The Buzz on Customer-Driven Innovation May 30, 2007 Tap into your market to drive the next big idea
By Don Peppers and Martha Rogers, Ph.D.
Bees are social creatures. If one comes across a promising flower, it returns to the hive and does a dance to let the other bees know. Not any sweet-scented flower merits the dance; the bee will only perform if the nectar is good enough to merit a return trip.
The moral of the story? In the absence of communication among your customers, advertising rules. But once your customers communicate with one another, it's their experience that counts. We live in a world of blogs, vlogs and RSS feeds. We live in a time when 230,000 new users register with MySpace on a typical day. And the opportunities aren't lost on marketers. Research firm eMarketer says businesses will spend $1.6 billion on social network advertising in 2010.
Smart companies are tapping into social networks to spark innovation. Procter & Gamble is often recognized as one of the pioneers. It lists thousands of its patents on yet2.com, an online marketplace that brings buyers and sellers together to create new intellectual property. Published P&G reports credit the network approach with providing more than 45 percent of its new product introductions over the last five years. National Semiconductor, the analog devices and subsystems company, provides customers with an online platform that allows them to design their own product improvements; the customers contribute some 20,000 new product and service ideas each month. Meanwhile, survey Web site Hotspex compensates consumers who provide input on design ideas for leading brands.
These types of customer-driven innovation strategies go by a number of snazzy names: "customer co-creation," "open-source innovation" and "customer collaboration," to list a few. What they share is the ability to get enthusiasts and naysayers to actively shape how they will experience a product in the future. In return, the company gets a steady stream of fresh ideas from a collective brain trust of thousands of customers. An April 2005 IBM survey asked 750 global CEOs where their innovative ideas came from: 36 percent said customers, 41 percent said employees and just 14 percent said traditional R&D.
What can your marketing department do to get started? Give your bees dancing shoes. Make it easy, interesting and rewarding for customers to connect with each other and to engage with you. Self-help Web sites, customer feedback blogs, and third-party forums where designers and users can connect online are a few examples. By taking an active role in the innovation cycle, customers create the rewarding experiences they want. During the process, they pump innovative ideas into the organization. And who knows—they just might tell all their friends on MySpace. What nectar could be sweeter than that?
Don Peppers and Martha Rogers are founding partners of Peppers & Rogers Group, a division of Carlson Marketing, in Norwalk, Conn. Write them at edit@salesandmarketing.com.
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