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Issue Report

Collection of full-length papers and in-depth analysis of economic and management issues.

Creative Consumers: New Partners 
for Management Innovation

Creative Consumers: New Partners for Management Innovation

LEE Min-Hoon

Oct. 31, 2012

Download Creative Consumers: New Partners 
for Management Innovation PDF email Print

Originally released on September 12

As consumers gain access to information through more and more channels, companies are putting increased priority on listening to their opinions as a basic corporate activity. Developments in network IT have enabled consumers to build their expertise and information-gathering abilities to near expert levels, setting the stage for active customer participation in management. This takes place in the form of consumer "idea initiators (development)," "beta testers (production)" and "big-mouth/mystery shoppers (marketing)." The new class of "creative consumers" acts as co-creators with businesses. These creative consumers are not the anonymous consumers of the past, but a select few customers who act as leaders rather than helpers of their community, and participate continuously in the process of product development. Utilizing creative consumers extends the concept of "prosumers" (i.e. customers who have expert knowledge about specific products) to include them at every stage of a product's life cycle.

Leveraging the powers of creative consumers can provide advantages in both production costs and product differentiation, especially in a period of low growth. In an environment where cost competitiveness is becoming all important, spontaneous cooperation from consumers can realize significant savings. Since consumer distrust in marketing tends to rise during an economic downturn, companies can increase the impact of their marketing at low cost by targeting resources primarily to company-friendly creative customers. They can also gain competitive advantage by spotting hidden customer needs and providing tailored product launches. Another benefit of working with creative consumers is the enhancement of community solidarity and cohesion, as such consumers are a natural bridge between companies and the mass market.

To attain successful cooperation, companies will have to elicit active participation and engagement from both inside and outside their organization through a five-stage ("5R") cooperation process. The first "Recruiting" stage involves selecting a limited number of partners based on their willingness and capability, rather than their demographics. The second stage is "R&R," where the focus is on increasing customer engagement by clarifying specific ideas, project assignments and activity durations. In the third "Reinforcement" stage, the main task is to stimulate interaction by providing mid-level infrastructure, including online toolkits like simulation programs and graphic tools, as well as customized guides that help customers avoid unnecessary trial and error. The fourth stage, "Realization," involves setting up principles for communication and execution of customer ideas as is, and conveying them to top management. Finally, in the fifth "Retention" stage, companies must keep creative customers en gaged by increasing the feelings of accomplishment they derive from their contributions.

The 5R process can also minimize risks associated with customer cooperation. To this end, companies should take various scenarios into account and anticipate risks like doubt regarding the effectiveness of customer cooperation, internal resistance and information leaks, and conflicts with customers. Companies with little experience in cooperating with customers can accumulate know-how by starting with small projects first. Throughout the process, companies need to clearly articulate rules and provide organizational support, as customer cooperation requires effort across the whole organization, and not just in the marketing and R&D departments.

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