Link the external to the internal

Companies that want to benefit from their customers’ creativity need to adopt strategies that link their external customer innovating environments with internal product development teams.

One way to achieve this is to establish new organizational roles to connect the virtual customer environment with internal product teams. For example, Microsoft has specially designated employees called “buddies” who play such a bridging role. Buddies interact directly with customer contributors in the VCE and ensure that their inputs are fed to the appropriate people within the organization. This also allows the company to participate in the conversations that occur in the external innovation forums and contribute to the customers’ hedonic experience. Our research shows that customers place a high value on their interactions with their buddy. As one Microsoft customer told us, “[my] interactions with the buddy have been extremely satisfying — they are very knowledgeable and I have really enjoyed trading ideas with them.”

Another way to connect the VCE with internal product teams is to create new communication mechanisms. Some of the companies we studied have used formal communication methods such as white papers to provide vision and direction to customers’ innovation and value cocreation activities. However, informal mechanisms can be equally important. For example, Germany’s SAP Aktiengesellschaft holds “ask the expert” discussions in its VCE that bring together company insiders and customers to discuss a wide range of product and technology issues. Companies have also started using blogs and wikis to facilitate informal conversations between internal experts and customers. A good example is Microsoft’s Channel 9 — an online forum that incorporates technologies such as blogs, podcasts, vodcasts and wikis to promote open conversations between customers and Microsoft employees.21

A third way for companies to integrate their VCE initiative into their overall innovation strategy is to adapt or modify their product development processes. This might include instituting new processes to respond to customer ideas and suggestions, to select appropriate innovation projects for the VCE, and to manage intellectual property rights. It could also include managing the risks associated with the VCE initiative and revamping the culture of product development teams to include customers as partners in innovation. As one manager who had led his company’s VCE initiative told us, “We had not given much thought to these [processes] early on … however, some of these issues eventually took on a life of their own, and as we discovered they were issues not only for us but for our customers as well.” Indeed, we found that instituting appropriate processes to accommodate the VCE activities and their outcomes can go a long way toward enhancing the customer experience and ensuring returns to the company.

Manage customer expectations.

An important issue in establishing an effective collaborative innovation process is managing customer expectations and minimizing potential negative outcomes. This requires a high degree of transparency. Our studies indicate that there are three types of transparency: role transparency, process transparency and outcome transparency.

Role transparency has to do with customer perceptions about the specific role or roles they are playing in the VCE. Process transparency relates to the clarity of specific innovation processes — the nature of the processes, who is involved, the time sequence, and how the processes relate to the company’s other business processes. Outcome transparency involves keeping customers informed about what is happening to their inputs.

Clarity about customer roles, innovation and value creation processes, and outcomes can reduce the potential for misplaced customer expectations regarding their involvement and lead to a more positive customer experience. Strategies to enhance transparency vary according to the VCE context. For example, some companies have tried to enhance clarity by making customer roles and processes explicit through published policies and guidelines. Open discussions with the customer community about customer involvement may also help clarify perceptions and expectations. Maintaining archives of customer interactions is another useful practice. Still another is periodically reporting to customers on the status of product improvement ideas that came from the VCE.

Making explicit the company’s policies regarding intellectual property rights is critical for enhancing outcome transparency. Microsoft, for example, has instituted a Community Solutions Content program that allows Microsoft MVPs to author product support content that is hosted within the VCE as part of the company’s product knowledge base but “owned” by the community. As one Microsoft manager told us, the key point is to bring clarity to “who owns what intellectual asset” and to communicate that effectively to the customer community. Strategies and practices founded on the tenets of good customer relationship management can lead to positive customer experiences in the VCE.22

Embed the VCE in customer relationship management activities

The final strategy companies can use to improve customer experiences in the VCE involves embedding their VCE initiatives inside the company’s overall customer relationship management framework.

This lets the company enhance the customer experience by finding synergies with a customer’s other product-related interactions (for example, offline product events).

An effective way to do this is to arrange a customer innovation summit that brings together selected customers from the VCE and company product development teams and managers. Microsoft, for example, invites its MVPs to a two-day annual event at the company’s Redmond, Washington, campus. The event features technical sessions as well as opportunities for customers to connect with other MVPs, build relationships with managers and provide feedback to Microsoft product development teams. Other companies have pursued similar practices. BMW, for example, invited 20 customer innovators who contributed to its Customer Innovation Lab to meet with engineers in Munich. Ducati includes contributors to its Tech Café at an annual gathering focused on next-generation products.

Another mechanism is to organize “VCE brand fests” — product marketing activities that begin in the virtual environment and continue through offline events held in areas where customers live. Samsung, for example, has started pursuing such strategies in an effort to find synergies between VCE activities and its overall approach to brand management. Although these kinds of practices may not be appropriate or feasible for all companies, they do suggest potential opportunities to enhance the customer experience when customers return to the virtual environment later on.

THE STRATEGIES AND PRACTICES that we have presented enhance the customer experience in the VCE to varied extents. What’s more, the costs of implementation can vary widely. Therefore, companies need to be careful about selecting and implementing a portfolio of strategies and practices that meet the needs of the types of customers they want to engage in value cocreation. Designing and implementing the right system can lead to positive outcomes in terms of both innovation and customer relationship management, and this highlights the broader message from our research: Companies should view their VCE initiatives as an integral element of their overall innovation and customer strategy.

(Reprint #:49313)

Pages: 1 2 3