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Companies Tap into Consumer Passion
By Georgia Flight

(Business 2.0) – Let's face it: Your best customers, as a collective, are probably better informed than you are. In the time it takes you to organize a meeting about a new product, they can devour enough information to develop a more sophisticated understanding of your products and competitors than you could possibly imagine. They will always be more passionate than you, because you just work for a paycheck and they actually use your products day in and day out. Nobody knows better what to love about your products, and nobody knows better what failures need to be fixed. So why not harness that insight and use it to your advantage?

Don't confuse any of this with familiar techniques like mass customization (such as Nike ID, a website where you can personalize every aspect of your shoe), word-of-mouth marketing (recall Toyota's Scion launch), and faux-authentic underground ad campaigns (like Coca-Cola's fake Vanilla Coke fan site, which was later exposed as a sham). Such schemes, while clever (see "Reaching the Unreachables," page 108), simply maintain the traditional one-way flow of ideas from producer to consumer. Some companies have been able to foster a two-way dialogue, but in the near future, the smartest companies will reverse the flow altogether: Users will innovate products without the consent or even the knowledge of the companies that produce them. Advertisers will be a conduit for ads created by the viewers themselves. Marketers will shift from disseminating ideas to channeling them. Think of all this as the business equivalent of tai chi. (Just remember to breathe deeply.)

To channel consumer enthusiasm effectively, MIT professor Eric von Hippel recommends that companies design toolkits that let users create customized products within specific parameters set by the company. Pioneers in this approach include food industry supplier International Flavors & Fragrances, whose toolkits enable its customers to modify specific flavors, which IFF then manufactures. BMW has been using a Web-based toolkit to solicit ideas for two years, with as many as 15 consumer-innovated designs finding their way into in-car online services now in the prototype stage. Roomba vacuum maker iRobot recently got wind of users modifying the cleaning devices by mounting wireless webcams on the machines and using them to monitor their houses from work. Now the company is considering releasing toolkits to see what else users can come up with.

The tricky part for companies isn't discovering whether such passion for their products exists--if eBay has taught us anything, it's that there are enthusiasts for just about everything--but where those customers can be found. In his book Democratizing Innovation, von Hippel says that "users on the leading edge of a target market often congregate at specialized events or sites that manufacturers can easily identify." This involves more than ad hoc tactics such as shoe companies staking out inner-city basketball courts or automakers flocking to conventions where drivers flaunt their modifications; it's also about continuously mining specialized search engines like Technorati and Daypop for postings relevant to their businesses. It's about creating "brand community" sites where enthusiasts feel welcome, and making sure employees learn to apply the user innovations posted there.

If you don't find your passionate customers, you may be blindsided by them. Von Hippel sees user communities innovating independently of manufacturers. "If customers really want something, they won't wait for you anymore," he says. Witness the tragicomedy that is the music business: Paralyzed by its fear of digital piracy, the industry refused to embrace online distribution. Consumers got tired of waiting, and in the absence of authorized alternatives, the unprotected MP3 emerged as the most popular file format, while distributed file-sharing networks provided access to music that fans weren't allowed to buy through legitimate online channels.

Marketing is also being transformed by audience participation. The days when a 30-second spot on one of the three major networks was all a company needed to engage its audience have gone the way of Tab cola. Thanks to media fragmentation, "you'd need to advertise on 92 channels to reach that same audience today," says Bryan Eisenberg, co-founder of Future Now, a media consultancy. "Every evolution of buying has made consumers more educated. They are in control, and you have to listen."

The advertising industry is just starting to embrace this reality. Take the Converse Gallery, a website where enthusiasts sent in 24-second films inspired by the popular sneakers. Thousands of these spots poured in, and the best made it to Converse's television ads.

Then there's Current TV, the cable channel backed by Al Gore that launched in August. The network's aim is to steadily increase the amount of viewer-contributed content--or VC2, as Current calls it.

Why will users spend their time and effort to improve your products or praise your brand? Some don't even need to be customers to modify your products in ways that could be extremely useful to you. Some will innovate just for the sake of innovating. Because they're proud of their work, "users that innovate often freely reveal what they have developed," says MIT's von Hippel--leaving companies free to commercialize the result. GE Healthcare, for example, has incorporated into its MRI machines more than a dozen innovations originally developed by doctors in the field, including a device that allows patients to move their heads without disturbing the scanned image.

By the same token, "creating ads is a way for those with extreme devotion to talk about the brand," says Albert Muñiz, an associate professor of marketing at DePaul University. "It makes people feel better when they realize someone out there loves his VW Golf as much as they do."

Some executives may think this amounts to giving away the store. Every barrier that is torn down between producer and consumer may generate unwanted attention, such as the Republican National Committee's hastily shut-down Make Your Own Campaign Poster website, on which large numbers of detractors mocked the Bush/Cheney ticket in 2004. ("Ending our nightmare of peace and prosperity," one poster read.) Yet the fact is, misuse is bound to occur no matter what a company's stance on soliciting user content may be.

Overall, the benefits of inviting the right kind of attention--better products, reduced marketing costs, consumers who know you're listening--far outweigh the risks. Call it a mass-market version of the age-old strategy of getting what you want by making other people think it was their idea all along. The customer is still king, but with a little effort to channel his energies, you can be prime minister. -- GEORGIA FLIGHT