Title of Post: Getting to ‘Ah hah!’ – Clone Phone innovation proves the power of consumer communities
Organization Name: EE (Everything Everywhere)
Industry: Digital Communications
Web Reference: www.ee.co.uk
What is co-creation?
Any business or organization that wants to continue to grow in today’s consumer-centric world has to consider new ways of engaging with consumers. Social media platforms have been leveraged and social media strategies implemented all in the name of maintaining customer relationships. But what about growing those relationships? What about the inevitable next step of moving forward with new and improved products? What do customers need? How can organizations be sure they will meet those needs without sacrificing hard earned customer loyalty? More than ‘likes’ and ‘tweets’, more than comment forums and feedback, ‘co-creation’ and ‘customer-made’ have emerged as the new social media-driven buzz words representing modern concepts in product development and innovation.
So, what are these emerging concepts and how can organizations exploit them? They are not feedback opportunities, not customization or personalization of products. They are not packaging contests or consumer voting schemes. While those activities are engaging and leverage social media networks, they all take place after companies have decided which decisions about which products and services they’re willing to hand over to consumers. Customers are no longer be satisfied with making yes or no decisions or choosing between options on products offered.
As C.K. Prahalad and Venkat Ramaswamy point out in their article “Co-opting Customer Competence”, value must be co-created by the organization and the customer, rather than being created entirely by the producer. Co-creation not only describes a trend of jointly creating products. It also describes a movement away from customers buying products and services as transactions, to those purchases being made as part of an experience.
Andrew Needham, founding partner of Face agrees, “We need a model based on the principle of doing things with people not at them.”
But leveraging the experiences, skills and ingenuity of millions of consumers around the world is seen as a risky departure from the producer-centric innovation and development models common to many corporations. It means the end of traditional producer-consumer relationships, and suggests giving up control and realizing that the entire world could be the development team.
Are organizations ready to open up strategy meetings, the design process, and brainstorming sessions to the millions of consumers who as end users, customers, fans and followers may have an expert opinion or insightful suggestion? Do organizations fear uncovering complaints and rants about the products they throw over the wall and hope someone will like? The rant is already happening whether they hear it or not. If one organization isn’t listening to its informed and insightful customers, a competing one most certainly is. Organizations have reached out to their customers through social media channels and now it is time to take the investment in online tools and communities one giant step further.
In the telecom industry, consumers often find themselves at the mercy of their service providers. EE (Everything Everywhere), a European telecom giant, set out to change this perception, enhance the lives of their customers and provide an indispensable new service through its ‘Orange’ brand. Working with a team of consumers and experts from many industries, EE learned that people now rely so much on their smart phones that the thought of coping without them is almost unthinkable. They learned that when a phone is lost or stolen, it’s not the device that people miss, it is the connection with those they care about through photos, music and messaging. Replacing the device was less important to consumers than replacing their ‘stuff’. Giving them a new phone did not replace what they had lost.
Armed with this consumer insight, Orange developed Clone Phone, a service which delivers a replica of a customer’s phone. It comes fully loaded with all personal photos, videos, contacts, and calendars.
“Using social media in product innovation is not straight-forward; there are no time-tested industry practices to turn to as a guide,” say Amy Kenly & Bill Poston in their paper Social Media and Product Innovation. Collaborating with customers on Clone Phone was not a simple approach to using traditional social media strategies. Co-creation calls for a customized approach, as each relationship between an organization and its end-users is unique. While there is no standard process to obtain the best results, there are key factors that can optimize the co-creation process:
- Involve the right group of customers (know who the customers really are)
- Provide training and coaching to participants (ensure the roles defined, skills and tools are provided)
- Involve customer in all phases of product development and communicate back about how their ideas are used
EE’s Orange brand leveraged a co-creation process call ‘Big Talk’ to meet (in real time and in person) with customers and other experts. Says facilitator Communispace,
“We then spent two months working with a mixed group of consumers and our client team. The consumers were selected to represent a number of our clients key segments. We ‘up-skilled’ our consumers so they became part of our team.”
The launch of Clone Phone lead to EE’s Orange brand acquiring 250,000 new customers and tens of millions of pounds (£) in new revenue within the first 6 months. The telecom company experienced 30,000 uses of the Clone Phone service in that 6 month time period and saw a 15% increase in brand endorsements.
Lessons for Others:
Innovation is a major factor in determining an organization’s future. Despite the undefined and confusing nature of the roles of social media and customer collaboration, businesses must begin to explore how social media and the development of online communities can help them enhance their innovation and product development processes. Through online communities, brands can enlist and collaborate with their customers at every stage of the product lifecycle. Social media networks and communities make customers accessible but to harness their power and capitalize on the investment, strategies for collaboration must move beyond online surveys, beyond Facebook ‘likes’ and beyond consumer voting.
Michalis A. Michael , in a paper for DigitalMR examining the establishment of Private Online Communities, confirms “Communities create potential for genuine dialogue and relationship building both among consumer members and with the brand owner. If run correctly, these communities can develop into powerful research tools that also build brand advocacy.”
As summarized by Julie Wittes Schlack, SVP of innovation & design, Communispace, “If marketers want to get close to their customers—to understand them better, to make smarter decisions, to find the next big thing, to keep loyal customers, to outsmart the competition—an optimal mix of public social media and private online collaboration should be an essential part of their strategy.”
Marketing Week: Unilever to use social media to aid product development
Direct Marketing News: Deriving Maximum Impact from Online Communities
Kalypso White Paper: Social Media and Product Innovation
Submitted by: Denise Tighe, University of Waterloo, Social Media for Business Performance.
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