Co-creating with customers is the way forward for innovation

Published on May 11, 2011

All companies small and large swear by ‘The customer knows best' philosophy.

But now they are actually willing to put their money where their mouth is by inviting the customer force to join them in the innovation game.

Yes, organisations have actually started tapping their largest resource – the customer base - to harness their enormous wisdom, insight, creativity and innovation.

This ‘crowdsourcing' is done by outsourcing the work traditionally performed by employees, etc. to a generally undefined large group of people (read: customers) through an open call.

The task can be anything from improving existing products to designing new products/services, creating content to solving problems or even finding a new name/logo/slogan for a product! The responders can be anyone from volunteers and amateurs to even experts in the field.

And why not – after all the customers are the ones who know your product best and can tell you the way things actually are in the real world.

In fact, this forms the best market research and that too at a nominal or even no cost.

People power: Big corporations have been successfully capitalising on the power of their customers. For example, toy maker Lego draws on its most fanatical customers to redesign its famous sets.

Dell has turned potential liabilities into increased profit margins by listening to the customer complaints! Even smaller companies have started experimenting with crowdsourcing to exploit the immense power of the consumers.

Such customer-led innovation offers multi-faceted advantages by cutting cost overheads as well as reducing the risk of new product failure.

Not only this, but involving consumers brings customer engagement to a new threshold as people feel that their voice is heard and that their opinion does matter.

This improves customer relations, generates customer loyalty and also increases word-of-mouth publicity from satisfied users. What's more, customers are actually expecting this now or they will just go elsewhere. As Jeff Howe, the person credited with coining the term ‘Crowdsourcing' says, ‘Increasingly, customers expect to have a say in the products they consume - especially Gen Yers.

Crowd is good: ‘Open innovation' is all around us what with crowdsourcing emerging as the faster, smarter and more creative way to improve business. But this does not mean that anybody can simply hop onto the bandwagon and instantly gain limitless ideas, priceless inputs or even a customer-friendly reputation.

In fact, companies have to proceed very delicately or their efforts can easily backfire with not only copious average and unremarkable suggestions that cannot really be used, but also lower customer goodwill due to the lack of positive follow up from the organisation!

Instead, organise a targeted crowdsourcing initiative in a structured environment where customers can successfully collaborate with your organisation.

Begin by first screening the customer suitability instead of simply using the whole mass available to you.

Select appropriate and useful people who are most likely to generate smart, realistic ideas or can provide valid, productive input. For instance, the youth are both more open and amenable to such forays.

Seek: Clearly define the problem, describe what you seek and explain how the customers can help. You can actually solicit any feedback from how consumers can get a better experience to how the product can be better marketed.

But do provide requisite resources for the work like appropriate information about the company, business capabilities, opportunities, problems etc.

While some top organisations/tasks may lure people just by the free publicity, ego boost and satisfaction, most others have to integrate incentives and rewards to encourage customers to spend time and efforts on the company's work.

Offering free gifts, vouchers, discounts, services or privileges can be quite persuasive at that too at nominal costs.

Give: Provide a constructive platform where people can contribute and cooperate of their own volition. You can use the traditional suggestion boxes, surveys and reviews or exploit the internet with its new social networking technologies.

This opens up a ready audience with easy and quick tools like blogs, forums, online communities or social media where you can invite users to offer opinions/suggestions, reveal expectations or concerns, comment on components, propose ideas or even vote on ideas posted by others.

Now your task is to filter and analyse the hordes of trivial responses to discover the brilliant and outstanding gems.

Meanwhile, make it a point to respond to the customers while bravely taking the negativity and criticism on the chin. Finally, do follow up to let the customers know how their efforts will be used and ideas will be implemented.

To sum up, co-creating with customers is the way forward. As a successful user exclaims, “The time and monetary investment were minimal, quality of responses phenomenal and the ability to control the creative process rewarding and productive. It's almost like a free shot!”

Moreover, as seasoned ‘outside innovation' consultant, Patricia Seybold observes, “I believe it (crowdsourcing) is imperative because it's not possible for any business to remain at the top of the game, and as innovative as it should be over a long period of time, by relying only on its own smart people, know-how and internal research and development capacity”.

Payal Chanania