Why do customers participate voluntary?

April 30, 2015 fbevelander Leave a comment

Nowadays, firms are willing to involve other people in their product development and product support activities instead of their own employees. It is obvious that companies will have benefit from this work. But why would customers help those businesses? In this article, we will first focus on the virtual customer environment research. Because of upcoming technologies is it possible that customers can help firms by giving their opinion. Customers are interfering with product ideas, product design, product testing and product support activities.

Research shows that when the quantity of product-related content will be high, the customer beliefs that the participation to this virtual customer environment will result in higher learning benefits, social integrative benefits, personal integrative benefits and hedonic benefits. The learning benefit has to do with the understanding and with the knowledge of products. The social integrative benefits are related to the participating customers and potential members. There will be created a relationship between those customers. The personal integrative benefits are defined by the status or reputation. The last element, hedonic benefits, is related to the interaction of the customer. The research also shows that the customer is more willing to participate when he/she finds that there is a stable member identity and that those members are highly active on this community.

Thus, the company must give the impression that the product-related content in this virtual community is very high. Therefore the customer is more willing to participate, because he or she thinks it will be rewarded with intangible benefits. There also must be visible that there are a lot of members and that those members are active users.

This research is applicable on online support forums. But a lot of companies can have advantage of this information. They can apply this on their own business idea, in combination with there website, already existing or make a new website. But also in stores can this be applied. When customers are more willing to participate when there are many more participants, you can easily give them access to the other opinions. Stores can have a real life competition or co-creation development. But they can also do this by filling in their recommendations in the store, for example on a survey. Companies can also ask the opinions of the customers in stores themselves. Imagine a clothing store, when the salesmen can directly ask what the customers likes and dislikes in store, he can send those feedback to the headquarter. But there can also be, for example a display in store, where the votes on several outfits or clothes are visible. This will lead to further co-creation of the customer and the company will have benefit as well as the customer!

Baron, R., Nambisan, S. (2009).Virtual Customer Environments: Testing a Model of Voluntary Participation in Value Co-creation Activities. The Journal of Product Innovation Management

Articles, Mini Cases

Dutch ‘Polderen’ as the Foundation of Co-Creation – Example of the Dutch Energy Agreement for Sustainable Growth

April 30, 2015 rsmstudent Leave a comment

What about co-creation being a Dutch invention? Already for decades, complicated issues in the Netherlands are being solved in a process in which politics, employers, and labor unions are collaboraitng. This process is in Dutch also known as ‘polderen’. Unfortunately, there is not proper translation for that, but there is a definition available: “‘polderen’ is to seek a compromise (particularly but not necessarily, within a political context) in order to come to an agreement”. Polderen is a typical Dutch concensusmodel. This ‘polder-model’ is deeply embedded in the Dutch society. The fact that this concensus-approach is so typical for the Netherlands, helped the fast integration of co-creation in that country. But what differentiates this ‘polderen 2.0’? Let us discuss this based on a typical Dutch example.

The Dutch Energy Agreement for Sustainable Growth is a good example of co-creation in which the initiative wasn’t provided by the government, but by society. Recently, 40 organisations from economy, industry, labor unions, politics, and environmental parties signed an agreement about the use of energy in the Netherlands. Until then, there was a lot of dissatisfaction within society about the ongoing energy policy; it was not ambitious enough and was very often subject to change. With the guidance of the Sociaal Economische Raad (Social Economic Counsil; SER) and Nederland Krijgt Nieuwe Energie (New Energy for the Netherlands; NKNE) foundation there were active discussions and negotiations between all different parties.

Critics thought this again was the traditional ‘polderen’. However, there were some clear distinctions this time. First of all, there were many more parties involved in this process, second the initiative was not political, thirdly it was highly transparent, and finally the process was much more complex than previous ‘polder’ issues.

In the beginning of this blogpost I mentioned the term ‘Polderen 2.0’. This term seems to be correct. A ‘polder-model’ means that every stakeholder brings up his own concerns and try to get to the best outcome through intense negotiation. However, in co-creation there is an overall goal, exceeding all individual concerns. The collective group of parties, or the society has a certain concern for its own. ‘Polderen’ means that all parties agree on an outcome with which all indidvidual parties agree based on their own concerns and goals. In a co-creation process, all actors act not only based on their own perspective, concerns and needs, but also in favor of the collective interest.

In many parts of the creation of the Dutch Energy Agreement for Sustainable Growth, there really was co-creation instead of the traditional ‘polderen’. This example shows that co-creation can also exist in society, politics and industry. Co-creation goes far beyond the current digital landscape and is always based on several parties. The Dutch showed that co-creation can also be based on a consensus-based discussion, and can be used to achieve a higher goal. So thanks to the Dutch for creating ‘polderen 2.0’, also known as the foundation of co-creation.

Sources:
http://www.energieakkoord.nl
http://www.nederlandkrijgtnieuweenergie.nl
De Herontdekking van de Polder in De Groene Amsterdammer, 23/10/2013
http://en.bab.la/dictionary/dutch-english/polderen

Articles

Word-of-mouth: oral versus written

April 30, 2015 344068lb 2 Comments

Word-of-mouth has always been important. It has a crucial impact on customer behaviour. If someone recommends a certain product, it is more likely (more than 50%) that in the end this person purchases the product. Currently, it becomes even more interesting because the digital era makes it easier to communicate with each other. Nowadays there are more different channels you can use to spread the word easy and fast. Different channels of communication will influence the potential customer. But is there a difference between oral and written communication? Does the way of communicating affect a certain message? And could this be an opportunity for a company?

For me there is a difference in a way that written communication feels more anonymous. This is why I first thought that this would cause low-content and less interesting messages since people feel less responsible for their own messages. However, if I think a bit further I do think that in written communication someone feels also less social pressure to answer right away, which means that they have more time to think about their message. This could result in more refined, complex and interesting messages. At the same time written communication can feel more permanent (you cannot remove it easily) and the writer can be worried about the receivers’ expectations: e.g. my audience is expecting the world from me, now I have to live up to that by writing something really valuable. This is related to your online reputation.

Berger and Iyengar (2013) were curious and therefore did some research about the difference between oral and written communication and how this affects the content of the message. The results show that if there is more time to construct and refine a message (i.e. asynchrony), people will indeed talk about more interesting products and brands. Also a higher level of self-enhancement will support this effect. When there is enough time to construct and refine a message, people with a higher level of self-enhancement will take the opportunity to use this time to choose interesting products and brands to talk about.

Knowing the fact that asynchrony improves the interestingness of the message, written communication scores higher than oral communication. If someone asks you to tell something about a certain topic, you will feel the pressure to answer within a few seconds. You probably feel less confident about the topic and would tell more straightforward, less interesting and more accessible things. However, if someone asks you to write it down, the first thing that you probably think is: how shall I formulate this? What would be the most appropriate way? etc. There are immediately multiple things to think about before you are actually writing something down. You will give yourself more time to construct the message. This supports the research, which shows that in written communication interesting products and brand are mentioned more often.

But how could companies benefit from these findings? Companies want customers to talk about their interesting products and, as we have seen, written communication is an appropriate way to do so. At the same time there is an upcoming trend of digital communication: the impact of digital word-of-mouth is powerful because of reasons such as speed and its one-to-many nature. This means that companies should respond to this trend by investing in written communication platforms and a strategy for digital word-of-mouth.
People obviously prefer to talk about interesting brands. So in addition to supporting written communication platforms, companies should also give customers a reason to talk, evoke interest and surprise people by engaging, equipping and empowering customers. Like NikeSupport is doing with responding on conversations on websites (engage). These three E’s are important for building up a digital strategy and to make sure that customers are evaluating the brand as a more interesting one. Companies should take these insights into account to spread the positive word of mouth.

References:
Berger, J., & Iyengar, R. (2013). Communication channels and word of mouth: How the medium shapes the message. Journal of consumer research, 40(3), 567-579.

http://www.forbes.com/sites/kimberlywhitler/2014/07/17/why-word-of-mouth-marketing-is-the-most-important-social-media/

http://www.socialemailmarketing.eu/2010/05/wordofmouth-in-the-digital-age-introducing-wordofmouth-equity/

http://www.dotrising.com/2015/01/16/how-important-is-word-of-mouth-in-the-digital-age-infographic/