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Tuesday
Oct112011

Consumer-Innovators (Part 2) & The End of Social Media 1.0

 

In Part 1 of this series, I described how Social Media campaigns and programs may be unwittingly compromised by a villain residing below: The Industrial Age relic of a one-way product design flow.

I also reviewed Eric Von Hippel's recent work on the surprisingly immense number of consumer-innovators  in the population, suggesting social media programs which target this group are more likely to demonstrate ROI.

In this post, I continue my discussion of how these Open Innovation concepts perhaps offer social media marketers an understanding of social media's next phase.

The End of Social Media 1.0?

It seems the core problem with Social Media 1.0, as principally a communications strategy, is that it does not on its own anticipate any change in the traditional product design or service creation processes.

Think about the way social media campaigns typically connect a company to customers. In most cases teams of social media people chiefly work on programs to amplify the voice of customers, broadcasting it out to a wider realm of customers and would-be customers . The emphasis here is on increasing the total network size. We continue the mistaken viewpoint that increasing influence  is about finding more people to influence, instead of deepening the ties to those we have already influenced.

My thesis is that much of this is perpetuated by the fundamental one-way product design model below.

In some ways, building a sophisticated social media strategy on top of this old model is akin to putting high performance Michelin Bugatti Veyron tires on a V4 engine design: You just can't get their full performance. To get full performance, companies have got to get under the hood, revise the fundamental engine and chassis design. Reading the struggles within the Open Innovation community itself, this is of course no mean feat and certainly far beyond marketing's control alone.

But here's what marketers do have control of: If we take Von Hippel's thesis seriously as a latent opportunity, namely, the opportunity to leverage the  massive number of consumer-innovators out there, companies ought to have an equal size team of social media folks working on getting the customer messages back deep inside the company.

 

What Can Social Media Marketing People Do to Aid the Transition?

 As long as we point to "best examples" in social media as broadcasty, high buzz Old Spice-style campaigns, we're still in a corporate media mode, casting broader nets, rather than tightening our relationships with customers for "what matters most", namely, giving them products they want. 

Von Hippel suggests three steps companies can take to leverage consumer innovation. Here I've recast his points, adapting them to emphasise marketing's role.

1. Marketing Needs to Provide a Bridge Bringing Consumer-Innovators into the Product Life-Cycle

Marketing people need to step outside the traditional serial timeline of internal product innovation where their principal role is to educate consumers on why they need a product design by the company. Instead, they need to focus on reversing the process, bringing lead consumer innovations  into the company, educating the company on what its consumers want. A good start is to review the balance of social media team participants focused on outbound vs. inbound communications. Ask yourself: Are you over-weighted on purely outbound communications?

2. Creating Consumer Incentives to Contribute to Product Design

Marketers need to not only identify and bring those lead innovators into the company design process, but include those lead consumers as part of the company reward system, whether that be by revenue sharing, IP sharing or other. Threadless does it by revenue-sharing and bonuses to designer-users, Quirky does it by sharing a percentage of profit with innovators. As trial programs, companies can experiment with Open Innovation challenges and innovation platforms, allowing lower-risk experimentation without wholesale rearchitecting of fundamental business processes and current operations.

3. Building the Consumer-Innovator Incentives into the Company Revenue Model

Ultimately, given that  incentives to your lead consumers are offered, these costs need to built into the cost of sales for product or services introduction. 

 

Is Social Media 2.0 = Social Innovation?

The much sought-after ROI of social media will come to a greater wealth of companies once we realise that "the people formerly known as customers" are far more than brand ambassadors to spread word of mouth,, more than influencers of  product buying decision, but as users of our products have a great deal of tacit knowledge of our product and services to aid  the product design process itself.

Some may question:  Aren't you simply stating that crowdsourcing is the next evolutionary stage of social media?

And as much as my answer is "Yes",  my point is that companies can't achieve this without deep change in  their product design process, a construct which is usually treated as outside the realm of social media discussion. Von Hippel's research, showing the huge opportunity in tapping consumer innovation, makes it clear that crowdsourcing - with a specific focus on these consumer-innovators - should be the focus of our social media strategies. This keeps us centered on our product and service missions and not just emitting the "clever campaigns and rudimentary conversations" of which Foremski and Solis rightly despair.

Social media marketers wonder "What's wrong with my social media strategy?", "Why have my efforts plateaued?" and "Where's the Social Media ROI?".  But taking a hint from the Open Innovation camp, we realise the problem may not be with social media per se, so much as that the strategy rests on top of a strictly internal one-way design process. What the Open Innovation experts know is this:

You can't build an effective 2-way customer communications strategy on top of an outdated one-way product design model.

In the end, I hope both groups step outside their separate rooms to begin a long-lasting conversation. It seems adopting the best of both paradigms  promises to unleash a tremendous force of consumer and company co-creation, aka social innovation.

What do you think? As a social media marketer, do you regard crowdsourcing consumer-innovators as an optional strategy? Or is it part of the endgame?

 

Bridge photo source (NY Daily News)

 

Postscript. For the sake of clarity, I have simplified real company situations in two respects. First, most companies do not have a strictly one-way flow of design - that's an extreme.  Second and obviously, the use of the term "two-way" in here is more realistically replaced with "multi-way", meaning interaction includes not only other groups beyond end-consumers,  but group collaboration.