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Innovation – Driven by Customer

01 Nov

Numerous studies demonstrate that 70-80% of all new products fail. Lack of relevance, lack of differentiation, inappropriate pricing and not-clear messaging all factor into a brand’s struggle when launching a new product.

However, the ultimate judgment of new products falls to consumers, who, ironically, are often absent from the development process. That development stage stands the greatest chance of generating transformative new ideas early on, before the brand has made a significant investment.

Product creation and adoption are enormously difficult. Not everyone can be like Apple. In fact, only 4 percent of the products you create will succeed past the second year of their launch. And big brands fail spectacularly, too. Witness the failure of Lifesavers soda pop or Ben-Gay aspirin.

Well, could the creators of Lifesavers soda or Ben-Gay aspirin have known that their products were going to fail? Well, yes. Consumer co-creation could have uncovered an important insight to prevent a product failure.

Over the last decade, consumers have helped brands to drive front-end innovation and generate their participation in all stages of a product’s lifecycle largely due to internet. Many brands are NOW investing in “customer co-creation” techniques to avoid late-stage product failures.

The brilliant concept of ‘Crowdsourcing’, in which a broad pool of consumers is invited to suggest ideas and/or respond to specific design challenges, has been widely adopted by marketers. The strategy can potentially shorten the time it takes to get new products to market, not to mention, can leverage an empowered consumer culture. For example, MyStarbucks.com uses an online e-suggestion box to solicit ideas from customers, who can also rate the ideas of others. The company then reports back to this “crowd” of engaged consumers when certain ideas move into development.

But with advantage come together are the disadvantages too. Here is why : For all its benefits — including a broad reach and a high volume of submitted ideas — this approach poses significant challenges. For some brands, the sheer volume of ideas can be daunting to review and assess, sometimes because these sites become prime targets for disgruntled customers to post their customer-service grievances. In addition, these sites’ public nature makes it easy for competitors to pounce first on promising ideas.

For this there is an alternative of ‘Private Communities’, where you interact with customer longitudinally, with a smaller groups (200-400). This format also enables community facilitators to lead an ideation and concept development process that is more structured — thus, potentially more fruitful.

Should You Involve Your Customers in Product Creation?

Regardless of whether you opt for a public or private approach, there are several factors to consider before investing in a co-creation initiative.

  • Recruit the right customers. Carefully consider the types of people from whom to solicit ideas. Think beyond their key demographics and consider recruiting them based on their creativity and problem-solving skills.
  • Use a structured approach. Don’t ask consumers what they want in a new product without giving them a structured brainstorming approach, or something to react to. Wide open, blue-sky approaches place too much pressure on consumers to produce what they think is “right” in your eyes. They’re more likely to apply principles and ideas from other companies to your product when they don’t have a structured approach.
  • Manage your expectations. Consumers can only produce ideas based on what they know — their needs — and are not equipped with the knowledge of what’s feasible from a financial and manufacturing perspective. Thus it’s crucial to have processes in place that enable internal R&D resources to vet, narrow down, and refine consumer-generated ideas.
  • It’s more about needs than solutions. Start by determining unmet needs or barriers. Then, feed those needs back to consumers to help inform their ideation process. The ideas your customers generate may not be production-ready, but you can use your understanding of those needs to develop consumer-relevant products of your own.
  • Seek fresh eyes in evaluating ideas. In addition to asking the people who submit ideas to also rate them, consider transporting those ideas to a different venue to get a fresh outlook.
For example, Unilever used face-to-face sessions with young men to develop a new brand extension for its AXE product, the AXE Twist.  Of course, AXE being AXE, the “focus group” included a lot of sexy fun for young guys in a get-away location for Spain – a totally appropriate way to get customer feedback given the nature of the AXE product.

Co-creation is an immature market. Although 80 percent of product strategy professionals use social media to engage with consumers, far fewer do so for product co-creation. And yet, consumers are interested in product co-creation. A private Forrester survey reveals that 61 percent of U.S. adults online are wiling co-creators. But to involve them, marketers must set expectations for the time commitment and reward the co-creators.

Reward need not mean a financial payment, either. Public recognition for helping launch a product can be a powerful incentive.

This way you end up involving consumers from the very beginning of Product life cycle. A product is for customer…and it should be By Customer too.
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1 Comment

Posted by on November 1, 2011 in Product Marketing

 

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One response to “Innovation – Driven by Customer

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