Go to Google Maps Mania and prepare to be amazed. This labor-of-love site, which is run by Mike Pegg, a Canadian software sales manager, has logged thousands of innovative mashups based on Google Maps. It’s an impressive testament to Google Maps’ flexibility and a great ad for the service.
But you don’t have to be a high-tech company to tap into customer enthusiasm. Karmaloop is a Boston-based maker of ultra-hip street clothes. It has a program that enlists enthusiastic customers to become reps for the company, earning points for referring friends to buy clothes. The company also encourages reps to snap photos of cool new fashion ideas that they see on the street and upload them to a website. In making that feature available, Karmaloop actually offloads some of its product development costs to its customers.
Welcome to the new world of customer engagement. Author and consultant Patty Seybold calls it Outside Innovation and she’s written a book by the same title. Seybold believes that it’s increasingly practical and desirable for businesses to encourage customers to innovate around its products using rich interactive media. She believes that many companies should be managing as much as half of their new product development this way.
That may be a difficult concept for a lot of businesses to accept, but once you get your brain around the idea, it’s exciting. In her book, Seybold cites Lego Mindstorms, a line of programmable robots. “Within two weeks after the retail product hit the market in 1998, adult hackers reverse-engineered the firmware and developed a number of additional software programs that could be used to program these robots,” she wrote on her blog. “And, a small industry emerged of sensors and peripherals that could be added to these robots. Lego encouraged the customer-extensions to the product line, giving hackers a license to extend its software and firmware and encouraging a healthy ecosystem.”
You don’t have to be a software company to involve your customers. Fidelity Investments maintains a site, FidelityLabs.com, where customers can try out services the company is considering, including a search engine tuned for financial content and a service that finds free checking accounts. Fidelity is being widely praised as an innovator for opening the corporate kimono it this way.
It takes guts to let customers hack your inventions, and the idea doesn’t sit well with every company. Toyota Prius customers have hacked the car’s software to drive fuel efficiency as high as 100 miles per gallon. They’ve also come up with ways to work around Toyota factory settings that, for example, disable the visual navigation system while the car is in motion.
Toyota has discouraged this practice and, given that the company’s products are made to move at 70 mph, you can understand their concern. Nevertheless, I’d be surprised if the company’s engineers haven’t learned a few things from the hacks applied by customers.
The culture of secrecy and propriety that has invaded corporate culture for many years is finally giving way to a new realization that companies don’t have a monopoly on innovative ideas. In fact, those innovations often come from customers themselves. This attitude is epitomized in the practices of Web 2.0 software companies, many of which openly encourage customers to enhance and extend their products. But as the examples of Lego, Fidelity and Karmaloop demonstrate, even mature businesses can find gold in customer innovation.
What do you think? How can your company deputize customers to help you develop new ideas? Contribute your ideas in the comments section below.