Saturday, July 7, 2012

Utilizing Lead Users in Innovation Process

The first step in the innovation process is for the marketer to generate intuition about consumers' needs and market opportunities. This intuition comes from sharing experience with consumers. The variety and number of ways to share experience with consumers is innumerable. So, this first step is often the most difficult for an organization to perform reliably.

An important source of inspiration for intuition into consumers' needs is lead users. Lead users have a high level of knowledge about brands and products, and lead users understand their own needs very well. So, creative lead users are able to invent a solution to their needs on their own by customizing a product or re-combining a product with some other products.

Lead users do not create innovation for a company. The innovation process is handled by the company itself. However, the company can utilize lead users effectively in the innovation process. Kohei Nishiyama of Elephant Design recently wrote in Japan's Marketing Researcher about some examples of consumer goods companies that have used lead users in their innovation process. I illustrate how these uses of lead users fit into the NeCSI innovation model.

As Assets in Need Stage

@cosme is the largest open forum site about cosmetics in Japanese. Users on the site discuss their experiences with different products and how they decide on the set of products to use. Activists at cosmetic companies use these comments on the @cosme site as Assets. Activists develop empathy with consumers through understanding these comments in order to develop their own insight into consumers' needs.

As Activists in Concept Stage

LEGO CUUSOO is a co-creation site where users post prototypes of new product concepts for LEGO. Other users on the site vote for the concepts that they like and also make comments about the concepts. In this sense, the users are acting as Activists to create a product concept. This type of co-creation tool also works as a way to generate Assets. The organization's own Activists use the comments as Assets by mining the comments for themes or specific ideas that they develop into insight about consumers' needs. In addition to the comments, the Activists also use a crowdsourcing technique to create Assets from other products images to which the users link.

As Activists in Implementing Stage

In the wake of Japan's 2011 tsunami that disrupted electric power supply, Tokyo Electric Power planned blackouts in the Tokyo area. TEPCO announced only the broad areas that would be affected by the scheduled blackouts. Individuals needed a way to search based on specific addresses in order make this information relevant for themselves. A consortium of volunteers – engineers, designers, and others – created and promoted an iphone app that would give blackout information for specific addresses. The consortium used an open source approach to developing the app, which allowed the app to be continuously improved. In this case, the volunteers acted as Activists in the Implementing stage to create a front-end service based on the various databases and platforms that were brought together in the Strategizing stage.

How well does your organization utilize lead users in your innovation process? Are you leveraging the relationship with lead users to strengthen multiple innovation factors? Are you utilizing lead users as innovation factors in multiple stages of your innovation process? Are there opportunities to develop “ba” (e.g., discussion forums, feedback mechanisms, etc.) where you interact with your lead users in more useful ways?

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