Chapter 6

Drive New Product Development and Innovation

Most companies rely on new product development and innovation to generate revenue growth. Yet it's a constant challenge to develop successful offerings. Failure is an all too likely option for companies of all sizes; in fact, over half of new products that are brought to market fail or underperform. The number-one reason? Marketers neglect to understand the customer (Janowski 2008).

Companies that have turned to social media listening for innovation and new product work find that it has opened their eyes in important ways. It allows them to gauge market interest; hear suggestions for potential product features; and fine-tune concepts, products, marketing, and advertising.

Winning Plays for Innovation and New Product Development

The cases we review in this chapter span efforts in industries ranging from automobile design to foods to Web site editorial content. From these, we've distilled six winning plays:

• Gauge potential market interest in new product concepts by searching publicly available social media profiles. These can be exceptionally rich sources for basic market reconnaissance. They take little time and can provide valuable early guidance. Successful new product Bacon Salt got its start when two entrepreneurs tested a hunch by searching for, and contacting, people who wrote “I love bacon” in their social media site profiles (see “Search Social Media Profiles,” later in the chapter). Profile analysis is suitable for companies of any size, and it readily identifies potential markets.
• Listen-engage-listen-engage. Repeat as necessary. Iterate through cycles of listening and engaging during product development and innovation. Companies that receive ideas, reflect upon them, return them to the community, then “rinse and repeat” are more likely to provide a truly customer-centric product or service. Update your community on the status of ideas while the cycle is underway; transparency and timeliness are key. For example, MyStarbucksIdea.com and the Fiat MIO (described below) put tallies of the status of these ideas smack on the home page, which promoted a sense of connection and co-ownership. Establish criteria that measure the value of ideas submitted. Use voting or community rating systems to evaluate their merits and promote competition among ideas; and make sure that you have an objective system that conveys integrity in the process.
• Carve out an explicit role for listening in your new product identification or development process. Companies that utilize social media listening successfully articulate and follow a series of steps for collecting and using related data. One example of this is vitaminwater's “flavor creator” project, which asked the product's Facebook fans to co-create a new drink. Their effort started with defining the flavor, then determining the functional benefits of the drink. It concluded with naming and label design. Similarly, Fiat MIO first collected features and design suggestions, then branding and marketing ideas, and last, solicited feedback on the prototype. Frameworks like these help the company and its customers establish expectations and stay in sync throughout the product development or innovation process. Both cases are discussed in the “Co-Create New Products” section later in the chapter.

  Companies that use frameworks have a leg up, because frameworks provide a context for collecting, interpreting, and acting on insights. Companies without a formal or systematic process often struggle to handle and make sense of a hodgepodge of insights, which are hard, if not impossible, to act upon confidently and to gain and select business advantage.

  Although a primary reason for social media listening is to identify attributes or features for product development, discoveries may apply to other areas, such as targeting. Fiat MIO, for example, discovered that its most passionate advocates are located in cities, not in the rural areas as originally thought.

• Co-create products and services that your customers and prospects desire by utilizing social media listening to support the process. Recognize that many great ideas for new products or innovations reside outside the company. A number of organizations, such as MyStarbucksIdea.com, Fiat MIO, and vitaminwater, have undertaken co-creation projects. Keep these collaborative projects on track by adhering to an explicit process and being transparent, as just discussed.
• Fine-tune new product features before you release them by listening to your brand's most committed customers. Use panels or communities to test concepts that you are strongly considering bringing to market, as well as to garner suggestions and implementation ideas. Take advantage of conversation listening along with surveys and moderated discussions. Prior to launching its recipe-sharing site MixingBowl.com, publishing powerhouse Meredith turned to its private Real Women Talking community for feedback on content and design, and feelings about advertising sponsorship. Thanks to their help, Meredith launched MixingBowl.com and secured the revenue it needed (more on this in the “Fine-Tune New Products, Services, or Features” section later in the chapter).
• Apply insights from new product development to in-market products and services. Look across your product lines to see if you can transfer learning from new product development. Fiat MIO had a better idea of consumers’ interests through the features, marketing, branding, and prototype reactions it elicited. The company planned to leverage those for marketing and advertising its current lineup. Repurpose findings and insights from one social media initiative and apply them to others; doing so will increase the return on investment and create further value for the enterprise.

The cases we review in this chapter used social media listening tactically to:

• Search social media profiles to identify consumer interest in a new product.
• Uncover mind-sets and locate unmet or undermet needs.
• Co-create, design, build, and market new products.
• Fine-tune new products, services, or features.

New product tactics that use social media are nearly identical to those used traditionally; the key difference is in the data. Let's turn to our first case: a product called Bacon Salt whose origin shows how searching social media profiles can quickly and easily suggest market opportunity for a newcomer.

Search Social Media Profiles to Gauge Market Interest

Two bacon-loving friends, Justin Esch and Dave Lefkow, joked one day about how awesome it would be if there were a bacon-flavored seasoning. From this conversation, they hatched a brilliant business idea.

Most of us have taken part in similar conversations. We've concocted all sorts of services, solutions, foods, or infomercial fantasies around the dinner table or barbecue. But there's a big gap between thinking that your idea is a slam dunk and hearing from the market that it is—or, more likely, it isn't. Everyone involved in new product generation needs to test their ideas to see if they resonate beyond their inner circles to potential markets. Because research requires a substantial amount of time and money, it is infrequently or incompletely conducted by small and midsized businesses.

Social networks, however, enable both garage-based entrepreneurs and large companies alike to conduct quick exploratory research that can yield some early guidance for testing ideas and concepts. Publicly available social network member profiles reveal information including the tastes, interests, ages, geographies, favorite brands, and favorite bands of millions upon millions of people—without even needing to ask. These are only a fraction of the attributes available to marketers and advertisers through searching, or “crawling,” social networks.

So Esch and Lefkow opted to take a research step. They searched social networks for fellow bacon aficionados and found more than 35,000 people mentioning “I love bacon” on MySpace alone (Qualman 2009). By capitalizing on social network tools, the two budding entrepreneurs reached out to these folks in order to gauge their interest in bacon-flavored salt. Their conversations ignited interest and created buzz, so much so that people placed advance orders even before they created the product and made it available.

Figure 6.1 Bacon Salt started by listening to social media, and retains its commitment to the process.

The company succeeded right out of the gate, in 2007, selling out of supplies during its first week in business. In 2008, profits reached $1 million, and sales today exceed 650,000 orders of this widely distributed product. The company is not a one-hit wonder, either; social media listening led it to release sandwich spread Baconnaise, as well as many new line extensions and new products, such as bacon popcorn, bacon ranch dressing, and even bacon-flavored envelopes. The two entrepreneurs’ commitments to social media listening and a social network presence remain strong, as evidenced on MySpace, Facebook, Twitter, and YouTube, and consider the many comments submitted that endorse the current lineup, share opinions on new products, or suggest new products, such as bacon-flavored yogurt. They understand the power of listening and engaging continuously through social media—the forum that helped bring their dream product to life.

Develop New Product Ideas from Mind-sets

Social media listening for understanding consumer mind-sets—how people put the world together and act in accordance with it—is valuable not just for giving insights into people's minds. It can also be an effective opportunity for generating new product ideas (see Chapter 4 for details on mind-sets).

One major food manufacturer capitalized on this very approach. It sought to develop new product ideas for women's food products by using social media listening research. Taking a rigorous approach to social media listening, it undertook the following progression of research steps, which are very similar to those outlined in Chapters 1 through 3:

Let's make this concrete by looking at one example: the “Me Time” topic within the energize need state. This mind-set focuses on restoring and renewing one's energy. The company developed a key strategic insight from its analysis: Women's energy isn't inexhaustible. It can go in a flash (“then it hit me”). Women's unmet need: Find foods that will give them a needed lift while they are aiming to refuel mentally and physically.

Figure 6.2 Strategic insights following from the need state analysis are linked to blogger-inspired innovations that become candidates for new product development.

Source: J.D. Power and Associates Web Intelligence. Used with permission.

Listening for inspiring new product ideas from blogs was important to the research as the company was looking to bring about worthwhile consumer-led ideas. Two promising opportunities emerged: One, a pick-me-up that lasts, especially in the form of healthy, convenient snacks that will help women feel “invincible” and pass on the less nutritious food they aimed to avoid. The other, a “just right”-sized chocolate dose that could be enjoyed with a cup of coffee or tea, or during a small indulgence like a manicure or pedicure.

Co-Create New Products: Design to Consumer-Generated Requirements

A longtime staple of consumer-friendly businesses, “suggestion boxes” brought the customer's voice inside companies, but often faintly. Some organizations, like grocery chain Stew Leonard's, still prominently feature an old-school one—a pen, paper, and slot—at exits. Today, advances in social media have transformed that simple solution into fully blown idea and innovation factories. MyStarbucksIdea.com—one of the earliest, most popular, and highly regarded of these initiatives—allows enthusiasts to share, discuss, and vote on ideas. Transparency is key here; site visitors are able to see popular ideas under consideration and those that have already been put into action right on the home page. By late 2010, the MyStarbucksIdea.com Web site had received nearly 100,000 ideas regarding products, the Starbucks experience, and the company's involvement in local communities and its social responsibility.

Because companies now recognize that ideas, suggestions, and solutions exist in great numbers outside their office walls, their interest in co-creating products and services has vastly increased. The following two case studies—that of the Fiat MIO Concept Car and a recently launched vitaminwater flavor called Connect—highlight these organizations’ willingness to “think outside the (suggestion) box.” Take note of the rigor each company applied to its co-creation effort. The efforts are very tightly managed, pass through a set of progressive stages, and cycle repeatedly between listening and engaging in order to gauge consumer input and refine product development.

Fiat MIO

Car companies routinely develop “want lists” from their customers. Often cultivated through surveys, focus groups, or customer panels, such lists result in some product improvement and new ideas—for example, cup holders, in-car entertainment systems, and configurable seating. However, it's fairly unusual for automobile companies to collaborate with an open community of people to co-design a major advance, such as a concept car, that will be displayed and whose ideas may eventually go into production. Yet this is exactly what Fiat did with the MIO.

This project (which concluded in October 2010 with the unveiling of the co-created MIO prototype) focused on discovering ideas that made a car personal. Whether or not the car makes it into production, Fiat has learned and developed expertise in leveraging social media tools and research techniques. These advantages will help it create, market, and advertise products grounded in the deep understanding of the elements that its customers and prospects desire and request.

The MIO project is Fiat's third initiative to attempt to include customers in its thinking and direction as a company. This passage from the MIO Web site reflects that commitment (AgenciaClick 2010):

We must think of the future in a collective and participative form. Fiat therefore assumes the commitment to continue the Fiat MIO project, converting your ideas into reality. They may be simple or complex; it doesn't matter. Everyone has an idea of how the future should be, or what to do to make it better. It is therefore essential that you participate in this more than democratic forum. Let's combine your ideas with our capacity to produce them. We wish to create a new project with you, a new car, a new form of transport for the next generations.

Fiat runs the program out of the Brazilian agency AgenciaClick, which created a Web site (with translation tools) and presence on Twitter and other social networks (see Figure 6.3). Why Brazil? For one thing, it's a digitally savvy country. For another, Fiat is the country's largest carmaker, with roughly 25 percent of the market, and its fifth-largest advertiser. Last, Fiat planned to unveil the prototype car at the International Automobile Fair in Sao Paolo in 2010.

Figure 6.3 The Fiat MIO Web site invites people to create “a car to call your own.” Translation tools make the site multilingual and invite contributions from all over the globe.

Although the use of social media alone does not guarantee that companies will reach large, interested audiences, stories about this innovative project, in both traditional and digital media, amplified project news, created awareness, spawned word of mouth, and spurred participation. Advertising Age magazine reported that “…in the two weeks starting August 3, 2009, the Fiat Mio site had 67,000 unique visitors who submitted 1,700 ideas, and more than 40,000 comments were posted on Twitter” (Wentz 2009). Four months later, the site had about 10,000 registered users in more than 40 countries who submitted more than 7,000 ideas, comments, and suggestions in seven categories: general, safety, design, propulsion, ergonomics, materials, and infotainment (AgenciaClick 2010). Contributors wrote or shared pictures and videos, and voting by site visitors allowed MIO to gauge the popularity and appeal of the different suggestions. One important component was that the ideas didn't have to be new. Some people uploaded information from competing brands about the various features they desired. But whatever their source of inspiration, people clearly wanted to be a part of the process and have Fiat listen to their voices.

Along with encouraging conversation and comments, MIO conducted its social media listening program in a progressively staged manner that moved from:

These three stages provided a coherent framework for the co-creation effort, which allowed Fiat and its community to understand expectations and proceed in sync with the concept car's development needs. What makes Fiat's method especially notable is its virtuous cycling of listening and engagement into a feedback loop over time, as well as the depth of the company's commitment. It was not a casual checklist type of effort.

Apart from learning about the attributes of the car that the community desired—which included comfort, safety, and “green-ness” and being connected for communication, navigation, and media access—Fiat also uncovered insights into potential customers’ mind-sets and motivations. It learned that people who lived in big cities craved the car the most because they were looking for a meaningful solution to the pollution, noise, and traffic jams that they frequently encountered.

This co-creation effort allowed Fiat to gain valuable insight into the kind of car its customers desired. It gave the company an important sense of direction that it could apply to marketing and advertising its current lineup. Fiat marketers will know which available features are most attractive, which they can then emphasize broadly or narrowly. For a global company like Fiat, understanding the geography of interest in features, for example, can help localize and tailor cars to each market, while messaging and creative can be tuned to match the motivations, aspirations, and benefits expressed by a customer community. By tightening the match between offering and customer, Fiat increases its chances for success.

Vitaminwater Connect

Nutriceutical beverage line vitaminwater (now owned by Coca-Cola) wanted to connect more deeply with its younger consumers. Putting “the consumer in control,” quite literally, vitaminwater turned to its Facebook fans to create a new flavor, select its benefits, and design its label, a move the company hoped would ultimately instill a sense of brand ownership. Its objective was summarized in the words of Jason Harty, the vitaminwater manager in charge at the time: “Vitaminwater was our idea. The next one will be yours” (Harty 2010a, Kincaid 2010).

The company developed a “flavor creator” tool that simulated its lab environment, and carefully structured its program by combining solicited choices from fans with social media listening. Here are the steps it followed:

It is important to note that vitaminwater's flavor creator Web site provided a variety of social networking features, such as discussion areas, sharing, and fanning. By doing so, the brand helped ensure that the contest truly engaged the fan community, and was not a gimmick like a simple sweepstakes contest.

Connect launched in March 2010. Coke's Stan Sthanunathan (2010) explained the benefits: “A process that normally takes two years and millions of dollars of investment in formal market research and trials was turned on its head and conducted in three months for a few thousand dollars by harnessing the power of the crowd to co-create a new product.”

Fine-Tune New Products, Services, or Features

The cases discussed so far concern developing new product concepts (Bacon Salt) or co-creating prototypes and actual products (Fiat MIO, vitaminwater). We'll now look into how social media listening is used to help companies fine-tune ideas they already have under consideration or that are in early stages of development.

Diversified media powerhouse Meredith Corporation publishes magazines and owns broadcast outlets and a number of digital properties. The company's goals are to ensure that its properties are relevant, that its audiences are high-quality, and that the combination is attractive to advertisers.

Meredith publication Better Homes & Gardens (BHG) decided to augment its print presence with a social network it called the MixingBowl.com (see Figure 6.4). Its team had some fairly well-established ideas about content and design, but wanted to test them out in real digital time.

Figure 6.4 Meredith's MixingBowl.com social networking site features, design, and editorial/advertising approach were guided by the company's private online community Real Women Talking.

Meredith Research Solutions runs a private Communispace community called Real Women Talking to engage with and partake in social media listening with its target female audience. Communispace prepared a concept test and then asked for reactions on overall feel, uniqueness, and participants’ likelihood of using the new site. Community members endorsed the approach. While that was good news, the BHG/Communispace team had to be confident; very important decisions were on the line. They absolutely needed to know: “Will social media listening guide us, or is it just confirmatory?”

Editorially, Meredith heard that members wanted fresh material. So the team developed a plan to update content weekly, just the kind of decision that might have been made using traditional methods.

The real value for Meredith came when the team analyzed conversations and activities regarding content direction and advertising. Women wanted to see food within the context of occasions—entertaining, family meals, or shopping—not in isolation from their daily lives. Additionally, they wanted to do more than just read recipes. They said they wanted to trade and exchange ideas with other members of the community so that they could benefit from each other's input, and by so doing, add to their lives.

Meredith discovered through social media listening that it already had the features and services for an appealing site. To generate revenue, however, it needed to sell sponsorships, and that required another set of deliberations: What was the right mix of editorial and sponsorship? Would too much advertising be a turnoff? Again using social media listening, Meredith learned that women would be receptive to editorial supplied by well-known and well-liked brands. With that insight, the MixingBowl.com team created a “back-of-the-box” recipe section—what it called “an engaging resource that simultaneously enhanced consumers’ experiences of client's brands.”

With community comments in hand, Meredith's ad sales team was primed and able to demonstrate MixingBowl.com's value to potential advertisers. The company's ability to tap into this real-time market knowledge “has been a key point of difference that builds relationships with advertisers, and drives innovation” (Ware and Austin, 2008). Meredith, in fact, also has used Real Women Talking in conjunction with advertisers, to generate insights for special opportunities and programs.

Powered by Ripple6, a social business platform, MixingBowl.com also began offering a full set of social networking features—including groups, profiles, forums, sharing, and updates—that provided Meredith with additional social media listening posts, which it now mines for insights and ideas for content and features.

Summary

Social media listening is a data source for developing new products, supporting ideas, testing concepts, co-creating, and refining new products prior to launch. The most important step is to define a process and clear role for social media listening, one that includes ongoing engagement with a community. Put voting or rating systems in place to provide objective measures of popularity, and assign priority for development. Always remain transparent, in order to instill a sense of participation, co-ownership, and trust between customers and companies.