I've written a lot about co-creation over the past 9 months, demonstrating how it helps consumer product strategy (CPS) professionals develop better products. A majority of companies are not yet using social technologies to involve consumers in the product development process, but that will soon change. We expect an increasing number of companies to move from the education phase into the experimental phase in 2011 and 2012 -- or risk being left behind while their competitors move forward. Why do we expect co-creation to take off over the next two years? The research provides a compelling case:
CPS pros recognize the value of co-creation. Even though uptake is far from ubiquitous today, CPS pros recognize the transformative properties of co-creation. Seventy-two percent of product strategy professionals believe social technologies will enhance their existing capabilities of using customer input to shape product strategy.
While co-creation is certainly a hot topic these days, the fact is that for most companies, social co-creation is relatively immature. Based on a panel survey of consumer product strategy professionals conducted in Q2 2010, just 38% of companies use social media to to involve consumers directly in the product creation or innovation process (that is, 46% of the 83% of companies who engage with consumers using social media). Consumer product strategy professionals who are using social media assets to enable co-creation are doing one or more of the following:
Engaging with fans on Facebook, Twitter, corporate blogs and public communities to generate ideas and opinions about products and services;
A vocal group of people who hated the new logo raised a big stink via social media channels (Facebook, Twitter, blogs, etc.).
Via Facebook, Gap thanked the masses for the "passionate debates" and asked fans to submit their own ideas for new logos but did not provide any further details around this alleged crowdsourcing project, particularly with regard to incentives or compensation.
The idea of Gap requesting "spec work" from fans/consumers/designers under the guise of crowdsourcing caused another wave of dissent, further amplifying the voice of those who disliked the idea of changing the logo.
By October 11, Gap put the kibosh on the new logo and the crowdsourcing project, and reverted back to the traditional blue box logo.
Ever heard of social co-creation contests? These are online contests sponsored by a company (and often hosted by a vendor) whereby a question or problem is posed to an audience, with an prize given as an incentive for participation. A simple example: a company wants a new logo, and offers $500 for the best design that conveys the company's image. The host vendor publishes the contest, and its cultivated audience of design artists contribute ideas. The company may pay the same amount of money for the logo design, but the contest generated many ideas from which to choose.
But co-creation contests can tackle bigger problems. Just ask Starbucks.
Starbucks cares about its environmental impact, and works hard to be "green." One area of ongoing concern for the company is the amount of waste generated from disposable cups -- a concern shared by partners at the betacup, who had been raising awareness of this problem since May 2009. Shaun Abrahamson (from Mutopo) and others from the betacup approached Starbucks with the idea of sponsoring a co-creation contest. Starbucks put up the $20,000 prize money, and betacup partner jovoto (a social co-creation contest vendor) launched the contest to its cultivated audience of creatives (although anyone was able to access the site and participate in the contest). The contest ran this summer, and the winners were announced in July. (Clients, click here for a complete case study.)
In a prior post, I told you that 83% of companies use social media, but fewer than half of those have product teams that are currently using social media to influence product design, creation, or strategy. In that report, I also divulge that 72% of consumer product strategy (CPS) professionals claim that social media will enhance their existing capabilities of using customer input to shape product strategy. I've also posted about how social co-creation is an important opportunity for consumer product strategy (CPS) professionals -- and it's something that some, but not all, of those companies who are active with social media use. For those CPS pros who are not actively engaging in social co-creation, a common question is, "Do consumers want to co-create? And will they want to co-create with me?"
Today, Ford announced that the hybrid version of its Lincoln MKZ luxury sedan will carry the same price tag as its gas-only version.
Ever since hybrid cars first became available, they have carried a premium price tag, which has in many cases been offset somewhat by tax incentives for the buyer (which ultimately help the manufacturer by driving demand for these new yet up to now pricier vehicles). (Here's a brief rundown of the cost differences between some manufacturers' gas and hybrid models.) Ford's news breaks that model by removing the hybrid pricing premium. But if you add in the consumer tax incentive, the hybrid vehicle now becomes substantially less expensive -- and with better gas mileage, its operational costs should be lower, too. It's a win-win for the consumer. But is it a win-win for Ford?
Clearly, it's a brave and bold move. By offering price equality between the two models, Ford will raise awareness of the Lincoln brand and (it hopes) drive additional sales, which would lower the overall per-vehicle cost. Also, the tax incentives for hybrid vehicles vary by make and model, and they are phased out by the IRS based upon the quantity of vehicles sold, as reported by the manufacturer. Without the tax incentive, only consumers who drive a LOT of miles would be able to make up the difference in cost for a premium-priced hybrid car based on increased fuel efficiency.
I've been a closet Corvette fan ever since I was a kid. I went with my step-dad to the Corvette Corral in Bloomington, Illinois every year, admiring the cars on display, marveling at how they changed over time. (I've always been partial to the 1958 model, red with white sidewalls, in case you were wondering.) One thing that became clear to me that continues to this day: Corvette fans aren't just car geeks, they are Corvette geeks. And yesterday, GM gave those fans a gift.
In its announcement, Chevrolet revealed a new strategy for selling its revered Corvette: for an extra $5,800, those who buy a 2011 Z06 (top) or ZR1 (bottom) can go to General Motors' Performance Build Center in Wixom, MI and build the actual LS7 or LS9 engine that will sit in the car they buy. That doesn't mean they will watch someone build it -- the customer will actually assemble the engine (under the watchful eye of an engine expert, natch). What makes this possible is the fact that every engine for these cars is already hand-built (something I did not know prior to today).
As Tom Stephens, GM vice chairman, Global Product Operations put it: “Today's LS7 and LS9 Corvette engines are pinnacle achievements in engineering, and to personally involve our customers in their final creation shows the depth of Chevrolet’s commitment to make lasting connections with the customer.”
Forrester has been publishing research on social technologies for several years, much of that being focused on the Interactive Marketing role. Recently, we have expanded our research on social technologies to apply to many other roles, such as Customer Intelligence, Market Research, Customer Experience and eBusiness and Channel Strategy. You can now add Consumer Product Strategy to that list. As our recent panel survey report demonstrates, social technologies are relevant to Consumer Product Strategy (CPS) professionals as well because they give companies the opportunity to listen to and embrace consumers — and allow them to help create new products and innovate existing products. While the idea of social co-creation has been referenced in Forrester's research reports many times, this concept has not been explored deeply, until now.
In my just-published "Social Co-Creation" report, I define co-creation as "the act of involving consumers directly, and in some cases repeatedly, in the product creation or innovation process." Social technologies like online communities, Facebook, Twitter, company blogs, and Web sites provide CPS professionals with relatively easy access to engaged consumers. Through a combination of listening and embracing, companies can understand what unmet needs exist in the market today, recognize where current products are coming up short, tap the wisdom of the crowd to test ideas, and develop relationships with engaged consumers to drive new concepts into the market.
As part of my new research coverage that I'm calling product creation and innovation, I'm looking at big-picture ideas and themes that resonate with product strategists across a wide range of industries. Sitting at the top of the list is the adoption of social technologies by consumer product strategists: It's a bona fide hot topic that has been critically important within Forrester's other role-based research; it is applicable to a wide range of consumer product and service companies; and it's something that many companies are just getting comfortable with.
That last point was a hypothesis on our part initially, but we can now confirm it as so. In May of 2010, Forrester surveyed 181 consumer product strategy professionals from companies around the world in order to understand if and how they are currently implementing social strategies in the service of product creation and development. My recent "Product Strategists Want Social Innovation" report reveals the results of that survey, and the title makes no effort to mask the results: the use of social technologies by product strategy professionals is strong but not pervasive, and there are lots of unanswered questions out there. Some interesting tidbits from that survey include:
See many hybrid vehicles while driving to work or in the parking garage? No? These cars have been sold for more than 10 years, yet adoption is still low. Our consumer data tells us that people are concerned with the environment and that their concern is growing. So why aren't more folks going green and buying up hybrids?
We have tackled that question by applying our Convenience Quotient (CQ) analysis to the concept of green commuting in a metro area -- Boston, in particular. In the recently published report, we looked at various modes of commuting: walking, bicycling, public transportation, car-sharing services, and various self-owned automobiles, including a regular Honda Civic, a Toyota Prius, a Ford Escape hybrid SUV, and the forthcoming Nissan LEAF. We identified three different scenarios for commuters: urban dwellers (within 2 miles of the city center), inner suburban dwellers (within 8 miles of the city center) and outer suburban dwellers (within 16 miles of the city center). We then applied our CQ methodology, defining the benefits of each option as well as the barriers to adoption, and scored each mode of transportation accordingly.
Our findings: The green automobiles delivered a slightly more convenient commuting experience than the Honda Civic, but multiple significant barriers stand in the way of green automobiles being considered convenient green commuting solutions, particularly those associated with cost. Green-specific benefits are also limited, which do not counter-balance the barriers for hybrid and electric cars. We also found that urban consumers have many green alternatives available to them, thus diminishing the attractiveness of using a hybrid car to get to work.