CRM Delivered by Co-Creating Products & Services

10 07 2007

Wired Magazine just completed an open source journalism (they call it Pro-Am Journalism) project called Assignment Zero that examines how journalists can work with readers to develop stories “in the open.”

Over 80 stories were compiled since March covering the growth of the crowdsourcing phenomenon across different industries and professions showcasing many of the open business model innovators we have posted previously like InnoCentive, SellaBand, and Threadless (among others) as well as leading thinkers.

One that stood out for me was an interview with Martha Rogers, Ph.D of Pepper & Rogers fame who led the customer relationship management and customer centric strategy movement. According to Rogers, product co-creation and its various subsets like peer production and crowdsourcing are taking CRM in entirely new and exciting directions. She believes that product co-creation will be a critical organizational competency to master in the future.

Here are some samples from the interview.

We’ve been saying one way to measure customer value is whether the customer is willing to collaborate. If you let me learn more about you, I get information on you, my customer, that I can’t get anywhere else. We have a give and take: you get something from me, I get something from you.

In the past, this was being built on a customer-by-customer basis. Now, it is no longer one customer at a time. Whether we know it or not, that customer is now posting these interactions on their blog. An important calculation done ten years ago was that it is possible for one person to be connected to approximately 150 other people. People move in and out of that connection, but we can’t handle more than that. This means that now, for each and every customer, we now have 150 relationships represented.

Companies need to move into the area of not just “you tell me” collaboration, but into co-creation. This could be for the next marketing message or the next product. When we look at the ability of companies to do this, we think about creating a “beehive culture.” When a bee looks at a flower, the bee is attracted to it because the flower has bright colors and is beautiful. But the bee will only go back to the flower if the nectar is good. If our customers don’t talk to each other, advertising is all we need to attract them. If our customers do talk to each other, we have to provide the nectar– true engagement–or they will eat us alive, then tell everyone if we are really cool or really bad. If we are a commodity, we won’t even rate.

It becomes interesting when we think about what we can do to collaborate with customers, and we help create things that matter to the customer and the company. Crowdsourcing can bring this into true alignment. Market research (on products like) cupholders in the car can only get you so far. We need to get things co-created by those people who are hungry to buy them.

Rogers explains how “trust and transparency” are core to developing the right relationship with customers and that product co-creation is an effective means to this end.

“(In answer to fears of organizations’ losing the ability to control customers) Wake up; it is already lost! There was control as long as the messages came only from the company. Those days are long gone, and we can’t wish them back. In a world where there is no control, what can you do? The best thing is to play a part, be present, and direct some of the traffic. We can’t try to put a structure on crowdsourcing. The real control comes from one thing–the ability of companies to be trusted by their customers. They will allow mistakes, but this only comes when the customer trusts the company.

How do we do this with shareholder value and profit? Building value for tomorrow is intertwined with employees trusting the company and customers trusting the employees. We need to figure out how to bring all these interests into alignment. The constituents include the brands, the product managers, the employees: none of these pay the company money. The customers do. The shareholders have to back it, and management has to support it.

Crowdsourcing doesn’t work as well–and trust can’t happen–when there is no alignment. For example, I heard a story on NPR about the loan industry and trust. These loan companies were originally very successful, and the company owners became billionaires. There are now a lot of loans going bad, and employees are blowing the whistle. These employees were told to make a sale no matter what, basically being told to lie if necessary. It must not have been very much fun to work there. Crowdsourcing for a company will only work when we allow customers to make the best decisions they can and those customers are served well by employees who like to serve them. There is trust.

You can read the entire article and the 79 others here.




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