Remember chat rooms? They first began in 1980 but didn’t become widely popularized until 1989 with the broad adoption of email and specifically when AOL formally launched and branded online communities as “chat rooms”. However, it took nearly another decade for market researchers to realize the potential of tapping into this resource. The evolution of the online community as a source for market research progressed further with the parallel launch of three consumer websites in 1999: RateItAll.com; Epinions.com and Deja.com which were the first to collect customer reviews of everything from products to assessing how presidential (or not) Bill Clinton was during his impeachment trial. Within a year, the three sites had collectively amassed over a million reviews – a remarkable quantity given the period. Now, assigning a star rating to everything from our dining experience to public bathroom cleanliness is standard practice.
Since then, market research has evolved beyond passively listening to actively engaging consumers, largely via social media online communities which have been around for over 15 years but not well leveraged or understood for much of this time. Today, market researchers directly tap the insights of the online community to inform brand and product strategies, soliciting feedback and input in a collaborative co-design approach. The online community is typically awarded gift certificates or bragging rights to say, “I saw it first” and “I helped design this”. Market research from online communities evolved this way because it had to. The online community has a voice. And it’s loud.
Listening to that voice is not as simple as it sounds. First, there is the technical challenge to overcome. With hackers, bots and disaffected consumers trolling and flooding the internet, CIOs are today’s yeoman. Marketers often quote the statistic that a bad experience will be shared at least nine times. With today’s standard of star-rating, community votes and open commentary reviews, that bad experience is amplified at least tenfold.
Second, reducing the noise and distilling all the chatter into cohesive messages and trends is complicated. Interpreting those messages and insights to translate them into new product opportunities is an art-meets-science skill possessed by only a small group of remarkable market researchers. However, the flipside is that the potential value of unlocking the collective brain trust of the online communities comprised of stakeholders (customers, fans, employees, suppliers, etc.) to inform brand and product strategies is immeasurable, once the technical challenges are overcome. This is precisely where CPG companies should make investments – to hire and retain those researchers, product developers who understand how to engage and harness the insights of online communities.
The Benefits of Online Communities
NEW IDEAS: Co-creation is, perhaps, the biggest trend in market research today and has been enabled by the internet. The power of the online community has fostered the process of idea generation and has allowed CPG companies to work in tandem with their customers to fine-tune those ideas and implement them in the marketplace. By opening the idea generation process to customers, there is a greater opportunity for new, fresh ideas through co-creation.
BIG, BIG, BIG SAMPLE SIZE: Collecting insights from online user communities affords market researchers with enormous flexibility. Given the vast population online (IDC’s 2017 report lists 6.3B mobile phones in use worldwide), researchers can choose to broaden or restrict the parameters for inclusion and exclusion, vary the duration of the study and/or include as many responses as they choose. The potential is vast, low cost, and readily accessible.
COST SAVINGS: No need to wait for the Nielsen revenue report following the launch of your new product to see if it delighted or repulsed consumers. Now, you can take your CPG product concept to the online community and ask what they think before you invest in its manufacture and distribution. By leveraging video, live chats and teleconference, IM and more, CPG companies can get the reaction they seek in real time, at a fraction of the cost previously paid to float a product in front of a live test audience – let alone waste money further investing to bring a dud to market.
REAL-TIME ANSWERS: The intangible benefit of being able to interact, en masse, with the consumers as a product developer, research technician, marketer or executive in real time is one taken for granted. Society expects instant access, rapid-reply texts and immediate “likes” from others. We’ve forgotten what it’s like to endure the painful stepwise and arduous process of pre-meetings, meetings and follow-ups with intermediaries to plan, collect and disseminate insights. Today, any stakeholder can ask a question – and get an immediate response – by participating in an online community chat.
THE MILLENNIAL PERSPECTIVE: Everyone wants to know what Millennials are thinking. This generation of digital natives knows of no other way to research, purchase or review a product – except online. Conducting online market research guarantees that the study will capture their perspective since millennials almost never unplug.
BUILT-IN BRAND LOYALTY: Online market research drives pre-launch brand awareness and establishes a solid foundation to leap from once the product is on the market. The benefit of having brand champions – even before a product is launched – can be readily leveraged to foster a sense of excitement and anticipation for the launch. Pre-launch brand champions feel invested in the success of the product and pending launch because they were involved in its co-creation. This emotional commitment is earned and can be highly leveraged with effective execution.
Co-creation with Online Communities Drives New Business Opportunities
Today’s CPG marketplace is full of examples of successful companies that are diving head first into all the opportunity that online communities offer.
Nestlé Group has embraced an intriguing approach, leaving a lot of white space and little competition in a crowded coffee market. They embraced the online community in a B2C approach to develop drinking coffee as a lifestyle. To launch their Nespresso® coffee maker, they retained George Clooney to help them develop an e-collaboration. One of the best outputs of that co-creation effort was a program requested by the online community to make it easy to return and recycle the used coffee capsules.
LEGO has been on the rise for several years after an extended slump ever since they embraced co-creation. Always innovative, they opened channels to their customers and solicited new design ideas. Once an idea garners 10,000 votes from the online community, LEGO decides whether to bring the design to market. Recent examples of seven-figure revenues resulting from online community participation in co-creation include the LEGO movies and the smash success of the design inspired by NASA’s “Hidden Figures” lady scientists.
Anheuser-Busch is a global leader whose profit margins have been rapidly eroding with the rise of craft beers. How did they respond? They tapped the online community and asked for help: 25,000 consumers jumped in to assist in the co-creation effort and voila, Black Crown® a golden amber lager was launched with much success.
General Mills has taken co-creation to a whole new level. With their G-WIN (General Mills Worldwide Innovation Network), they’ve invited proposals from suppliers, farmers, retailers, customers – anyone and everyone – on anything and everything from operational efficiency to packaging to sustainability to fair trade.
Doritos® pays $1M to the consumers with the best home-made ad, and, if that isn’t enough, they flip the bill for the Superbowl® $5M cost to feature whichever ad was voted “best” by fans. Consistently, year after year, the home-made Doritos ads are fan favorites. This is co-creation by an online community at its finest.
Online Communities are Being Shaped by Today’s Trends
There are a number of emerging trends that are changing the shape of the CPG industry. Recently, the role of the CIO has evolved to a pinnacle of prominence. Tasked with everything from pre-empting hackers to leveraging mobile and location-based services to enable target marketing, the CIO is at the forefront of pretty much everything that is trending within the CPG industry. For example, CPG companies have gone direct-to-consumer. It’s been said that “He who has the data shall be King.” Predictive analytics based on click rates, viewership, engagement level and numerous other metrics allows market researchers to collect demographics, shopping behaviors, preferences, ratings, interests and more on demand to instantly inform product development and go-to-market strategies.
So, What Have We Learned?
Online communities afford market researchers with a wealth of information. Largely offered freely in exchange for no more than first dibs and early access when the product is launched. Harnessing the voices online via social media and direct, active and personalized engagement is the most effective way of capturing true insights and feedback valuable enough to inform product development. Moreover, that 1:1 engagement, however brief, can spark consumers’ interest and loyalty in your brand so that they become champions of your product and willfully participate in co-design, as well as recruit others from their own networks to do so. So, what’s the bottom line? Listen more than you talk and your online community will spill all the secrets you couldn’t ever pay enough to uncover.