Last Updated Oct 2, 2008 5:41 PM EDT
The Idea in Brief
Many Internet superstars owe much of their success to the active and passive contributions made by countless people from outside their organizations. Consider:
Wikipedia's cyber-encyclopedia is written and updated by unpaid amateurs--creating a free resource that's as accurate as Encyclopaedia Britannica's online edition.
Ebay, the online store, leaves it up to customers to fill its "shelves" with goods to sell.
Skype, the Internet phone company, incurs almost no capital costs because its system is built on the unused processing capacity of its customers' personal computers.
But as Intuit's founder Scott Cook explains, user contribution isn't just for online enterprises. Forward-thinking businesses in traditional industries--from consumer goods to groceries to automobiles--have started leveraging it. And they're reaping impressive benefits: better customer service, reduced costs, smarter innovation.
How to get user volunteers working for your company? Start by understanding the possibilities.
The Idea in Practice
Understand the Possibilities
User contribution systems can help you better handle many important business activities. For instance:
Customer service. Host an online support forum, where customers can answer each other's troubleshooting questions gratis. Power users can often answer tough questions even the company cannot.
Marketing. Engage customers with your products by giving them a forum for exchanging personal experiences.
Procter & Gamble learned that young girls feel uncomfortable viewing feminine hygiene product ads on TV around friends and family. P&G created its BeingGirl Web site to let teens and preteens anonymously share questions, experiences, and advice. The site discreetly advertises P&G's Always and Tampax brands. It's three times more effective as a marketing tool than comparably priced TV advertising.
Capital resources. Get customers to contribute needed capital or to reduce the need for capital expenditures.
Honda captures real-time traffic data from Honda owner's GPS systems. Each vehicle automatically reports its speed and location, forming a data stream Honda aggregates with other traffic data to provide reports on traffic jams and other conditions to Honda drivers subscribing to the company's InterNavi service. Users get enhanced traffic information; the company spends nothing on the capital infrastructure.
Design and development. Capture user contributions to tackle design challenges.
The Mozilla Foundation's open source Web browser, Firefox, was created (and is regularly updated by) communities of unpaid volunteer developers. This low-cost business model has made Mozilla one of the most "profitable" nonprofits.
Production. "Delegate" some or all of your production process to users.
Fox Television's American Idol show relies on viewers (through their votes for performers) to make decisions producers traditionally make. It relies on amateur performers to provide entertainment usually provided by high-priced stars.
User contribution puts control in others' hands, which scares some managers. To move their mind-set:
HBR Article Collection
by Gary Hamel, Gary Getz, James P. Andrew, Harold Sirkin, Darrell K. Rigby, and Chris Zook
Nine out of 10 new products fail. With such a meager ROI, how can your company fund the innovation so essential to profitable growth? Use these strategies to squeeze more out of every dollar you invest in innovation: 1) Turn all your employees into innovators. At W.L. Gore, employees allocate 10% of their time to conceiving new applications for the company's materials. 2) Energize a congregation of volunteers--consumers who love tinkering with the very problems facing your firm. Google's annual Code Jam competition invites developers worldwide to tackle its toughest software problems. 3) Use small, low-cost, under-the-radar experiments--a quick-and-dirty test run of a product prototype in one venue, for example--to uncover an idea's potential and problems. 4) Make savvy choices about when to use strategic alliances, joint ventures, and licensing to commercialize new ideas. Going outside your company's boundaries brings rewards and risks--so select the right kind of partnership to generate the biggest profits.
Harvard Business Press
by Charlene Li and Josh Bernoff
Corporate executives are struggling with a new trend: people using online social technologies (e.g., blogs) to discuss products and companies, write their own news, and find their own deals. This groundswell is global, it's unstoppable, it affects every industry--and it's utterly foreign to the powerful companies running things now. When consumers you've never met are rating your company's products in public forums with which you have no experience or influence, your company is vulnerable. In Groundswell, Li and Bernoff of Forrester, Inc. explain how to turn this threat into an opportunity. Using tools and data straight from Forrester, you'll learn how to: Evaluate new social technologies as they emerge; Determine how different groups of consumers are participating in social technology arenas; Apply a four-step process for formulating your future strategy; and Build social technologies into your business--including monitoring your brand value, talking with the groundswell through marketing and PR campaigns, and energizing your best customers to recruit their peers.
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