Hi Everyone!
I received some follow up questions from the presentation I gave at last Friday's Center for Brand and Product Management Fall Board meeting. Here is a bit more background on the research that I have done on Consumer Co-Creation for Innovation.
Consumers' Expectation are Changing: Across all industries, consumers expect to be a part of the Innovation process. Yet, for the most part, their only option is limited personalization of existing goods. Consumers don't just buy a bear, they Build-A-Bear. Consumers personalize their running shoes and customize their M&Ms.
Companies Need to Change Their Approach Towards Innovation: Companies currently practice what I call Innovation Validation, which means they ask consumers to provide feedback on a select group of options that the company developed (ex: they ask a focus group to rank new product concepts). If companies want to truly engage consumers in co-creation, they need to adopt a philosophical shift and move towards Uninhibited Innovation. This is where companies ask consumers to tell them what it is that they want (ex: give the consumers a blank sheet of paper).
Communities Vary In Their Level Of Consumer Involvement In Innovation: Not all Online Communities are created equal in terms of their ability to involve consumers in the Innovation process. Some are more geared towards co-creation than others. Below is a Spectrum of Community Involvement for Innovation as well as the definitions of the different buckets I have created.
Repository – Brand provides information for consumers to obtain. Brand does not openly solicit feedback.
• Iams provides consumers with information on products, nutrition, and pet care.
Suggestion Box – Brand provides opportunity for consumers to submit ideas. Consumers receive little follow up.
• Mystarbucksidea.com allows consumers to post, vote, and discuss ideas.
Source of Empowerment – Consumers act as an extension (and on behalf ) of the brand to educate / influence other consumers.
• Virgin Mobile leverages its Insiders group to educate other consumers on the brand, promote local venues, and provide feedback back to the brand.
Vested Panel – A consistent group of consumers primarily used as a standing focus group to contribute and react to ideas.
• Kraft’s online community provided insights on product development, advertising, and in-store execution for the South Beach Diet product line.
Launch Pad – Consumers participate in a major function of the brand (design, advertising). The brand would not exist without consumers and consumers’ ideas would not come to fruition without the brand.
• Threadless empowers consumers to upload and vote for their favorite t-shirt designs. Winning designs are mass produced and sold.
This spectrum bucketed communities based on three criteria:
- Communication Flow
- The Brand's Relationship with the Consumer
- Consumer Activities
This criteria is fluid and works together to increase Community Involvement in the Innovation process.
Communities Can Be Strategically Incorporated Into the Entire Innovation Process: When developed and managed correctly, communities can be leveraged for Ideation, Product Development, Positioning, Packaging, Advertising, In-store Execution, and Feedback.
Not For Everyone: Some industries will struggle to implement Uninhibited Innovation, while still managing consumer expectations. For example, the food industry requires different manufacturing lines to develop different product offerings. Because capital investment is high, a company may not be willing to invest in new machinery for potentially small batch sizes. In order to manage consumer expectations, food manufactures would need to limit the scope of Uninhibited Innovation to things that would require little additional investment.
This can ultimately lead the manufacture to invite consumers to develop the next line of energy drink, but put so many constraints on it, that they essentially only allow the consumer to come up with the next flavor.
Thoughts? This is still pretty new. Most of the research suggests that consumer online communities can only be leveraged in the digital industry. While it is much easier for these companies, it is possible for other industries to successfully implement and leverage these communities. Kraft leveraged their online community with the introduction of the the South Beach Diet product line. As a result, sales reached $100 Million in just the first 6 months of launch.
From our experience at Johnson & Johnson, involving customers in innovation is essential. We prefer a more structured approach where customers are taught a systematic set of tools, then directed to innovate within a specific product usage situation. It works! See: www.innovationinpractice.com
A very interesting typology! Clearly, co-creation comes in many different forms and varieties. One important distinction among hese various may be the ability and motivation of their targeted customers to provide meaningful contributions. Some (perhaps most) customers lack these qualitis. The key question is can a firm educate its customers to be contributors?
I think you would be suprised at how motivated consumers can be to contribute content that they are passionate about. Truely motivated consumers are willing to take the time to learn how to contriubte. Smart firms are finding way to help facilitate this process, by creating design templates and activities to spur creative thinking.
We are just starting to see where consumers can best contribute. The most important thing a company can do is keep an open mind. Consumers will find a way.
I'm curious to learn more about some successes that have come from this approach. All too often, researchers are told not to rely on consumers for ideas since they never know what they want or their ideas are lame. At least, this has been my experience.
P&G is doing something similar to Uninhibited Innovation; however, rather than give consumers a blank sheet a paper it gives consumers a half-finished prototype. Because consumers don't see a finished, sleek product they feel more comfortable critiquing the product.
I know that you said this works better in some industries better than others. Nike is known as an innovative company but more in the vein of "I didn't know I needed it, but now can't live without it". Do you think leveraging a brand community would be effective in such an industry? They do leverage comments, critiques and feedback from their elite athletes but not the general consumer.
thanks for sharing your own experience and the practice in real world. actually, it is really hard for traditional companies like cpg companies to looking for a breakthrough method on consumer study and product innovation. another thoughts is that maybe these companies should strengthen their IT department and enhance its function from technology maintainance to higher level like more involvement with business solution etc...