Crowdsourcing: Power to the People

Discussion
Jul 31, 2008

By Tom Ryan

Although consumers have long been involved in helping companies develop products and services through focus groups, some companies are looking to the internet to tap into consumer input on a much wider scale. In business speak, the concept is being called “crowdsourcing” and is yet another play on the “wisdom of crowds” theory.

For instance, Threadless, a t-shirt company, and Ryz, an athletic shoe manufacturer, are making it possible for consumers to design shirts and shoes, according to The San Francisco Chronicle. Consumers vote online for their favorites and determine the products these companies sell over the internet.

Crowdsourcing is particularly appealing, according to its supporters, because a new generation of internet users expects that kind of input and interaction.

“They were born digital,” Frank Cooper, vice president at Pepsi-Cola North America, told the San Francisco Chronicle. “They get the process. It is not technology to them. It is another great experience to engage.”

This summer, consumers were given the opportunity to vote at DEWmocracy.com to decide new flavors for Pepsi’s Mountain Dew brand.

“Hundreds of thousands of people have given us feedback” on the flavors, Mr. Cooper said. “There is a wealth of information we can leverage. This is unprecedented.”

Rob Langstaff, a former president of Adidas’ operations in both North America and Japan, is putting $4 million into shoe startup Ryz because he believes there’s too great a disconnect between businesses and consumers. Often, consumer input is only involved at the beginning of the product design process and little afterward.

Said John Butler, the creative director at Butler, Shine, Stern & Partners, which has worked on a project to get consumers to create their own Converse Chuck Taylors, “It’s a smarter way to mass-produce things, getting them in the hands of people who want them, customizing products to meet individual consumer needs, and I think it is literally right around the corner for many businesses.”

Discussion Questions: What do you think of the potential for getting consumers involved in product development via the internet? Is this only an option for certain categories? Do you think that such efforts will be more about public relations than actual product development?

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13 Comments on "Crowdsourcing: Power to the People"


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Robert Gordman
Guest
Robert Gordman
13 years 9 months ago

Nothing is more valuable than consumer input as long as you are talking to the right consumers. Your best customers understand your business and products and can provide valuable feedback. If you simply solicit feedback from random “crowds” you are likely to get information that is generic at best and misleading at worst. Any research should be limited to your Core Customers.

Mark Lilien
Guest
13 years 9 months ago

Crowdsourcing, like any market research tool, can be used skillfully or not. It can be used with your core customers or new kinds of customers you’d like to have. It isn’t hard to segment the replies into demographic and psychographic groups, weighting the replies accordingly. It’s a lot less expensive than a failed marketing campaign or a failed product launch. Like any other market research, it doesn’t have to be precise, it just has to provide a reasonable direction. BTW, not that I have any inside info, but even though Apple is headed by a visionary genius, I bet they use market research, too.

Phil Rubin
Guest
Phil Rubin
13 years 9 months ago

Companies increasingly see customer communications becoming dialogue rather than (the traditional) monologue. This will make a certain amount of “crowdsourcing” not only inevitable, but profitable.

As more customers have input and customize how they buy, what they buy and how they interact with these companies, more valuable and sustainable customer relationships will result. As long as these relationships drive profitable revenue, companies will listen and act accordingly–if they are smart.

Nike, always a brand leader, provides a great example with their Free Everyday+ — look at this link to see for yourself.

While you’re there, look at what else Nike is doing in terms of Web 2.0–they Just Get It!

Nikki Baird
Guest
Nikki Baird
13 years 9 months ago
There are several different things going on here that have all been lumped together as “crowdsourcing.” First, there’s the idea of consumers designing (fashion) products that they want, and then the retailer selling the most popular to the masses. That’s pretty low-risk–using the crowd to weed out the ideas that are just a bit too quirky or personal to make it on a “mass” scale. Then there are sites that invite consumers to weigh in on new product ideas–sort of using the internet to facilitate focus groups. That seems way riskier to me. As noted earlier, online introduces bias (though less so today than say, 5 years ago), and consumers are notoriously bad about giving good advice in focus groups. Especially about truly innovative things. Then there are the marketing ploys – like Dewmocracy and McDonald’s Big Mac jingle campaign, where consumers basically “enter to win” through user-generated content or they vote on a flavor. That’s not really crowdsourcing. That’s just generating buzz. What’s interesting to me, is that no part of this conversation has… Read more »
Gene Hoffman
Guest
Gene Hoffman
13 years 9 months ago

There is probably some merit in crowdsourcing for new product development. But whenever a participant in crowdsourcing has something to say, they usually become quite emboldened, opinionated, candid and occasionally wrong. Some times the loudest talkers are the puniest buyers. Remember the well spoken crowd support of the Edsel? But, what the heck, it’s now crowdsourcing’s time on the ever-changing agenda, so let’s give it a try.

Liz Crawford
Guest
13 years 9 months ago

Used wisely, this concept is the wave of the future. We are increasingly embedding the consumer in the ordering and inventory process of distribution through the web; embedding them in innovation makes sense. Wise companies will learn to use the information effectively, however, using solid testing to ensure success.

David Biernbaum
Guest
13 years 9 months ago

Much of the market research results we see in the consumer packaged goods field is unreliable. Below, are just a handful of reasons:

1. The research is conducted without ample diligence to get the right mix and cross-section of subjects to test.

2. The data is interpreted with an agenda and with bias.

3. In the case of the internet the research is tainted because the demographics are inherently card-stacked to begin with.

The effectiveness of market research, whether approached with traditional focus groups, online crowd sourcing, or by any other means, depends not so much on the method by itself, but on the science of how the method was applied, and by whom and how professional or reliably the data is interpreted and applied.

Roger Selbert, Ph.D.
Guest
Roger Selbert, Ph.D.
13 years 9 months ago
I recommend an article in the current issue of McKinsey Quarterly, “The Next Step In Open Innovation.” I provide a synopsis in the July issue of my newsletter Growth Strategies (contact me for a copy). The authors write that increasing numbers of organizations are now approaching innovation as a convergence of like-minded parties, or distributed co-creation, to use its technical name. LEGO, for instance, famously invited customers to suggest new models interactively and then financially rewarded the people whose ideas proved marketable. Threadless is also cited as selling merchandise online and in-store (hey, an integrated retailer!) that is designed interactively with the company’s customer base. Of course what facilitates this new approach to innovation is the rise of the Web as a participatory platform. Other examples of co-creation are cited. One of them is participatory marketing, which encourages customers to help create marketing campaigns. Approached in the right way, this is also an opportunity to start co-creating products with them. Last year, for instance, Peugeot invited people to submit car designs online and attracted four… Read more »
Peter Fader
Guest
13 years 9 months ago

It’s interesting that today’s paragon of excellent product design (Apple) seeks no input from the masses (and, in fact, is totally paranoid about letting anyone know about its design plans). This might seem like an exceptional story, but it really is the rule: the best designs will consistently come from a well-organized, professionally driven process. Case closed.

“Crowdsourcing” is just some more Web 2.0 happytalk. When all is said and done, crowds really don’t have that much wisdom….

Dr. Stephen Needel
Guest
13 years 9 months ago

The good part of this is that it can be like a focus group but with hundreds or thousands of participants rather than dozens. The downside is that the scale may lead you to design a product that nobody wants, rather than a set of products targeted at different sub-markets. We’re presenting a paper at the ESOMAR Congress in September talking about this issue and similar problems with Web 2.0 solutions.

Bob Phibbs
Guest
13 years 9 months ago

This is an example of 2006’s best-seller: Wikinomics: How Mass Collaboration Changes Everything. What a great way to collaborate, innovate and create more value.

Laura Davis-Taylor
Guest
Laura Davis-Taylor
13 years 9 months ago

I think this is brilliant. Many consumers out there have GREAT ideas and having an ear to the crowd, if nothing else, can spark creative thinking inside of corporate walls. No one is FORCING a company to use the ideas…the point is that it’s yet another resource for innovation ideation. My roots are in the advertising agency industry and we’ve used this method successfully for years.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
13 years 9 months ago

“Crowdsourcing” is just another term for blogging, which is the unrestrained idiocy that poses as an intelligent exchange of meaningful information on the internet. Peter Fader and I seem to be joined at the hip this week in our opinions.

This is a seriously stupid concept which will be sold to semi-alert product manufacturers as a seriously intelligent project design. Don’t you just love the irony? Strange people who live on the internet designing products for real people with real lives? Where can I buy an Edsel?

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