Some of the biggest brands are turning to customers to help speed up product development.
Even retailers and suppliers who strive to be customer-centric might balk at opening up product development to consumers, but some global brands feel it’s a risk worth taking. This phenomenon started with crowd-funding websites such as Kickstarter and Quirky and helped create new types of engaged customers: ‘presumers’, who engage with products and services before they launch; and ‘custowners’, who invest in the brands they love and buy from.
Migros, Switzerland’s biggest supermarket chain, decided to engage consumers on an online forum, Migipedia, through which shoppers can rate 13,000 of its own-brand products, suggest improvements and vote for new lines. Active members are rewarded with points and ‘product godfather’ status. Since its 2010 launch, Migipedia has amassed around 30,000 members who have submitted more than 15,000 product ideas and 130,000 pieces of feedback.
Lego invites fans to submit ideas for toy sets via its Cuusoo website, which attracts more than 500,000 unique visitors per month. Winning inventors receive 1% of royalties from their sets’ sales. The advantage for Lego is that this approach enables it to launch products faster and be more confident there is a ready-made audience for its new products.
One set, based on the popular online game Minecraft, took six months to hit the shelves, rather than Lego’s usual two-year product development period. Cuusoo draws in visitors with a variety of interests, from loyal fans to those more interested in themes, such as aficionados of Back to the Future, who wanted a model of the DeLorean time machine from the movie.
“We’re very interested in ideas from fans that [are] weird, which wouldn’t have survived the product development process,” Lego New Business Group Senior Consultant Tim Courtney has said. “If our fans can tell us there’s demand, why wouldn’t we consider it? And if we turn it into a runaway success, that will show the value of listening to our consumers.”
"This strategy is an evolution of the focus group, but you are getting deeper insight and more reach at a fraction of the cost”.
Matt Sevenoaks, KPMG in the UK, Global Crowdsourcing Lead
“Brands are using open and closed online communities to de-risk product development and cut time to market. Customers that engage and collaborate in this way have stronger brand affinity and loyalty,” he says.
“If you want people to really engage with your brand, you need to make a connection with your consumers and make the purchase an emotional experience. This way of working is picking up pace across all sectors. Brands that don’t join the fray may not deliver services and products that meet customers’ needs.”
The longer-term challenge is whether resumers and custowners will help firms launch products that are radically different. The Sony Walkman, ATMs (“too impersonal”, complained potential customers), and Seinfeld, America’s most successful sitcom, were all nearly stifled before launch by hostile feedback from focus groups.