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.

Collaborative Marketing issues

From McKinseey Qarterly

Making internal collaboration work: An interview with Don Tapscott
https://www.mckinseyquarterly.com/Video?vid=4505

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--->

Marketing in crisis: what's the way out?

In his 2004 book Marketing As Strategy Nirmalya Kumar expressed his views on how the marketing profession can escape from the destructive route it is riding the last years and transform to a business activity that will regain the respect of the public and CEOs. If we believe the latest findings of the study conducted by the of the Fournaise Marketing group in 2011 not much has changed since: Marketers are still not seen by the majority of CEOs as a a real asset: "73% of CEOs think Marketers lack business credibility: They can't prove they generate business growth".
This is a worrying fact and a red flag that field marketers and academics should take seriously. We academics must realize that there seems to be a gap between what we teach our students in college, what they will be asked to do when they enter the field and what their CEOs expect from them. Field marketers on the other hand must understand the big change in the marketplace called customer empowerment. One of the symptoms of this change is the fact that the public is mistrusting marketers, mainly those insisting on monologues, one way communication and those who still think that they know better than their customers what they need and want.
One of the interesting issues highlighted in the report is the perception of  the majority of CEOs that "They (Marketers) are focused too much on the latest trends such as social media, because they believe they represent the new marketing frontiers - but can rarely demonstrate how these trends will help generate more business for the company".
Interesting remark but it should not surprise us, there are very few marketing activities that can really and clearly demonstrate how they help generate more business for the company, so in fact we do not talk about a new problem here.
To my opinion the whole issue is simple, many marketers never learned to be critical of themselves and were also never critical of trends and hypes. In a number of earlier posts in this blog I highlighted the Social Media "experts" explosion threatening to derail the social media marketing. The social media is indeed an important marketing landmark as well as an important social phenomenon; it is also a major challenge to marketers who have to learn new ways of dealing with the new customer. This simply means listening to the customer's (social) voice, engage customers and stop broadcasting; the customer is now the powerful party and the sooner marketers realize this the better.
Douglas McGregor wrote in 1960 book The Human Side of Enterprise where on the basis of the X - Y theory he urged organizations to pursue their objectives by engaging their personnel rather than managing it. That means to look for ways to develop and use the potential of their employees rather than trying to manage them by means of control and punishment. Marketers should in analogy look for ways to help their customers to meet their objectives and needs by listening to them, getting them involved in their business processes and becoming their advocates. This will be The Human Side of Marketing that the empowered customers expect to experience today.

So if we talk about a way out of the crisis in Marketing theory and practice the best course to follow is to get back to the basics: Listen to the customer voice and try to understand who the new customer is. This will help us marketers to transform our picture based on the mass marketing era and device ways to communicate with the customer on personal, individual level. A basic requirement here is to understand that we are not the powerful party any more and that our brand is not our property any more either. Successful business of the future will be those finding ways to engage the customer successfully, address the individual customer needs and use the customer intelligence as a source of innovation.

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.