Organization Name: C&A Marketing
Industry: Online Retail
Web References: Website
Description of how social media is used for business performance
Some of the most famous examples of social media for product development come from the food industry – for example, the Lay’s Do Us a Flavour flavour creation competition (and many similar competitions, like Mountain Dew’s Dewmocracy),or the Doritos’ Crash the Superbowl contest.
There are also examples of crowdsourcing or crowdfunding for social justice causes or similar charities; Kiva is a good example of this type of activity. And then there’s Kickstarter, the giant crowdfunded product market, where, the theory goes, good products will rise to the top and be funded, and bad ones or poorly marketed ideas will fail to get funding.
These examples follow two different models of social media use for product development:
- Idea creation (Lay’s, Doritos): The company poses a question (What would be a good chip flavour?) and consumers engage with the company to answer the question
- Crowd selection (Kickstarter): Ideas are suggested, and the crowd engages directly with the inventor to selects ideas they think are good and ignore bad ones, thus promoting the development of theoretically better products.
Both of these models of social media product development have potential benefits, and potential pitfalls.
In Idea Creation model, the primary value of the exercise seems to lie in marketing/advertising, not in product development. By holding a flavour contest, Lays drives consumer engagement with the brand, interest in the new flavours spike, and ‘buzz’ is created. Mountain Dew’s Dewmocracy contest saw a spike in Facebook fans and conversations about the brand. The quality of the flavour selected is secondary to the contest as an advertising exercise.
The problem with the Idea Creation model as a model for product development rather than marketing is the amount of ‘noise’ generated – you may surface many, many ‘bad’ ideas for every potentially good one, and the company will inevitably have to sort through spam and other undesirable submissions as well. There is little data available for the continued success of Lay’s flavours after the contest ends, but there have been flops, such as 2013’s Maple Moose flavour, which was discontinued due to low sales.
In the Crowd Selection model, companies present ideas to the crowd and (with crowdfunding a la Kickstarter) potentially fund the project as well. This allows companies to test product ideas or make products that might not have been made without crowd support. Popular ideas also benefit from crowd selection as a marketing exercise, similar to Idea Creation but often in smaller scale.
However, the crowd is not involved in the product creation stage of development – only in the ‘testing’ stage – acting as sort of a very large focus group for product ideas. This avoids the ‘noise’ problem of Idea Creation, but eliminates the potential benefit of crowdsourcing as a way to discover really good ideas that the company hasn’t thought of yet.
So, is there a way to use social media to crowdsource product ideas to actually develop better products (not just market your company), without dealing with large amounts of irrelevant noise? And can that be combined with the benefits of the crowd to test ideas that are further along in product development?
The case of C&A Marketing offers a third model that answers these questions – the development and testing of actually valuable products, harnessing the crowd as a tool to do so.
The third model: Social Listening
C&A Marketing does “nine figures annually” in sales on Amazon, but you’ve probably never heard of them – they market products under many different brand names and don’t seem to have a social media presence whatsoever, which makes them an odd choice for an article about social media for product development, I’ll admit.
But they remain one of the best and most interesting case studies for social media in product development that I could find. Their secret is social media for social listening, rather than engagement.
C&A Marketing’s business model is this:
- Identify a product, for example, portable speakers, or cell phone cases
- Review social media/comments for features that people wish their speaker had. An Amazon review that says “I wish this was waterproof”, for example.
- Design a portable speaker based on the social listening exercise, hire someone (usually in China) to make it.
- Sell on Amazon. If it does well, continue selling, if not, stop producing it and try again.
This is also an iterative method of product design. If their speakers do well, C&A Marketing will continue ‘social listening’ about that product, looking for new ways to improve the product and meet customer demand. If a product does not sell well, they eliminate it – effectively using the crowd to test a product idea.
In this way, C&A Marketing is able to nimbly respond to customer needs without really engaging the customer the way more typical crowdsourcing activities do. This allows them to focus in on features that will actually make products better, and allows them to provide customers with what they want, with the appearance of just ‘knowing’ what that product will be.
Because C&A Marketing is so diversified in its product offerings, brand recognition is not very important – they don’t need to use social media to market themselves. However, when you don’t have brand recognition, you need to compensate by having products that people actually want – which social listening enables them to do.
Lessons for others:
For many companies, C&A Marketing’s strategy will not be directly transferrable. My belief is that some companies may struggle with lack of brand recognition/engagement with customers – critically important in many businesses, especially those who are not diversified enough to remain afloat if one product fails. Other companies may not have the resources to devote to constant social listening, the foundational element of C&A Marketing’s business.
However, there are still lessons to be learned:
- Social media gives you access to the thoughts of many, many people, on many topics. If you listen, you sometimes don’t have to ask questions to get answers.
- Asking direct questions drives marketing activities but may yield “junk” in terms of legitimate product development. Social listening is not marketing oriented, but may enable companies to create better products. Authentic suggestions or desires may be found in complaints about existing products, for example.
- Because social listening is a ‘silent’ activity, companies that leverage it may be able to create products that seem ‘tailor-made’ to their consumer, as if by magic. This degree of responsiveness may be better appreciated by the consumer than simply asking consumers what they want.
Submitted by: Michelle Maw
To contact the author of this entry please email at: mmaw@uwaterloo.ca
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