Co-creating with consumers: a new way of innovating

It is no secret that the past 20 years have seen a major decline – some would say the slow death – of corporate and brand innovation, but the debate about why, and what needs to be done about it, is very much alive (1).

Some, such as Doug Hall, speaking at the Marketing Society's Innovation Masterclass at the end of last year, argue that consumers have much to answer for. And he isn't alone. In an interview with Research magazine (2), Drayton Bird argued that he doesn't want market research to tell him what people think because 'people don't bloody well know what they think themselves'. The argument was repeated at Marketing Week's Innovation Summit (3) earlier this year, when a number of brand owners quoted Henry Ford's remark, 'If I'd asked the public they would have said they wanted a faster horse.'

CONSUMERS CAN'T INNOVATE?

So, the received wisdom is that consumers cannot innovate. They don't have the vision or imagination of Henry Ford, the creativity and understanding of the ad agency, or the expertise and knowledge of the brand team. The message from everywhere is the same: don't get consumers involved.

Yet there are those like Eric von Hippel, a Professor of Management at MIT's Sloan School, who think that certain types of today's consumers can and should be part of the innovation solution (4). He believes that if you could measure it, the innovation driven by key consumers, or 'leading-edge users' as he calls them, is far greater than the volume of new ideas produced by corporations. He argues that the most effective and well-known user-centred innovation involves collaboration among widely distributed contributors via the internet. Thus, technology and close attention to choice of consumers is what is making the difference.

The rise of 'open source' software has shown how global communities of skilled and intelligent consumers collaborate to find better solutions and are prepared to share their innovations. Considering that for most retail and fmcg companies 80% of innovation is incremental, surely businesses should be embracing the ideas of their most dedicated consumers as part of the innovation process.

CONNECT AND DEVELOP

This, of course, is starting to happen. Procter & Gamble has pioneered the idea by investing in a Connect & Develop division, where 50% of its innovation has to come from outside the company – and not just from consumers but also suppliers and third parties as well (5).

Yet before others follow this path, they will need to be honest with themselves about their own attitudes. Do they actually trust their consumers? Do they have a corporate mindset that is not just open to consumer ideas but places a strategic value on them? Ultimately, do they sincerely believe that certain consumers can help them to innovate smarter and quicker? If a company does believe there is a greater role for particular consumers to get involved, how difficult is it, and what is the best way to achieve success?

EMPOWERED CONSUMERS

The advent of Web 2.0 signals that the time has come to bring consumers into the innovation process. The arrival of MySpace, Facebook and Bebo has given consumers confidence and encouraged them to take more control of the relationship they have with brands. They have the tools to create their own content and share it – even their own advertisements – and so re-shape what the brand means to them and how it is communicated.

Apple tapped into this when it launched the Apple iPod Touch with an advertisement that had already been created by a Leeds University student, Nick Haley, who had posted it on YouTube. Apple noticed it and, keeping very close to the original had its agency re-shoot it as a professional spot, as well as hiring Mr Haley as a consultant. The same approach was followed with the advertisements used to launch the incredibly successful iPhone (6).

It is the increase in this type of consumer involvement that has given rise to the term 'empowered consumers', a new breed of consumers who have a strong belief in their own creativity, ideas and self-expression.

Consumers don't have to be invited to 'play' with your brand or product, as HSBC found out last year in the UK when it withdrew its graduate overdraft. Within days, thousands of students voiced their anger on Facebook, defacing the HSBC brand from the 'World's Local Bank' to the 'Student's Rip-Off Local Bank'.

It is coming to the point, says Mark Earls author of Herd, that it is no longer about what your brand does to the consumer but what consumers are doing to and with your brand (7). Putting it another way, James Murdoch in his Marketing Society Annual Lecture said: 'Ubiquitous connectivity means fundamentally that the individual becomes the agent of everything ... and this is not a question of scale. It is a different way of existing' (8).

Yet it is precisely the ease with which brands can engage empowered consumers that is making it hard for them to do so as the loss of control, whether in terms of intellectual property or how the brand is communicated, is threatened.

Organisations charged with helping companies to protect their brand reputation are also running scared. The belief that the best ideas can come only from a few 'creatives' within the branded walled garden of the ad agency is under threat. If Nick Haley can make a TV ad for Apple who needs an advertising agency?

IDENTIFYING THE RIGHT CONSUMERS

To challenge this advice companies first need to be more understanding of who their potential empowered consumers are. Working with Unilever on its deodorant brands, we have helped it to develop a pyramid based on consumers' desire and skill set to engage with its brands at different levels, from more intimate to more open innovation.

In fact, it is only the top 1% who are willing and able to jump through some serious hoops (including signing up to NDA and IP agreements) that end up working with Unilever in our 'co-creation' sessions. It is a model also applied by Lego, who knows all its key consumers or 'Lego Professionals' on a first-name basis (see Appendix 1).

A key part of the process of helping Unilever to identify its empowered consumers was engaging with them first on Headbox (www.headbox.com), our own collaboration community of 15,000 11–35 year olds. Each 'head-boxer' is profiled by giving them an Influencer Index score by passion/category so we could single out those consumers who were not only passionate about how they look and feel but also had the right skills to co-create with Unilever's brands.

THE CO-CREATION PROCESS

With a better understanding of their most dedicated consumers, companies can quickly start to organise which types or levels of innovation can be done effectively, and with which consumers, in both online and offline environments.

We have developed a simple six-step co-creation process for clients such as Unilever and GSK called 'Helix' that brings together the 1%-ers with their insight, brand, agency and R&D teams to turn insights and concepts into something real and tangible that consumers want to buy. It lets consumers come up with their own ideas and product designs, as well as ways to bring the product to life in the marketplace. It involves consumers earlier in the innovation and marketing process and keeps them involved for longer, injecting fresh and different ways of thinking.

Last year we completed a co-creation programme for a Lynx/Axe variant where 18 members of Headbox designed the product and the activation plan for a 2009 launch. The journey started in Alicante with a three-day workshop, and finished in London with final presentations to senior Unilever stakeholders – and all done in just five weeks. It underlined to everyone that building an innovation pipeline can not only be fun and inclusive, but also quick – something companies currently struggle with.

ONLINE CO-CREATION

This is where technology has really changed the game. We have found it is better, easier and more practical to co-create with consumers from around the world online. Recently we set up an online community project, working with Axe consumers from Europe and South America to develop communication concepts including names, tag-lines and ways of expressing them for a new global product launch. Consumers from Argentina collaborated in project groups with UK consumers to develop, refine and select the best user-generated ideas using a range of Web 2.0 tools including multimedia diaries, forums and chat groups.

We have learned that with online co-creation it is important to keep the tasks simple and fairly general. But to get the best output it is essential to combine on-line with off-line.

And even though these examples involve co-creating with young consumers, the process is easily replicated (both online and offline) with other types of consumers and other brands from companies such as Coke, GSK and Unilever's laundry division.

NON-TRADITIONAL RESEARCH

There are inevitably questions being asked about the role of research. It is not enough to apply traditional research thinking to the new world of empowered consumers: it is too controlled to fully engage them. It is not, as Drayton Bird implies, about using consumers as crash-test dummies, only there to test things. These consumers no longer see themselves as passive respondents, but more as active stakeholders in the brand. This means researchers have to give up some control; talk less, listen and observe more. Empowered consumers have more to say and give, so just asking them a list of questions that we probably already know the answers to will not suffice.

It can also galvanise a research or insight team who have seen their role until now as merely providing PowerPoint presentations and lengthy documents to their brand team. As an equal stakeholder in co-creation, researchers can be taken much further on the marketing journey with consumers. They can become the real champions of consumer involvement, as well as the key drivers for it within an organisation, making their role more strategic, interesting and valuable.

CREATING A BUZZ

Stretching research in different ways to generate new conversations can bring other benefits. It can help to create a buzz around your brand by generating positive word of mouth.

After the Alicante project with Unilever, our 18 Headboxers enthused for days on their Facebook pages about how brilliant their Unilever experience had been. The combined number of friends who would have read or engaged with these exchanges was over 10,000 (one Headbox member had over 1500 'friends' on Facebook).

So if you can create this much enthusiasm for the brand after engaging consumers in one project, just think what you could achieve if you engaged them 24/7, 365 days a year. And the opportunities are there for brands to do this – to embrace their leading-edge users into their world on a continual basis through a range of Web 2.0 research and co-creation tools.

CONCLUSION

Web 2.0 has ushered in a new era, where certain groups of consumers have confidence to express their creativity, and the ability as well as the tools to do it.

Many organisations are finding that consumer innovation or co-creation is happening and that in many instances it can be quicker and smarter.

Notes

1. Hall, D. (2007) 'Innovation Masterclass' lecture presented figures to the UK's Marketing Society showing that corporate innovation was in major decline.

2. Bird, D (2008) interview in Research magazine, Market Research Society, February.

3. Innovation Summit conference (2008), run by Marketing Week, March.

4. Von Hippel, E. (2007) 'Users are transforming innovation', FT.com.

5. Day, P. (2007) 'Eureka Democracy' on BBC Radio 4, 11 October.

6. youtube.com/watch?v=KKQUZPqDZb0.

7. Earls, M. (2007) Herd. John Wiley & Sons.

8. James Murdoch's speech to the UK Marketing Society's Annual Dinner, at http://www.marketing-society.org.uk.

APPENDIX 1 – COMPANIES LEADING THE WAY

Lego

'You can't fake co-creation; it's not a gimmick to be seen to be doing – it is about a genuine, profound culture change, about making everyone in your company accountable to consumers, not just shareholders, bosses and each other. At Lego we realise that our consumers own our brand. We own the trademark, yes – but the brand only exists and comes alive in the hearts and minds of our consumers and without them we are nothing.'

Cecilia Weckstrom, Experiences and Innovation Director, LEGO

GSK: Sensodyne

A co-creation project that enabled insight, technical and brand stakeholders from GSK to interact directly with consumers to develop a new product. The process combined an offline workshop with three weeks of online collaboration and co-creation to develop and refine the product concepts, packaging, launch ideas and formulation. Consumers then pitched their final products to a wider audience of GSK and agency team members at a face-to-face debrief.

Unilever: Skip

Twelve females from South Africa, Asia, South America and the UK co-created with key Unilever brand and insight stakeholders in the global relaunch of the laundry product Skip. Hosted in central London, the two-day workshop built on the brand's recently developed brand positioning to develop top-line concepts and packaging ideas born from genuine consumer insights.

'Co-creation and all the movements we are seeing or experiencing with Web 2.0 is truly a revolution, not only because we are now innovating with consumers who are more empowered but because this is impacting the way departments, agencies and big corporations like Unilever are working.'

Ana Medeiros, Consumer Insight Director, Unilever

Figure 1: Consumer pyramid