Walter Adamson

Using social media to better product development

In their report The path to successful new products McKinsey found that the businesses with the best product-development track records do three things better than their less-successful peers:

1. They create a clear sense of project goals early on;
2. They nurture a strong project culture in their workplace; and,
3. They maintain close contact with customers throughout a project's duration.

Doing these things created real advantage - "The teams in our study that embraced these tactics were 17 times as likely as the laggards to have projects come in on time, five times as likely to be on budget, and twice as likely to meet their company's return-on-investment targets".

With respect to project goals, the main finding was that clarity of scope was the main differentiator between high and low performing companies. That hardly qualifies as an insight, but it obviously requires ongoing attention in every project.

With regard to scope, requirements, and communication Wendy Soucie has a really good presentation Project Management, Social Media, and Productivity and there is also The Social Media Project Manager. Social media can play a strong role here in making sure that everyone is on the same page, and that changes and variations are totally understood across the team, and thus help manage risk and cost.

Customer development

McKinsey reports that the successful innovators "kept in close contact with customers throughout the development process. More than 80 percent of the top performers said they periodically tested and validated customer preferences during the development process, compared with just 43 percent of bottom performers. They were also twice as likely as the laggards to research what, exactly, customers wanted".

Social media not only plays a key role in this traditional sense of keeping in contact with customers, but also in two new dimensions. Firstly it speeds the customer development path compared to more traditional contact-feedback methods e.g. focus groups and "market research". There are many examples such as IBM sMash and Starbucks and my own presentation From Innovation to Wealth Creation - Getting Closer to Customers Faster.

Secondly it more naturally enables the opportunity, oft promoted by Axel Scultze, to bring customers right into the product development process. Right in starting from the strategy, the clarity of goals, then the development cycle, the trials, and the promotion and launch.

Doing this requires some courage, but it's success becomes a self-fulfilling prophecy as those customers become advocates. They are clearly in the process because they are potential users of the product/service, and they will therefore have their own influence and networks among similar clients. That's where WOM comes in and builds upon the success of the lifecycle engagement of such customers in the product development.

And money can't buy that, no matter how many focus groups and how much "market research" you do!!

How do you use social media to improve product development, and what's the impact?

http://xeesm.com/walter

My Starbucks Ideas 0.03% become action

Starbucks digital strategy director, Alexandra Wheeler, explained some interesting aspects of their "My Starbucks Idea" community in Brand Week ( Elaine Wong's Why Starbucks Is the Top Brand on Facebook Aug 12, 2009).

 

Using social media for cocreation of services and product innovation is "well known to those who know" but is off the radar for 99% of people who think about social media as being just a new channel for marketing or "campaigns".

 

The My Starbucks Idea social media initiative has clearly been rated a big success by Starbucks, see below, and what I found especially interesting the statistic on how many ideas actually make it into implementation.

• 75,000 ideas have been submitted
• 25 ideas activated in the first year
• that's 3 ideas activated from each 10,000 submitted, or 0.03%

It's a minute number of ideas getting through into action.

 

On the other hand, for Starbucks to have organised or contracted or worked internally to come up with 25 filtered ideas that were worth innovating in a year and had strong customer resonance would have cost them an absolute fortune - and would have been far more risky.

 

So yes, an outstanding result for Starbucks.

 

Here's the full answer about My Starbucks Ideas:

 

Alexandra Wheeler: My Starbucks Idea last March, an online community where our customers and partners—as we like to call our employees—can go online and submit their ideas, vote for other people’s ideas or add to ideas in the community. They can also see what Starbucks is doing with those ideas through our “Ideas in Action” blog. It’s a pretty robust community. It has over 75,000 ideas in it. In its first year, we activated 25 ideas through that program. It’s a significant way to co-create through that program, to inform business decisions that were underway or forming. [For instance,] we wouldn’t have had music in our stores if it wasn’t for our partner here, Timothy Jones, or [so many different] different creations of our beverages, to take what’s happening in store and bring that online. It’s a natural extension of the brand through that experiment, and through our success with that, we started to expand beyond that. It was important for us to go where consumers are and to provide a valuable and meaningful brand experience.

 

What I think is also interesting are the ramifications and lessons about setting expectations among the people submitting ideas, given that such a minute number make it through the system. What continues to motivate the 99.97% of ideas from people who are not making any progress into action?

 

That would be an interesting topic in itself.

Cocreation of Marketing Language

Rob Birgfeld at SmartBlog recounts a great example of product cocreation by IBM.

The point of his post was not the grass-root creation of the product, which was impressive enough, but how IBM picked up the language and "keywords" those in the communities used to talk about the product.

After much work building a significant community, IBM was able to gather data from comments on its blog, in its forum, on Twitter and on YouTube — and not just data on how to make the product better. The IBM team looked at how the community was describing the product — the benefits, the features — and integrated that language into the marketing materials.

This is a real insight for many companies wondering about how to use social media, how to use it more deeply, or the benefits of such social media collaboration in product development.

As Birgfeld says:

To many businesses, this is the inverse of their marketing strategy. They define their messaging either in a closed room, cross their fingers and hope the message spreads across social media channels. That’s only using half the value of social media. Interacting and engaging on Twitter, Facebook, LinkedIn and blogs continues to be key in a successful social media strategy, but it’s time we take a closer look at the data we might be ignoring. Getting people to talk is great — but monitoring how they’re talking and integrating that language throughout your marketing campaigns can help extend and expand that conversation. A good message will travel regardless of where it originates. But if you use your community to help identify that message, you’re arming yourself with the best market intelligence money can buy.

While marketing and sales are the poster boys of social media, it is most likely in these "back office" efforts, whether they be in product development, or product support and service, where very significant benefits lie for business.

See Axel Schultze's post Social Media Rock Star or Social Media Business Consultant?

It's important for companies to develop strategies around these kinds of activites, and to think through the dual roles of branded and non-branded communities and how they interplay. And also how the ongoing dialogue is maintained and the enthusiasm maintained after say a new product release.

There is not doubt that by IBM developing and harnessing people in product design, and giving communities and people that sense of ownership, they have created a force more powerful than any marketing dollars could buy.

By the way the product is sMash, which evolved from IBM's Project Zero "community-driven commercial development" which is a great example of cocreation and well worth examining the site.