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Author's profile photo Vivek Bapat

Move Over “Made in China”; “Made by Consumer” is the New Sheriff in Town

This is an age of unprecedented individual empowerment unlike anything we’ve seen in history. Armed with real-time information, social media and mobile phones, today’s consumers can make or break brands in the blink of an eye. On Yelp alone, over 100 million consumers check or provide reviews on all kinds of businesses every month. Gone are the days of businesses pushing out products and dictating the  terms. The power shift towards consumers is accelerating, and their voices are only getting louder.

/wp-content/uploads/2013/10/consume_289988.jpgIn my last blog post (“Why Knowledge Is Becoming The Ultimate Currency”), I considered the rise of the consumer as one of the five most critical imperatives for businesses to help shape the new “creative economy” and ultimately make our world run better. It all starts with fundamental shift in mindset – turning customers from “consumers” to “co-innovators”.

From “consumers” to “pro-consumers”

For generations, businesses have defined “customer” around the idea of “I produce, you consume.” No more. Increasingly, leading organizations in both the public and private sectors see customers as the co-innovators for their products and services. Many are now using social, mobile and cloud technologies to include customers to contribute ideas, c0-design, and co-manufacture new products.

This strategy is paying off.

With the recent hoopla around the launch of the new iPhones, people may have missed a similar launch of the MI-3 smart phone from Apple’s main rival in China, Xiaomi, on September 10. While Xiaomi global revenues are only a fraction of Apple today, in the second quarter of 2013 they surpassed Apple in market share in the fast-growing Chinese market for the first time in history. In three years since its founding in 2010, Xiaomi has reached a value of $10 billion more than what Microsoft recently  paid for Nokia. Xiaomi sees themselves as an Amazon for mobile devices,deriving revenue predominantly from services and solutions built around their handsets. But what’s different about them from others in the space is their passion for actively soliciting and including user feedback into both the design of their handsets and their service offerings. A new version of their MIUI software (Android) is released every week based on user suggestions. Weibo, the Chinese equivalent of Twitter, is continuously used to poll users about which features should be included and how they should work. Their entire business is based on customer driven design, markedly different from Apple’s “We know better or best” principles.

Doritos is another example. They invited their customers to help create the best Super Bowl commercial (“Goat 4 Sale”) in 2013. Similarly, when designing the new bottle for its beer, Heineken took a smart approach of using social collaboration tools to invite its customers and patrons to help with the design, and you can see the winning designs created by their customers.

The idea of crowdsourcing itself is not new. But the  blistering scale and pace at which it is being deployed to disrupt business models and drive new innovation is staggering. Today, individual brain power, regardless of where it may reside, is collectively being harnessed to solve humanity’s grand challenges through organizations like X-Prize, or simply as a mechanism for simple tactical problem solving (TopCoder, Tongal, Mechanical Turk). Whether motivated by prize money, recognition amongst peers or simply a sense of purpose, individuals have unprecedented opportunities to contribute and share their expertise and intellect through the use of technology. Businesses must use this unlimited source of open potential to re-imagine how they engage, interact, and bring their customers into their design processes.

My own employer, SAP, is using design thinking principles of feasibility, desirability and viability to engage with our business customers. The idea is to bring our customers and our customers’ customers, typically end consumers, into a moderated workshop setting where everyone works together to design a new offering, a new business process or even a new business model. Typically, theresults for both SAP and our customers are spectacularly better than those that may have been achieved by the traditional focus groups or trend analysis.

Re-imagine the customer experience

Building the best product is no longer enough. In a recent interview with SAP, Don Tapscott, a global thought leader and futurist emphasized that companies must transition their focus from “products” to “experiences”. To win this new generation of consumers, businesses have the opportunity to embrace new, innovative technologies to bring entirely new experiences to their customers. Here are a few thoughts:

Old experiences. New extensions – picture a classic scene of screaming fans at a jam-packed sports stadium. To many, that’s the ultimate customer experience – immersive, exuberant, and tantalizing. Yet the San Francisco 49ers did not stop there. By combining their analytics tools with the latest mobile technology, the 49ers offer their fans something far beyond beers and cheers. From up-to-the-minute stats to free “Happy Birthday, John” ice cream coupons on your phone, the 70-year-old NFL franchise is reinventing their fan experiences just as much as they are reinventing their team.

Redraw your boxes – mobile and cloud technologies are giving businesses new ways to think outside of their traditional boxes. Tesco, a British grocery giant, is bringing the grocery shopping experience to places few had thought possible before – subway stations. Consumers in South Korea can use their mobile phones to shop for groceries while waiting for trains. By the time they get home, dinner ingredients will be ready at their door!

Segment of one – most businesses develop their products and services based on “segmentation”, a notion that customers with common characteristics (age, income, gender, etc.) will think, act and buy alike. New technologies such as Big Data, real-time analytics and mobile are making “hyper-personalization” a new reality – businesses can prescribe 1:1 offerings to customers, much like how airlines price their seats for each customer based on overall supply and demand. Take a look at how Groupe Casino is delivering this kind new personalized retail experience.

Predict. Not respond – “Respond quickly to customer needs” has always been the mantra for good customer service. In other words, respond to any scenario by doing the best you can, as fast as you can. What if businesses and governments could predict what can happen before it occurs, and do something about it? That’s what New York City is doing for evertyhing from parking space management through fire prevention. By using Big Data analytics to plow through all sorts of data from 19 city agencies, the City now uses its own geek squad to better optimize public services

By 2020, 3 billion people will enter into the middle class and spark a consumer led revolution around the  business world. Exponential advances in technology will make them the most powerful and demanding generation of consumers ever. Thankfully, the same technologies offer businesses the potential to revolutionize their own business models and fundamentally redefine their relationships with customers.

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