actions The old consumer world created a layered what they think they care badges, numerical ratings) 3 Peer­police: An open
ade ago that people would virtually trade other using a simple points system (1, 0 or ­1). within ... a specific community, presented in a interface – otherwise known as the middlemen – about. Test your system to and give the ratings reputation system must be
goods with complete strangers. Yet every sec­ Once users reach a certain number of points, manner that can help other community mem­ between the company and consumer, bridging clarify the difference. sticky names, such as peer­policed but if things do
ond of every day, $2000 worth of items are they receive a star attached to their screen bers make decisions ... whether and how to the gap between production and consumption. 3 Competition: We are innately “Power Seller”. go wrong, your organisation
traded on eBay. You can’t physically inspect an name, indicating their trustworthiness. The relate to the individual,” Chrysanthos Dellarocas But the internet is removing the middlemen, so wired to love being top of 3 Trust dimensions: People needs to be on hand quickly
item; users are free to choose a trader identity, “red shooting star” indicates the highest rating. wrote recently in MIT Sloan Management Review. that everyone from T­shirt designers to musi­ the table. Present your user build trust in different ways. to offer support, resolve
even a pseudonym. Furthermore, you pay with­ But points alone often don’t get across the Not surprisingly, on eBay, ratings strongly influ­ cians can make a living selling peer to peer. rankings to create healthy Scoring systems are great disputes and weed out the
out any guarantees your goods will be posted, let details and subtleties of a transaction. This is why ence buyer and seller perceptions. A socio­economic cornerstone of this peer­to­ competition among peers. but they are often binary. vandals and abusers.
alone be in the condition you expect. How does eBay encourages users to leave a short comment A positive rating becomes equivalent to a first­ peer economy is reputation. In the old con­ 3 Quality: Celebrate and Build in qualitative feedback 3 Mirror reality: The ultimate
a system that shuttles vast quantities of used explaining their rating, along the lines of “item hand reference from someone we’ve never actu­ sumer world, our credit rating was far more reward users who take the systems based on open­ goal of your system is to
goods among distant strangers work so well? received as described, thanks”. On the flip side, if ally met, helping us make better decisions about important than any peer­to­peer review. Nowa­ time to contribute quality ended questions that anyone virtually replicate the trust
eBay has proved how the trust we typically buyers are not happy with the trade, they post whom to exchange or interact with. People want days, with every seller we rate on eBay, idea or feedback; they should can answer and that will we form face to face. Mirror
form face to face can be built and assigned damaging reviews such as “seller is a rip­off” or to buy from sellers with positive ratings and will moment we share on Twitter or Facebook, video become the benchmark prompt people to share the questions and dynamics
online, by creating the grandfather of reputa­ even more frank: “Lied about condition. Rude, pay a premium. And many sellers will not accept we post on YouTube or photo on Flickr, we for others. something revealing we use in physical reality.
tion systems, the Feedback Forum. After any don’t buy from! Look at her feedback!” bids from people with low or few ratings. As a leave a reputation trail of how well we col­
54 x AFRBOSS.COM.AU x NOV.10 NOV.10 x AFRBOSS.COM.AU x 55

2. REPUTATION MANAGEMENT
GUIDE TO THE TWITTERVERSE
you want to start from scratch on a new plat­
form? Reputation systems are designed to be
THE eBAY REPUTATION SYSTEM IS LIKE AN ORGANISED confined to a specific context because this helps
companies sustain loyalty. However, it is only a
T
matter of time before there will be some form of he world of social media can be customer service staff who have been trained tive director of the Council of Small Business. He
RUMOUR MILL BUILT ON THE WISDOM OF CROWDS. network that aggregates your reputation capital
across peer­to­peer platforms. We’ll be able to
perform a Google­like search to see a complete
daunting to the uninitiated, but the
immense and growing popularity of
social sites means the corporate world
on how best to engage with our customers using
this medium.”
Smith says the account has more than 6000
describes social media as “great equaliser” for
small and medium businesses, who can now play
alongside the big dogs.
picture of how people behave and the degree to can no longer avoid engaging with it. followers. Customers use it for product infor­ But he says it is important to know what you’re
Zimride’s founders recognised that different BANK ON IT which they can be trusted, whether it’s around The trouble is working out how – and why – an mation, billing enquires, technical questions trying to achieve. “Ask yourself, what do I want?”
trust features would be necessary to allow their Reputation capital is becoming so important products they swap and trade, money they lend organisation can derive a business benefit from and general feedback. he suggests. “Do I want more people in my shop?
users to build a complete picture of what a that it will act as a secondary currency, one that or borrow or cars they share. As Craig Newmark, investing in such activity. On a personal level Smith uses tools that Do I want more people to purchase off my web­
driver or rider was really like. The first and claims “you can trust me”. It is shaping up as a the founder of craigslist, recently commented: Social media and business communications analyse social media sites, like Summizer, to site? Do I want more people to be aware of my
most important reputation mechanism on cornerstone of the 21st­century economy. Peo­ “By the end of this decade, power and influence expert Lee Hopkins has worked with companies monitor comments and get a feel for trends. brand and my location? If you do put in the time
Zimride is “closed networks”, which enable ple might eventually have a “reputation bank will shift largely to those people with the best such as IBM and Telstra to sharpen their media “I will also comment directly in an individual and create a campaign, be prepared for it to be
ride­sharing within specific communities, such account” alongside their financial accounts. reputations and trust networks.” 5 strategies. “The trick is to understand the blog on behalf of Optus if a customer is having successful. If people respond positively you need
as universities and companies (Wal­Mart and At the moment, it is difficult to transfer trust medium,” he says. “Communication is all about an issue,” he says. to be ready to fulfil the campaign’s promise, oth­
Cigna are users, for example) where people information and reputation scores from one Rachel Botsman is co­author of What’s Mine is culture change and it must be aimed at meeting Social media campaigns don’t have to be erwise you risk losing those customers forever.” 5
have something in common or can vouch for business to another. If you have invested time Yours, and founder of the consulting group CCLab. a specific business objective. If a specific tool expensive, but they do take a fair time commit­
each other. building your reputation on eBay, why would Feedback to boss@afr.com.au does not support a business goal then it has ment to work property, says Peter Strong, execu­ Rachael Bolton and Kimberley Church
The second reputation mechanism is Zim­ no place existing.”
ride’s integration with Facebook Connect and Many large organisations are starting to use
other social network profiles, so users can learn internal social tools to change the way they com­
about the person with whom they might want to municate with their own staff. Giam Swiegers is
share a ride. “The concept is simple,” Green says. the Australian chief executive of Deloitte, which
“Our parents had yearbooks; we have Facebook. TAPPING ONLINE COMMUNITIES FOR BACKGROUND CHECKS has created the largest enterprise­based Yammer 3 DAVID BURDEN CEO at technology and marketing company Webfirm
Zimride leverages the trust inherent to online community in the world. Yammer uses a short 3 Self­confessed social media junkie
social networks to push car pooling to become a messaging system similar to Twitter, but for 3 Uses: Facebook, Twitter, LinkedIn, Skype
mainstream form of transportation.” build a 360­degree, trustworthy uses a peer­to­peer reputation closed communities. A company can establish 3 Burden likes to keep personal and professional separate in the social
Finally, Zimride features a feedback system picture of your reputation system (just like on eBay). an account and its employees can exchange network sphere: “I use LinkedIn in for business. We’re fielding for a CFO at
where riders and drivers leave reviews after a trip through transparent, crowd­ Other parents award a star ideas, ask questions and source answers from the moment. I find it interesting to see how [prospective hires] are using
is completed, eBay style. sourced opinions. rating out of five and provide anywhere and anyone in the organisation. social media.” He uses Skype to call colleagues and clients, and Twitter to observe – he has sent
It would seem Zimmer and Logan got their reviews such as “I have no “I use Yammer at least once a week,” Swiegers fewer than 100 tweets. In the Twitterverse the shorter your personal moniker, the better your cred –
reputation system right; they have built a com­ hesitation in recommending X says. “It has allowed me to connect with young it means you got in early – and Burden’s is a ripper. “I have the name @DJB,” he says. “There are
munity of 350,000 users. Two years after launch­ for any babysitting job”, which people in a far more effective way than before.” a lot of DJs [disc jockies] in the US who use ‘DJ’ in their Twitter names. One offered me $US10,000
ing, they have a sustainable, fast­growing BUSINESS PEERS PITCH IN are visible to everyone. Swiegers also keeps a close eye on Deloitte TV, for my hashtag – but I wouldn’t sell.”
business – companies and universities pay a sub­ When you hire an employee, do The best and most reliable an internal YouTube­type channel. “It’s a great
scription to use the platform. Zimride is a power­ you ask for references, do a carers quickly rise to the top. place for our employees to express themselves
ful example of how the trust we establish Google search and check their and share their ideas.” 3 GREG MCAWEENEY general manager at RaboPlus, the online division of Rabobank
through virtual tools can be taken offline to Facebook profile, yet still find YouTube is the second most used search 3 Prolific twitterer
transform a service and create a new sector. yourself wondering what this SCREEN THE BABYSITTER engine in the world behind Google – users view 3 Uses: LinkedIn, Twitter, Facebook, Skype, blog
There are local examples applying the same person will be like to work with? Findababysitter.com helps about 13 billion video clips every month on the 3 McAweeney has posted more than 1000 messages on Twitter, mixing business
principles. Findababysitter.com.au (now part of That’s where Duedil (short for parents locate nannies, after­ video­sharing network. Hopkins says video is fast and personal messages in his feed. “Off to the #Leinster game in the Heineken
Fairfax Media, publisher of The Australian Finan­ “due diligence”) comes in. It’s a school carers and babysitters. emerging as a powerful tool for businesses Cup today. Trips back home always seem to coincide with #rugby,” tweeted the
cial Review and AFR BOSS), allows par­ browser application now in It connects people directly, across many different levels. “View as many as native Irishman recently. His top topics of social network conversation are Ireland, France, South Africa,
ents, babysitters and nannies to find each other. development (Duedil.com) for cutting out the fees of typical you can to get a feel for what can be achieved rugby, bank and Wales.
The site, established in 2005 by Delia Timms and profiles on the professional agencies. SING YOUR OWN PRAISES within your budget,” he recommends. “Video
Jeff Bonnes, uses a star­rating system to provide network LinkedIn. The site has more than 73,300 The “reputation statement of can be used for corporate training, marketing,
feedback on childcare workers. Users are prompted to answer carers to choose from, but how account” was designed by product pitches, or meetings.” 3 GIAM SWIEGERS CEO at Deloitte Australia
Freelancer.com.au links small businesses with two questions: “What is this do parents know which ones to Jason Tester, a researcher at the Michael Smith, managing director for Optus’s 3 Social media mystery
workers or firms to complete projects. Once the person best at?” and “How trust with their kids? Not only California­based Institute for the consumer division, says social media sites such as 3 Uses: LinkedIn, Yammer, Facebook, video blogs
jobs are done, the site allows the employer and could they improve?” You and are experience, skills, hourly Future, to measure social capital Twitter and Facebook have provided his organi­ 3 Prolific user of Yammer. Has a Twitter account with one solitary tweet,
freelancer to rate each other, on a scale of one to others can reply to the reviews rates, drivers’ licences, first­aid by contributions to peer sation with new ways of interacting with its directed at global chief executive officer Jim Quigley: “This is the sort of
10 stars, and provide detailed feedback. Users written about you by deeming qualifications, police checks and communities from Flickr to customers. “In mid­2009, we established a stuff partners will like to hear.” What, we wonder? Unfortunately, Quigley’s
get two ratings ­­ one as an employer and one as a them “fair” or “unfair”. references all readily available Wikipedia. dedicated team to monitor and respond to cus­ tweets are protected, and he has only 10 followers. Swiegers’ Facebook account is also blocked off
freelancer. There is also a list of the site’s top 50 The big idea behind Duedil is to but Findababysitter.com also Rachel Botsman tomer queries through the official @optus to the public, apart from his favourite quote: “The average never wins.”
members, rewarding good behaviour. Twitter account,” he says. “The team includes
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