Customer motives as online co-creation partners: a research paper

The discussion about innovation engaging the customer as co-creator (often described by terms like co-innovation, crowdsourcing, peer production customer, crowd-based outsourcing etc) is not new to many of us. One of the new and interesting aspects of co-creation is engaging customers in co-creation process using online tools (and social media in particular) as interaction platforms. There are several issues to be addressed here, one of them is finding the best persons / customers and get them on board. Motivations of customers to engaged in such processes are of vital importance. This was the topic of our latest research paper (co-authored by Carlota Lorenzo-Romero and Leonine Brünink) titled "Customer Motives and Benefits for Participating in Online Co-Creation Activities". The article that was accepted and will be published soon in the International Journal of Internet Marketing and advertising  attempts to give an answer to this issue. Based on a survey conducted among 239 young Internet users in Holland and Germany the factors described in the Uses and Gratifications Theory (and tested earlier by Nambisan, S., & Baron, R. A. (2009) for "traditional co-creation). We tested whether the benefits described int the Uses and Gratifications Theory (i.e. Personal Integrative Benefits, Hedonic Benefits, Social Integrative Benefits and Learning Benefits) are motivators for online co-creation and this seems to be the case. We  found out that about 28% of the participants have taken part in co-creation activities with businesses online, something in line with findings of our previous research.  We also identified two profiles of online co-innovators and found that males and Dutch are in general more motivated than females and Germans to participate in such activities. The differences based on ethnicity might have to do with the fact (and this is a personal observation) that in the Netherlands there are more opportunities for online co-creation activities than in Germany. With some caution for generalizations due to the sampling method we think that this study provides some
For those interested the abstract of the paper below:

Abstract

The widespread adoption of Web 2.0 applications, commonly known as Social Media, has brought about a new generation of empowered customers. Empowered customers are well-informed, knowledgeable and certain about their specific product and service needs; they are often willing to share their experiences, product knowledge and innovative ideas with producers, providing input for new product designs and enhancements. Such customer attitudes often labelled as co-creation, are forcing many companies to step away from the traditional firm-centric view of innovation and take a more customer-centric view by actively integrating customers’ ideas and knowledge in their new product and service development processes. Co-creation presents businesses with an interesting challenge: how to identify and recruit the innovative customers who willing to cooperate and share their knowledge as the basis for successful online co-creation activities.

This study identifies the various motivators for customers to participate in online co-creation. Based on the uses and gratification approach a pilot questionnaire is employed and its practical applicability is tested. The results indicate that customer participation in co-creation projects is motivated by four distinct types of benefits and  that co-creators differ in their motivational level. Finally, recommendations on how to adapt the questionnaire for future research and suggestions for further research issues are provided. 

References

Nambisan, S., & Baron, R. A. (2009). Virtual customer environments: Testing a model of voluntary participation in value co-creation activities, Journal of Product Innovation Management, 26(4), 388–406.

Constantinides E., Brünink L., Lorenzo-Romero C., 2014, Customers Motives and Benefits for Participating in Online Co-Creation Activities, International Journal of Internet Marketing and Advertising (forthcoming).

Forecasting innovation success and the O(ther) Information

I came across a recent article of professor Itamar Simonson and Emanuel Rosen titled “Market research can no longer predict what consumers will like”. 

An interesting remark in the article, not unfamiliar to many of us who follow the developments in the increasingly “social” marketplace: The changing consumer behavior and the increasing complexity of the decision making process due to the influence of Social Media content on consumers have changed dramatically the marketing landscape. This is something I keep repeating to my students and everyone else who follows my lectures on social media Marketing.  I usually explain the new situation in this domain using a well known and simple buyer's decision making model, something we find in every standard marketing textbook.   

My additions to the standard textbook model (see figure) are the elements C and D representing two new market information inputs that affect the customer decision: The information from the “broadcasting” web i.e. information about products, services or businesses poster in corporate web sites and the information from the “interactive” i.e. user generated content (UGC) in social media. What I underline always is the importance of this last element and its impact on customer decision making today. By all means this is a major influence factor of this process today. 

The article of Simonson and Rosen touches on a very important point that seems to confirm the view that the customer feedback in the form of social media voice is the most important part of this equation. They write the following trying to find an explanation for the inability of market research to predict the success (or failure) of an innovation like the iPhone when it was about to be launched:

“It’s easy to blame the market research firm for this, but this is not our point. We are trying to explain the inherent difficulties in assessing consumers’ reaction in this new era. First, more decisions today are impacted by what we call O sources of information—“Other” information sources, such as user reviews, friend and expert opinions, price comparison tools, and emerging technologies or sources—whereas market research measures P sources—“Prior” preferences, beliefs and experiences”.

The O sources are therefore a factor bringing instability and disrupts a well-grounded  method of producing information  needing in decision making namely the traditional market research.

What now? All hope is gone? I wouldn't say that, it is simply a question of adopting a new thinking and approaches to the marketing research issue. Together with my colleagues in the University of Twente and other colleagues abroad we are for some time now brainstorming on this specific issue: What is the way to create or predict successful innovations today. We set out to searching for other sources of customer information and sources of behavioral clues that can provide  much better input for predictions and guidelines for innovation than the traditional market research.  You can guess that we consider the social media as a major source of such information but this is not the only source we look to.  Since this discussion and our research design is still in progress I will not expand on this at the moment but I will keep you informed as our research progresses.

Co-Innovation, The Customer as Innovation Motor

In the SOMERE web site you can read my white paper on Co-Innovation. What is this? Co-Creation by means of Social Media platforms
http://www.somere.nl/wp-content/uploads/2012/10/Innovation-21-white-paper-final-Constantinides-1.pdf

Co-Innovation: The customer as innovation motor White Paper

INNOVATION IS A WAY OF FULFILLING changing customer needs by developing new and better solutions; it is also one of the most extensively discussed issues in the academic literature and field practice. Innovation has been identified as a necessary condition for survival and growth in an ever changing global world. Many corporations have based their market success on a continuous and consistent market leadership based on their innovative power and potential: IBM, Apple, Intel, Amazon and Google are well known pioneers in their markets. Under increasing competition and market pressure the innovation process has been subject to important transformation during the last 30 years; from being traditionally a “closed’, internal process, based on internal organizational expertise and structures (R&D, New Product Department, New product Management etc.) the innovation process is increasingly becoming externally oriented. Chesbrough (2003) popularized the trend of externalizing the innovation process by engaging innovation partners in what he called the Open Innovation model...  Read the rest in my new White Paper by downloading it in the SOMERE.nl web site or clicking to the New Publications--->

Public Crowdsourcing Portals (PCP*): Harnessing the collective (or rather the individual) intelligence

You are a big or small company and you are confronted with problems like the following: You look for a method of specifically binding DNA, you need urgently a new method for hair root removal or you are desperate to find how to sample leaf tissue**! You do not have the expertise in-house so what do you do? You try to find another company having the solution and make a deal about royalties to use their technology (something that can be quite costly)or you find and hire someone who can find a solution for you, right?

Wrong! You can get tens or hundreds of solutions and choose the best by placing a challenge in the crouwdsourcing site INNOCENTIVE; this will cost you between $ 5.000 to maybe $ 100.000 that is the fee you decide to pay to the one who will find the best solution for you.
Does this work? Just go to the Innocentive site and look for yourself.

This form of crowdsourcing becomes very popular in a fast pace. Next to proprietary crowdsourcing focused on customer creativity an increasing number of Public Crowdsourcing Portals like Innocentive match the supply and demand for very specific technical or non-technical knowledge. Some more examples of this new type of Social Media (I will update my Social Media Strategies model with this new Web 2.0 application soon) are Yet2Come, Innovation Exchange and the Dutch Battle of Concepts targeting creative students that I mentioned in an earlier post.

Is this development good or bad news for professionals? I think both depending how you look to it. I have the idea that this will be soon an issue of more general concern soon. Let's wait and see. *Do not look for this term in Wikipedia, this is a term I thought of it just now!
**All these are real problems of real companies

Distributed co-creation: the next step in Innovation

In a number of my recent research papers, my lectures and also posts in this blog I have tried to underline the importance of using Web 2.0 applications as means for taping into the customer creativity also known as crowdsourcing. This option has two variants, either using the customer creativity in order to create advertising concepts or participate as innovator. An interesting article by professors S. Read and D. Robertson titled " What is the next big Innovation in Innovation ?" was published some time ago in the IMD web site.

Crowdsourcing: utilize the customer's creativity

Taping the Customer Creativity (also known as Crowdsourcing) is one of the elements of my model outlining the main ways that marketers can engage the Social Media as Marketing tools.

Many examples of such initiatives are already known to those who follow what happens in the Social Media space. Most applications ( RedisignMe, Dell, Nokia, Samsung, TomTom, HP, Talpa, Google Android KLM, Starbucks, P&G, Robeco, threadless, LEGO, SAP, Kodak and many others) are focused on utilizing the customer wisdom in order to innovate. Another way to utilize the customer creativity is to ask customers to design advertisements for you or even commercials. A pioneer in this area is Current where amateur videos that appear on TV win money. Here in Holland we have also some interesting examples. A few months ago Nespresso tested two commercials as to the viewers' opinions before one of them appeared on TV (Source: MarketingFacts.nl)

Another nice example of using customer creativity is the Battle of Concepts , a Dutch (at least till this moment) platform allowing companies to organize competitions (mostly among creative business students) for solving real business problems. The site is getting very popular among students who can win up to 5.000 Euro but also among lecturers who can find there real case studies for their students! (I think to try this next year). Last but not least a new site called Creatad offers creative amateurs the possibility to make money by designing advertisements (printed or videos). I wonder if the American Marketing Association will be obliged to come soon with a new Marketing Definition taking into consideration the interactive nature of Marketing today as well as the way the New Marketing is creating value for the customer who becomes slowly marketer himself!

The New Innovation Wisdom

An interesting article (also in videocast) from Google's chief economist Hal Varian in the McKinsey Quarterly. Varian explains the many effects the web has on industries and calls managers to re-think of conventional thinking. Useful note for everyone involved in innovation today

Venture Lab Twente: a new initiative to promote entrepreneurship

VentureLab Twente (VLT) is an advanced training facility for people who take seriously their entrepreneurial ambitions. The mission of the Lab is to help “ techno-starters” and knowledge-intensive businesses to enter the market and succeed. VLT welcomes participants with concrete business ideas who feel that they miss certain commercial capabilities necessary for building-up a successful business.
Participants without concrete plans or clear business ideas are also welcome to join. A particular advantage of the VLT program is that it helps aspiring entrepreneurs to discover viable business opportunities.
At VentureLab Twente, entrepreneurs work in teams to develop a successful high-tech company. Participants receive support from academics, consultants and students from the entrepreneurial University of Twente and the Saxion Universities of Applied Sciences Seminars by internationally renowned trainers, carefully planned personal coaching, access to newly developed technologies, access to a network of international companies and last but not least access to venture capital are some of the elements of the VLT approach.

Those interested can join one of the INFORMATION MEETINGS.
CHECK http://www.venturelabtwente.com/ AND REGISTER NOW!