02 May 2005  What Do YOU Think?

Where is Consumer Generated Marketing Taking Us?

There is a kind of "always on" communication system shaping up between the most committed of tech-minded users and those who supply them. Is the close monitoring of developing trends always in our best interests as marketers and customers?

 

Summing Up

Consumer generated marketing is a fact of life to which all of us will have to adapt. Adaptation means learning how to use CGM to provide one form of input in fashioning product and marketing decisions. Those are the messages from respondents to this month's column, who seemed to treat what some might think is the most revolutionary concept in marketing to come along in a long time in a very matter-of-fact way.

Bob Nemens commented, "Traditional marketers may be quick to dismiss Internet chatter as coming from the 'uninformed.' ... If Thomas Edison had been given the option at the time, I bet he would have spent significant time on the online underground." Fernando Polo dismissed the potential pitfalls of bias caused by listening only to outspoken users of the Internet by saying, "Excuses such as 'listening to the wrong complaints' are just that: excuses. Text-mining technologies can now help companies listen to their customers better than ever... My advice: 'Don't let your competitors listen to your clients; do it yourself first.'" Andrea Learned pointed out, "Eventually, those slightly later adopters and less-active types will join in to make blogs a more representative discussion vehicle... The same will likely happen in the consumer generated marketing realm when slightly later-to-adopt consumers realize how much they can influence manufacturers...."

The proper role of CGM was a source of some comment. In particular, the findings of a study cited in the column that associated companies utilizing mechanisms for paying attention to "emerging customers" with the fostering of "disruptive technologies" raised some eyebrows. As Christophe Meili put it, "I'm surprised that consumer generated marketing would foster disruptive innovation. I was under the impression that ... true disruption would be generated less by popular demand than by hard radical thinking." Flavius Chircu suggested that if we regard consumer generated marketing as "something akin to the other party in a dialogue ... (it) becomes a source of incremental improvements whereas anything revolutionary could only come during the 'breaks' in the dialogue." And Caleb DeGrenier commented that "companies still need to surprise the market with innovative products that no single customer would have thought of."

This brings us full cycle to some of our original questions about consumer generated marketing. Is it really something "new under the sun"? Is it, for marketers, a disruptive technology in its own right, something offering decision makers more for less (or, more accurately reflecting the definition of a disruptive technology, less for a lot less)? Or is it something to be regarded as providing just one of several important inputs to future product development and marketing decisions involving primarily non-disruptive technologies? Does chatter matter? And how much? What do you think?

Original Article

About fifteen years ago, an academic friend from France noticed the impact of Minitel on French consumer behavior. He noted that consumers were increasingly using the pathbreaking electronic directory created by France Telecom to drive, not respond to, elements of marketing strategy such as product development, advertising, and pricing. His presentation of his observations to his American counterparts was met with only a modest level of interest.

Fast forward fifteen years. Tens of thousands of "newsgroups" and discussion boards on the Internet have spawned millions of bloggers who speak in both whispers and shouts. Combined with the low cost of Web site and even crude advertising design, inhabitants of the Web can achieve wonders in creating and broadcasting a wide range of messages. These range from campaigns for or against public figures to ads highlighting the high cost of replacing iPod batteries (since corrected). The newsgroups, discussion boards, and blogs may contain the seeds of ideas and notions about cutting-edge behaviors suggestive of everything from future business opportunities to social and political trends.

Two new studies suggest the impact of this behavior on the nature of what may be going on in the minds of marketers. In one, Vijay Govindarajan and Praveen Kopalle conclude that established companies that have created a mechanism for paying attention to "emerging customers" are more likely to foster "disruptive technologies" (i.e., cellular telephony) as opposed to those technologies that are merely "radical" (i.e., cordless telephones—innovations that enhance and sustain, not disrupt, existing technologies and products).

A second study by Eric von Hippel concludes that manufacturers increasingly rely on users for new product development, design, and distribution. His particular interest is in how products can be designed and distributed to elicit user-driven development through such methods as "open sourcing" and interactive Web sites that effectively involve users in engineering. The result is a fuzzing of the boundaries between a company and some of the users of its products and services.

There is a kind of "always on" communication system shaping up between the most outspoken and committed of the tech-minded users and those that supply them. We might term it "consumer generated marketing." Is it time to ask ourselves whether these trends are always in our best interests as marketers and customers? Is it possible to be too well connected with one segment of customers? Is there a danger among marketers and more generally the media of paying too much attention to the Internet-savvy early adopters and activists and too little to other early adopters that tend to keep their behaviors and ideas to themselves? Might marketers be too sensitive to Internet prompts, responding too rapidly on the basis of noise as opposed to truly developing trends? What do you think?

Note: The term "consumer generated marketing" is derived from a term, "consumer-generated media," coined by Pete Blackshaw, chief marketing officer of Intelliseek, an Internet-based consumer feedback provider. In the interest of full disclosure, I am a director of Intelliseek.

To read more:

Vijay Govindarajan and Praveen Kopalle, "Can Incumbents Introduce Radical and Disruptive Innovations?" Marketing Science Institute Report No. 04-100, Winter 2004/2005

Eric von Hippel, Democratizing Innovation (MIT Press, 2005)

Comments

    • Flavius Chircu
    • Consultant

    Consumer generated marketing is an evolving capability. Consumers and marketers alike will always keep learning how it can be done, what cost/benefit ratios to expect from it, its levels of applicability by industry or any number of criteria, etc.

    All in all, it is difficult to anticipate revolutionary insights from consumer generated marketing alone. It would be more beneficial to treat consumer generated marketing as something akin to the other party in a dialogue. Under that premise, consumer generated marketing becomes a source of incremental improvements whereas anything revolutionary could only come during the "breaks" in the dialogue.

     
     
     
    • Bob Nemens
    • Director, Marketing, Diebold, Incorporated

    Traditional marketers may be quick to dismiss Internet chatter as coming from the "uninformed." They should appreciate the dynamics of this real-time communication medium. It is just one more way to monitor the marketplace, and good marketing dictates that conclusions should be drawn from a variety of inputs.

    I think the same traditional marketers who discount guerrilla marketing approaches also discount these. Blogs, chat boards, and so forth represent the "market research" dimension of guerrilla marketing—only inbound.

    Whether you consider the postings credible or not, they shape perceptions, and good ideas can come from anywhere. It is another voice of the customer. If you are getting "bad press," consider it an early warning signal. If Thomas Edison had been given the option at the time, I bet he would have spent significant time on the online underground.

     
     
     
    • Fernando Polo
    • Marketing Director, BuzzMaps

    I don't doubt that companies will be embracing the Web as the most important channel to communicate with clients. Excuses such as "listening to the wrong complaints" are just that: excuses. Text-mining technologies can now help companies listen to their customers better than ever.

    My advice: "Don't let your competitors listen to your clients; do it yourself first."

     
     
     
    • Deepak Alse
    • System Design and Sustenance Engineer, Wipro Technologies

    I think marketing is all about customer orientation. Organizations that forget customers and focus only on their Internet cycles of product development and marketing are doomed to failure. Yet letting the customer drive your marketing is great only for those products for which the customer understands an existing need and articulates it well. Incremental innovation can easily be built that way.

    Breakthrough changes, however, need both an involved customer and an innovative organization. Take any one of these away and you have a failed market or product! A good customer-oriented relationship is like a great marriage—not necessarily always "on" but always listening!

     
     
     
    • David Keaveney
    • President & CEO, MotorSports Emporium, Inc.

    The interactive community has created a definite separation between Internet-savvy early adopters and those who keep to themselves. Newsgroups and chat rooms are prime examples of the influential "noise" that can induce manufacturers to bring a product to market.

    Marketers and manufacturers do discriminate unintentionally against certain adopters because these adopters do not express their opinions openly. This "quiet" segment represents a powerful demographic that could harm developing trends. I think marketers need to be sensitive if they desire all types of adopters.

     
     
     
    • Christophe P. Meili
    • EMEA Marketing Program Manager, HP

    I'm surprised that consumer generated marketing would foster disruptive innovation. I was under the impression that it could only lead to incremental improvements in existing products and technologies. The general understanding was that customers need to be involved to improve existing products or services, but that true disruption would be generated less by popular demand than by hard radical thinking.

    I can't help but recall in this context the Dilbert cartoon about a 1920s airline survey: "If you had to travel a long distance, would you rather a) drive the car; b) take the train; or c) allow yourself to be strapped into a huge metal container that weighs more than your house and be propelled through space by exploding chemicals while knowing that any one of a thousand different human, mechanical, or weather-related problems would cause you to be incinerated in a spectacular ball of flame?"

    That said, I'm a firm believer that the single most effective use of a marketer's day is to spend it with a customer.

     
     
     
    • Isaac
    • Internal Controller

    Since experience is critical to manage, you might ask, what exactly is customer experience management? Most marketers have defined it as "responding to customer information, criticism, complaints, and suggestions to improve the customer's service experiences." But then, how is "customer experience management" different from "customer relationship management"?

    The answer is that while customer relationship management collects customer data for marketing, customer experience management collects customer data to improve service processes. An example of customer experience management would be using guests' comments to improve manpower planning and staffing, hence increasing the speed of delivery and reducing customers' wait time. The last point is of course the most important one. Customer experience management deserves to have the last part of its name changed from "management" to "measurement" unless customer experiences are enhanced. By enhancing the customer experience, we help secure the true loyalty of customers.

     
     
     
    • Mok Tuck Sung, MD
    • Fountstrategy International

    Consumers will always want more for less even though the early adopters are willing to pay a higher price. This customer segment does not contribute to the overall profit of the business. Being submissive in one way or another to the more vocal segment of the market indicates a strategically weak company. I think it would not be a good strategic move to accept a consumer generated marketing initiative as a strategic driver.

    A better approach would be to pursue consumer generated marketing initiatives that incorporate value innovation in their strategic thinking and strategy formulation. (See W.C. Kim & Reneé Mauborgne, "Value Innovation: The Strategic Logic of High Growth," Harvard Business Review, July/Aug 2004.)

    As companies listen to their customers from a broader market space, as well as excite them with new products and or services that can be produced at lower costs, it will generate the greatest possible economic returns while minimizing the risks involved.

     
     
     
    • B.V. Krishnamurthy
    • Director and Executive Vice President, Alliance Business Academy, Bangalore

    For many years now it's been suggested that involving customers in new product development is one way to sustaining a competitive edge. Several examples can be cited in support of this proposition, from depth-measuring devices for divers to apparel for sports participants.

    Yet, there is a danger in carrying this beyond a point. The combination of a mobile phone with camera, e-mail, spreadsheet, and MMS (multimedia messaging service) capabilities has its flip side. How many customers actually need all of these features? Is there not a scope for some of these features to be abused?

    Also, some of the ads shown in different media are not only an assault on our common sense but also impact our behavior in a myriad of different ways. In emerging economies like India and China, where the first thing that comes to marketers' minds is two billion "customers," the consequences can be frightening. When one looks at the number of people who zoom past traffic signals on sleek motorcycles reaching 50 mph in less than fifteen seconds, even while talking on their cell phones, one is surprised that the accident rate is not higher than it is.

    I think marketers should strike a balance between the voice of the customer and the larger public good. Certainly, there is a case for listening to customers and finding out their expectations. However, there is no case for making available to customers what most of them neither need nor want.

     
     
     
    • Fernando das Neves Gomes
    • Independent consultant

    If we really want go there, we have to understand the behavior of this new emerging segment: Are they consumers or just Internet users?

    I think we should start with psychologists and behavioral analysis in order to learn the motivations and most importantly the interaction between what people say and what they really would apply in life. Are they truly involved with the subject? If not, they would make noise no matter what the topic was.

    But it's a different matter if we are talking about customers. This is a very old way of improving products and services, with the Internet difference allowing us to interact with customers in a very close, easy way. If we want to develop a massive survey, we can do it electronically with sensitive analysis and low-cost results.

     
     
     
    • Caleb DeGrenier
    • Senior Technical Business Analyst, NLG

    Any good company must develop and enhance products based on customer responses and desires. Using interactive, community-based Web sites or newsgroups seems like a good dimension to examine. One obvious risk is that by responding to the loud (and often very public) complaints of some, you may expend energy on the wrong things.

    Companies still need to surprise the market with innovative products that no single customer would have thought of.

     
     
     
    • Andrea Learned
    • President, Learned On Women

    Early, early adopters and activists will definitely be the first ones to participate in consumer generated marketing, but once it becomes more commonly known that manufacturers are actually paying attention and using such input, a lot more people will be motivated to contribute their thoughts.

    It reminds me of the comment capability and participation rate of blogs. Currently we bloggers all read and comment on one another's blogs, but very few "outsiders" are taking that plunge. Eventually, those slightly later adopters and less active types will join in to make blogs a more representative discussion vehicle. That transition seems to be occurring: I find more of my family and friends are interested in how blogs work and want me to walk them through the process of adding a comment to the one or two blogs they read.

    The same will likely happen in the consumer generated marketing realm when slightly-later-to-adopt consumers realize how much they can influence manufacturers through such participation.

     
     
     
    • Joe Violette
    • Project Manager (retired), Bechtel Corporation

    Several years ago we stopped referring to our clients as clients but changed to customers. We placed considerable emphasis on "meeting or exceeding our customer's expectations." Soon this philosophy cascaded down through all levels of the organization and it began to pay dividends. It was further enhanced when we adopted Six Sigma throughout the organization as a way to steadily improve our work processes. The customer gets better value and the employees greater satisfaction.