Crowdsourcing for innovation.

Numerous studies demonstrate that 70-80% of all new products fail. Lack of relevance, lack of differentiation, inappropriate pricing and muddled messaging all factor into a brand’s struggle when launching a new product.

However, the ultimate judgment of new products falls to consumers, who, ironically, are often absent from the development process. That development stage stands the greatest chance of generating transformative new ideas early on, before the brand has made a significant investment…

Over the last decade, the Internet has enabled consumers to help brands drive front-end innovation and generate consumer participation in all stages of a product’s lifecycle. Many brands are investing in “customer co-creation” techniques to avoid late-stage product failures.

Crowdsourced co-creation, in which a broad pool of consumers is invited to suggest ideas and/or respond to specific design challenges, has been widely adopted by marketers. The strategy can potentially shorten the time it takes to get new products to market, not to mention, can leverage an empowered consumer culture. For example, uses an online e-suggestion box to solicit ideas from customers, who can also rate the ideas of others. The company then reports back to this “crowd” of engaged consumers when certain ideas move into development.

For all its benefits — including a broad reach and a high volume of submitted ideas — this approach poses significant challenges. For some brands, the sheer volume of ideas can be daunting to review and assess, sometimes because these sites become prime targets for disgruntled customers to post their customer-service grievances. In addition, these sites’ public nature makes it easy for competitors to pounce first on promising ideas.

Therefore, private communities act as alternatives to public customer ideation sites. Privacy removes the threat of the poaching competitor and allows companies to longitudinally interact with a smaller group of customers (typically 300-500). This format also enables community facilitators to lead an ideation and concept development process that is more structured — thus, potentially more fruitful — than the e-suggestion box approach. Finally, a private environment can provide a more intimate setting for open and honest discussion of product challenges.

Should You Involve Your Customers in Product Creation?

Regardless of whether you opt for a public or private approach, there are several factors to consider before investing in a co-creation initiative.

Recruit the right customers. Carefully consider the types of people from whom to solicit ideas. Think beyond their key demographics and consider recruiting them based on their creativity and problem-solving skills.
Use a structured approach. Don’t ask consumers what they want in a new product without giving them a structured brainstorming approach, or something to react to. Wide open, blue-sky approaches place too much pressure on consumers to produce what they think is “right” in your eyes. More importantly, when consumers don’t have a structured approach, they’re more likely to apply principles and ideas from other companies to your product.
Manage your expectations. Consumers can only produce ideas based on what they know — their needs — and are not equipped with the knowledge of what’s feasible from a financial and manufacturing perspective. Thus it’s crucial to have processes in place that enable internal R&D resources to vet, narrow down, and refine consumer-generated ideas.
It’s more about needs than solutions. Start by determining unmet needs or barriers. Then, feed those needs back to consumers to help inform their ideation process. The ideas your customers generate may not be production-ready, but you can use your understanding of those needs to develop consumer-relevant products of your own.
Seek fresh eyes in evaluating ideas. In addition to asking the people who submit ideas to also rate them, consider transporting those ideas to a different venue to get a fresh outlook.