It is increasingly evident that consumers no longer care to wait for companies to have their say on new products. Consumers want to be heard earlier in the process of developing products and exert more influence on the products they are going to use. The Internet, particularly Web 2.0 and its interactive methods and tools, is clearly playing a key role in facilitating and enhancing this mode of consumer behaviour.

The engagement of consumers in the process of new product development (NPD) can be viewed as a facet in the broader phenomenon where consumers are mixing production and consumption activities, known as ‘prosumption’. Tapscott and Williams contend in their book on “Wikinomics” (1) that many consumers seek to turn from passive product users into active users who also participate in the creation of the products they use and influence their design and function. But the type of involvement hereby referred to goes beyond the personal design of selected features of product items by consumers for their own use, as applied in mass customization; the contribution made by consumers (‘prosumers’) collaborating with companies in NPD is meant to positively affect many consumers other than themselves.  Tapscott and Williams suggest that companies should encourage their customers to contribute in more profound and significant ways to the design of products that may thereafter be marketed to many more users.

Agreeably, consumers differ in the extent and quality of contribution they are capable to make as function of their knowledge and skills in the domain of every product, and therefore consumers should be invited to collaborate in forums and with methods more appropriate for them. The forms of collaboration may vary from consumer participation in NPD research to generating ideas in social media forums and up to more extensive proposals of technical designs of product prototypes. As collaboration gets more advanced and significant it can greatly help — in addition to co-creating improved products — also to produce closer and more valuable relationships between a company and its consumers or customers. More advanced collaboration has the power to elevate relationships to a form of “partnership” and to increase the level of their strength and intimacy between a company and its more loyal customers.

In an instructive and interesting paper on Internet-based collaborative innovation, Sawhney, Verona, and Prandelli present methods which they classify by the nature of collaboration (breadth and richness) and the stage of NPD in which the given level of consumer involvement is applicable (e.g., front-end idea generation and concept development, back-end product design and testing)(2):

• Deep-rich information at the Front-End stages: Discussions in virtual communities of social media that encourage exchange of ideas allow companies to capitalise on social or shared knowledge of consumers. Another method that relies on consumer-to-consumer communication is Information Pump, a type of “game” through which a company can reveal and better understand the vocabulary of consumers in describing product concepts vis-à-vis expressions of needs;
• Reach a broad audience at the Front-End stages: Web-based conjoint analysis and choice techniques can be applied among consumer samples to gather and analyse relatively less rich but well-structured information about consumer preferences;
• Deep-rich information at the Back-End stages: Web-based toolkits for exercising users’ innovation let the more expert consumers configure or design original product models of their own creation, working in a specially built environment and with computer-aided design tools — this approach relies on knowledge of individuals;
• Reach a broad audience at the Back-End stages: Particularly applicable to digital products (e.g., software, web-based or mobile applications, video games) where prototype or experimental beta versions can be tested online; however, visual-simulated depictions of alternative virtual configurations of advanced prototypes can be applied to test and evaluate the acceptance of a wider range of tangible products.

In the virtual world of the Internet, unlike the physical world, there is a less rigid trade-off between breadth of access to consumers and richness of information (e.g., small focus groups versus surveys of large samples); this advantage is stated by Sawhney et al. “…Internet-based virtual environments allow the firm to engage a much larger number of customers without significant compromises on the richness of the interaction. ” This advantage is particularly demonstrated in social media forums.

It should be emphasised, nevertheless, that new methods of collaboration should not come in replacement of  NPD research methods; research-based methods and non-research methods of consumer-company interaction can wonderfully complement each other and should continue to be applied in parallel to answer different requirements of the NPD process for consumer informational input and aid. In a leading paper for the new age of NPD research, “The Virtual Customer” (3), Dahan and Hauser describe state-of-the-art research methods and techniques for different stages of the NPD process. They distinguish, for example, between (a) conjoint types of measurement techniques and models that are most suitable for guiding product design at an early stage (feature-based), and (b) a method applicable for testing the appeal and purchase potential of candidate prototypes (integrated concepts) at a more advanced stage of product development. The latter method in particular takes the advantage of displaying images of virtual prototypes (e.g., SUV car models) to consumers , supplemented by additional product and price information, in an online survey for testing  reaction (choice) before going to production. They also explain in great detail unorthodox methods such as the Information Pump and Securities Trading of Concepts.

• It is noteworthy that most research methods concentrate on learning from consumers about their preferences without engaging them in proposing product designs; the User Design method, however, already gives more leeway to consumers-respondents to construct their desired products using a self-design tool similar to mass customisation.

Forums or personal pages in public social media networks are widely accepted these days as an excellent arena for companies to receive ideas from consumers for new products and gather information about their product preferences and expectations. However, it is likely to turn out as a formidable task to comb and pick-up ideas of real value and practical potential for implementation from these sources as well as user-generated-content in blogs. Some good ideas may also get lost in the river of postings or comments customers upload in a company’s page on service issues, billing etc.. Dedicating a special separate page for interaction with consumers on new products, goods or services, can help to raise the level of ideas formulated and to allow peer discussions on those ideas that can lead to their further progression. But even then, the ideas proposed in such a venue may be mostly initial concepts, vague or unfocused. Such a venue is a good place to start, allowing any customer interested to contribute. Thereafter, owners of more mature or promising ideas may be referred to a company-owned virtual forum on its own website where a more advanced collaboration with the consumers-contributors may be developed.

Managing collaborative activities for NPD in a company-owned website division can offer some valuable possibilities. First, it provides better control and capabilities for moderating discussions among users or interacting directly one-to-one with the originators of product-concept proposals; it would be an environment dedicated by the company and designed by it specially for interacting with users and among themselves. Second, performing collaborative activities in this environment is likely to attract users with higher level of knowledge, competence and interest in domains of the company’s products; greater proficiency of users demonstrated in their discussions frequently leads to natural screening-out of novice and less serious users.

Third comes the sensitive issue of security and protecting intellectual property. Companies do not tend to guarantee any protection for initial ideas brought up by consumers, not even in their own websites. Particularly in forums that are founded on sharing knowledge and discussion of ideas between users, information has to remain transparent and accessible to participants and to the company. Tapscott and Williams noted that consumers get excited by the creation of their own products and enjoy it even better when they can do it together (4).  However, companies can offer some better measures to secure information such as limiting access to discussions and materials (e.g., by password permission) and preventing unauthorised extraction of content. Where proposed designs of product models are meant to be shared, originators should get the option to credit their models with their IDs. Confidentiality and rights are offered for the most progressed technical designs that are planned to be adopted by a company for manufacturing and marketing.

Fourth, a company can provide an interactive toolkit for innovation on its website for consumers-collaborators who wish to take their ideas and concepts one step or more further. With the toolkit users can apply relevant design tools to sketch plans and construct virtual 3D product models. Depending on type of collaboration program and context, users can allow their proposals to be available to other users or to the company alone. Thomke and von Hippel proposed a complete process for customer innovation that includes several iterations of developing a design with a ‘toolkit for innovation’, building a prototype, receiving feedback from the company (‘test’), and return for revisions (5). Through early iterations the prototypes built by the system would be virtual, until the design is satisfactorily advanced to manufacture a physical prototype of the product. The authors suggest that the customer-led process is likely to require fewer iterations than in a ‘standard’ NPD process, save time and money, and free the company to invest more effort in improving manufacturing capabilities.

Different schemes have been devised for collaboration programs with customers:

• The Open Innovation Collaborative Programme of Unilever, for example, is designated for highly skilled contributors with extensive knowledge in the domains of products for which they invite proposals (list of Wants, e.g., solutions for detergents). Collaborators are referred to a special portal for submission (in co-operation with a consulting firm yet2.com that manages the review process).
• Other programmes are more popular in nature and appear suitable to a wider audience of consumers with varied levels of expertise. Take for instance the Create & Share collaborative suite by Lego on its website. More than a decade ago Lego cleverly realised with appreciation the creativity of its leading hobbyists and enthusiasts (adults included!) who invented original models based on existing parts and suggested new forms of Lego blocks; Lego started to accept such designs and offer new models’ sets and less conventional building parts. The online suite includes today a gallery of models built by fans, message boards, and especially the Lego Digital Designer toolkit application for constructing virtual plans of fans’ own models (unfortunately Lego has terminated last year its ByME customization program that allowed users to order their own physical models).

Consumers who collaborate with companies should be rewarded for their more significant contributions of ideas and products designs. On the one hand, the reward does not have to be monetary, cash-in-hand (some may not even want to be perceived as paid contributors/employees). On the other hand, companies should not get satisfied by relying on enjoyment of contributors and their feelings of self-fulfillment and accomplishment. Furthermore, a company should not appear to be relinquishing its duties in generating genuine ideas and developing new products to its customers. First, many customers will be happy to receive credit by name in recognition of their contribution in the company’s publications and websites. Second, contributors can be rewarded with special gifts or privileges in obtaining and using their own-designed products and other products of the company. Monetary prizes will probably continue to be distributed to winners in competitions.

Collaboration for innovation changes the relations between a company and its consumers or customers because it gets them to work together, co-creating new products that thereof better fit consumer needs and wants. Particularly activities that engage consumers in developing concepts and designing products have the better potential of narrowing gaps between companies and customers.  Research, collaboration in other ways, and internal development by professional teams within the company should be used together in integration in NPD activities.Collaboration shifts the balance of control more towards the consumers, but companies who learn how to share knowledge and competencies with the latter can gain in improving innovation practices, increasing value, and not least, enjoying stronger customer relationships.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “Wikinomics: How Mass Collaboration Changes Everything“, Don Tapscott and Anthony D. Williams, 2006, Portfolio.

(2) “Collaborating to Create: The Internet as a Platform for Customer Engagement in Product Innovation”, Mohanbir Sawhney,  Gianmario Verona, & Emannuela Prandelli, 2005, Journal of Interactive Marketing, 19 (4), pp. 1-14 (DOI: 10.1002/dir 20046).

(3) “The Virtual Customer”, Ely Dahan and John R. Hauser, 2002, The Journal of Product Innovation Management, 19, pp. 332-353.

(4) Ibid. 1.

(5) “Customers as Innovators: A New Way to Create Value”, Stefan Thomke and Eric von Hippel, 2002, Harvard Business Review, 80 (April), pp. 74-82.