note: this post was co-created with johnathan bonnell
Any color you want–as long as it’s black
Henry Ford, the enigmatic father of mass production, once said, “[A] customer can have a car painted any color that he wants so long as it is black.” This was the predominant sentiment among businesses in the early 1900s as assembly-line manufacturing emerged. Consumers accepted this one-size-fits-all mentality at first, because they could now afford things that had once been beyond their financial reach.
As consumers grew accustomed to this new normal, they began to express their opinions and reactions to these new products. “The ride is too bumpy,” or “The black seats are too hot,” were common complaints. But companies were very limited by their own manufacturing processes and had difficulty responding. They also weren’t used to the mentality of being told what to do. Companies were very comfortable with a top down approach, where they dictated consumer needs, take it or leave it. But the next one-hundred years would turn that attitude on its head.
If you don’t choose, you lose
Over time, the voice of the consumer was strengthened by easier and faster methods of communication. Manufacturing was evolving at a similar rate, creating ever more efficient and flexible processes. Competition began to emerge in every market, and to differentiate themselves from similar products companies began to offer the consumer something that had never been offered before: choice. And once they got used to having choices, there was no going back to just ‘black’.
Throughout the twentieth century, technology continued to close the gap between consumer feedback and product offerings. As communication methods improved, companies developed more advanced methods of soliciting, gathering and interpreting feedback. The one-size-fits-all attitude gave way to diversification and saw the rise of limited variety (like avocado stovetops). Companies were learning the basic demographics and honing their target markets. Competition drove innovation, which drove more consumer choice.
This feedback loop continued to tighten. Manufacturing got cheaper and more efficient, communication got faster and more aggregated, and companies now began to take note of psychographics. This led to the age of the brand. Consumer targets became fragmented, and products were offered to every perceived niche. Now instead of just tennis shoes, there were shoes for every sport imaginable. Email sped up the process of giving and collecting feedback. It was so much easier and faster to click ‘send’ than to lick a stamp and walk to the mailbox.
Complete control was still in the hands of the companies. The makers of these products chose who to listen to, and what to do about it. They made choices about how to present their brands and products, often based on more and more sophisticated consumer information.
Top down meets bottom up
As the World Wide Web came on the scene, companies like Nike experimented with more advanced customization. “Tell us what you want, and we’ll give you more choices,” they said. Why would anyone continue to go to Footlocker for conventional shoes when they could customize the laces, color, tongue, pattern, sole, and bottoms on the website, have their own shoe name embroidered on the side, and then have them shipped to their door? Once customers had been given the wheel, they wanted to drive. The tipping point had been reached: customers began to think of brands as something they owned. The century-old top down approach of the manufacturer was being challenged from the bottom up, by an ever-empowered group of consumers.
With convergence has come new opportunity: co-creation
Today the empowered consumer now enjoys a fast growing ecosystem of digital channels\infrastructure to tag, share, converse, signal, and read, and to do so with friends, family, people they hardly know and brands. At the same time, producers of products now have the flexibility to involve these consumers more deeply in the product ideation and creation process than ever before. The chasm between consumer feedback and product offerings has virtually been erased, and this convergence has created a new opportunity in co-creation: companies and consumers working together to co-create products, services, or improve upon an experience. We’ve found and believe that this co-creation can be consumer-led (where the consumer is deeply involved in almost the entire product creation process, a de-facto member of the product & marketing team) or brand-led (the direct involvement of the consumer ends with providing a new idea or suggesting an improvement).
For producers and brands, the type of co-creation they pursue depends on the level of risk they want to take on. Consumer-led has more risk because you are directly involving consumers in ideation, prototyping, testing, and creating alongside your own team. But the potential rewards of developing a successful product are much higher. P&G’s Connect + Develop program and Lego’s Mindstorm project are examples of consumer led initiatives. Brand-led co-creation has less risk because consumers are not actually involved in the product creation beyond providing insights and ideas. But the potential rewards in developing a successful product are lower. Dell’s Idea Storm and My Starbucks Idea are examples of brand-led initiatives.
Why care about co-creation: ideas, free, and market leaders
1. There’s no shortage of ideas: co-creating provides a new avenue for consumers to share their ideas, and a new “idea stream” for producers to tap into. It can also serve as a live testing ground for ideas that come from within a company’s walls. Dell’s Idea Storm has received nearly 12,000 posted ideas and implemented 350, while P&G’s connect & develop program has influenced over 35% of their new products in market.
2. It’s in the “free”: People are using their personal time to interact with a brand, to have discussions with like-minded consumers about a brand, and the companies are only paying for the venue. In addition to the tremendous volume of ideas being submitted, the amount of discussion taking place within idea streams is just as large. In both of these scenarios, consumers are choosing to spend their own personal time interacting with a brand, and companies don’t have to spend millions on advertising to distract someone for (hopefully) 30 seconds of their attention. Some My Starbucks Ideas have received over 1000 comments and their site has had over 2 million visitors since November 2008.
3. Co-creation could lead to market leaders: Johann Fueller and Eric Von Hippel, from the MIT Sloan School of Management, recently put out a report titled Costless Creation of Strong Brands by User Communities: Implications for Producer-Owned Brands. Their focus was to understand the emergence of community brands (a group of people who share similar passions and form a group identity, logo and brand name to symbolize this common bond) and their impact on traditional commercial brands. Near the tail end of their study they posed a very important question “Are community brands and commercial brands antagonists or complements?” and then showed us the results from a hypothetical choice experiment: 78.2% of respondents preferred a co-developed and co-branded product. This blew any singularly produced manufacturer brand (15% preference) or community brand (1.9%) out of the water. The study showed that a community brand contributed authenticity, identity and high-use expertise which was complemented well by a commercial brand’s strong product development and production capabilities. Consumers and brands could potentially co-produce and co-brand a product that has significant market potential.
If you are going to co-create: here are some initial thoughts:
Projecting a thought – can the future be co-owned?
With customers already beginning to think of brands as something they “own” and with more companies employing a form of co-creation for product development, is it really off base to assume a form of co-ownership (vested interest in the final product by both the brand and consumer) in the future? From what we are seeing take place already, we think it’s entirely possible. Companies like Apple and Best Buy are seeing the benefits in a form of co-ownership. Apple’s SDK for developers to create iPhone applications and using iTunes as a marketplace to market and sell these items is an example of how co-ownership could play out.
We work in volatility and with a digital infrastructure that is only continuing to grow in size and importance. Co-creation exists as an opportunity today; co-ownership is a potential outcome for tomorrow.
Co-created by Jason Theodor (@jted) and Johnathan Bonnell (@digitalinfant)
*Please note that our timeline of product creation is not meant to be historically accurate, but a general reflection of our observations.
*Those whose work/thoughts influenced us in the creation of this report:
Matt Rhodes’s brilliant thoughts on co-creation
JP Rangaswami’s ideas in faster horses in the age of co-creation
Johann Fueller and Eric Von Hippel for their excellent work and (public) report
Matt Milan’s thoughts on consumer product use in the future (@mmilan)
And Henry Ford for giving us the Model T and mass production
Originally Published for Critical Mass as From Chasm to Convergence: Technology Closes the Gap Between Manufacturers and Consumers Part 1 & 2 on Experience Matters