More and more firms have begun practicing the consumer-centric approach to new product development (npd). As part of this approach, firms use sophisticated market research to identify unmet customer needs that could be converted into successful consumer products. Now, it’s time to make the next step and use crowdsourcing npd research to also ask consumers to help design the new products.
My wife often complains that her hair dryer has been designed by a bunch of bald males. I see her point. True, the device does produce a stream of hot air (accompanied by a loud noise). But it is heavy, and its handle is way too thick for a small-size female’s hand. Besides, control buttons on the handle are positioned in such a way that you cannot operate the device with one hand. When asked if she would buy a hair dryer from the same brand again, my wife answered with a simple “no.”
If you build it, they will come. Will they?
My wife’s hair-dryer experience is hardly an exception. A list of failed innovations in the consumer area is depressingly long. In fact, consumers reject new products at an alarmingly high rate: the late Harvard Business School professor Clayton Christensen calculated that of more than 30,000 new consumer products launched every year, up to 95% fail.
What’s going on? Unfortunately, many firms still practice poor customer research supporting new product development, especially when it comes to specific design and features of new models. “Let’s build it, and they (customers) will come,” the thinking seems to go. But customers, overwhelmed with the sheer number of new offerings and spoiled with the flood of online reviews and recommendations, are not rushing to open their wallets (physical and digital alike) for subpar newcomers. Crowdsourcing npd research and product design certainly has scope to make improvements.
The dawn of customer-centricity approach?
Things have begun to change. Customer centricity—a framework that places the end user at the center of customer experience—is gradually becoming a leading paradigm for new product and services development. Many companies began employing a variety of novel, more sophisticated market research tools, including ethnography and netnography, to identify unmet customer needs (“jobs-to-be-done”) that could be potentially addressed by new and supposedly improved offerings.
One of such new tools elegantly combines product research and crowdfunding. Instead of offering finished products, companies now test consumer demand by collecting online “pre-orders” for products that are still in early development. Once used exclusively by startups, crowdfunding is rapidly becoming a part of the market research toolbox of grand brands like Amazon.
Thank you very much. See you later.
Interestingly, however, that after customer input has been collected and systematized through crowdsourcing npd research (“thank you very much”), customer centricity gets rapidly forgotten, and firms turn to internal R&D teams to address the newly identified customer needs. As the prevailing thinking has it, it is only the firm’s own professionals (marketers, product developers, engineers, etc.)—and no one else–who has knowledge and experience to transform customer needs into working ideas that could be eventually realized into commercially successful products (“see you later at the counter”).
Ironically, the assumption that customers know what they need, but don’t know how to make it, is seldom tested—and when tested, is proven wrong. In a 2012 article published in The Journal of Product Innovation Management, Poetz and Schreier compared novel product ideas generated by a firm’s professionals with those submitted by a crowd of users. The field of innovation was baby feeding products, and all the ideas were evaluated, blindly to their source, in terms of novelty, customer benefit, and feasibility.
The study showed that the ideas generated by the users scored significantly higher in terms of novelty and customer benefits–and only slightly lower in terms of feasibility–than those proposed by the firm’s own designers. Moreover, it was found that the ideas that received the highest overall marks came predominantly from the outside users. So much for internal expertise!
One more time about experts vs. crowds
Of course, one could argue that Poetz and Schreier’s study is an exception. As mentioned above, the field of innovation was baby feeding; the analysis of the users who took part in the idea generation process revealed that about 90% of them were females, many with first hand experience in feeding babies and a sound technical knowledge of the related products. It is easy to imagine a recent mom with a solid technical background who can come up with better ideas for baby feeding products than a team of professional designers—the majority of whom, I suspect, were males with less than perfect knowledge of the baby-feeding process.
Although I’d love to see Poetz and Schreier’s study replicated in different settings and product areas, I do believe that it has much broader implications. It yet again dispels a popular myth that crowds of problem solvers are composed of “amateurs” and that when posed with a question that requires knowledge and expertise, not just an opinion, crowds are becoming useless (or, worse, outright stupid).
The truth that many experts are reluctant to accept is that properly assembled crowds are composed of experts. They may not work for your company or in your field, but they are experts, nonetheless. Take, for example, InnoCentive, a commercially available crowdsourcing platform with a solid track record of solving difficult scientific and business problems for corporate and non-profit clients. The InnoCentive proprietary crowd is composed of 400,000+ solvers, with almost 70% of them holding advanced degrees. I strongly suspect that some of them are women with experience in feeding babies; I’m also sure that many of them have strong opinions about their hair dryers and other household products.
Firms would be wise to ask them—and other solvers—about products they need through crowdsourcing npd research. Firms would be even wiser to make the next step to ask for help in actually designing these new products.