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Four Ways Consumer Packaged Goods (CPG) Companies Can Use Customer Communities to Drive Research and Development

Posted @ 1:56 pm by Tim Ross | Category: Community & Social Media, Strategy | 0 Comments

This is part two of our series on how Consumer Packaged Goods (CPG) companies can leverage web and mobile technologies to drive business results. View other articles in the series here: part one on increasing sales, part three on improving customer service, part four on mobile innovations, part five on connecting with shoppers through video, part six on utilizing web content management tools, and part seven on video analytics.

We all know that building customer communities is about more than just racking up “likes” on Facebook.  What do you do with that community once it’s built?  How do you continue to engage and provide value to them?  And of course—the Holy Grail—how do you get them to take any action once they’ve joined the community?

Proprietary communities make the answers to all of these questions slightly easier: after all, they’re designed with a particular brand or company’s goals in mind, and thus equipped to deliver next-level community engagement and insight.  Still, what do you do with that community once it exists, other than continuously sell to it … and thus begin immediately alienating some percentage of members?

One option is to tap into customer communities for market research and product ideas.  Brands can create “ideation” communities, turning devoted consumers into active focus groups.  By engaging consumers in the design of new products, and constantly checking in with customers to test everything from new product ideas to new tag lines, companies create a virtuous circle that gives consumers a vested interest in the brand, while giving product development teams real customer input.

1. Tap into Taste-Makers

Just as not everyone is going to join your community in the first place, not all of your community members are going to have, or want to share, great product ideas.  The ones that do, however, tend to be those people who either have great ideas or who will clue you into potential customer complaints.  By letting the creative types in your customer community contribute to what your company is doing, you can not only potentially improve product design and marketing, but also turn already-passionate customers into rabid, life-long fans.

Mountain Dew’s DEWmocracy campaign/community is a prime example.  The company asked its customer community to vote on a potential new flavor.  Out of seven initial options, the company selected the three most popular to further test in the community, asking for applications for taste testers.  Fifty of those applicants were selected, and then divided into three groups—Flavor Nations—depending on which flavor they preferred.  They were then charged with naming their flavor, designing the packaging, and then going out and promoting it.  Each “Nation” went out into their communities to drum up support for their flavor, earning Mountain Dew thousands of new customers.

The winning flavor (White Out) was billed as “the first soft drink designed by consumers,” which was interesting enough to help the brand gain even more customers.  And in the meantime, the campaign also created 4,000 die-hard Mountain Dew advocates.

Mountain Dew also recently provided an example of why it can be smart to restrict ideation to branded social networks only.  Its Dub the Dew campaign—an attempt to crowdsource a name for another new flavor—was taken over by trolls who pushed names like Diabeetus and Sierra Mist to the top of the list.  Note to marketers: There are no guarantees against hacking online, but you can hedge your bets by starting with a friendly community, rather than the unwashed masses.

2. Let Your Customers Be Your Focus Group

Not every piece of customer insight comes via a targeted poll, campaign, or question.  Sometimes it’s just a matter of listening to what your community is talking about.  Wal-Mart, for example, changed its tagline in 2008 from “Always Low Prices” to “Save Money. Live Better” in part because it discovered through its online community that moms loved saving money not so much because it made them feel efficient as that it made them feel smart.

3. Encourage Customer Feedback

Once you’ve built a relationship between the customer community and the brand, customers can become truly valuable additions to your product development process.  This can be particularly valuable for small-to-medium sized businesses that don’t have giant product development organizations.

Nature’s Path Organic, for example, uses its community to test new ideas and is constantly working to embed customer feedback into the product development process. “A company our size can execute on 5 to 10 new ideas a year at best,” Tom Newitt, the company’s director of brand management and research, has said.  “There isn’t a lot of room for error, and it’s vitally important that we let the consumer chime in on our ideas. We were finding it very hard to get that input consistently and cost effectively. ” 

4. Make it part of the development process, not an afterthought

Creating and nurturing a community is not a replacement for the other key stage-gates of your new product development process.  Nor is it a replacement for the other traditional consumer research requirements of this process.  It is critical to determine upfront when you are going to engage your customer community, for what topics, and how that will work virtuously with the traditional concept and concept/product tests that help to size and validate any business opportunity.  A well-designed process will help ensure your customer community feels as valuable—and valued—in the process as possible, while maximizing the learning that helps you achieve your business and marketing objectives.

 

Authors: Tim Ross, President of SolutionSet and Seth Diamond, Executive Vice President, Insights at CatapultRPM.


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