Five years ago, when consumer co-creation was not yet the hot topic it is today, Smart launched a very successful co-creation contest. Do you still remember Smart? The little city-cars, which eventually were not the success that the company had hoped for. In 2010 they launched a co-creation contest in which consumers could participate and make a design for the Smart car. They did not only engage their consumers in making the best design, but also engaged their consumers in a little game so they could help decide which design was the best. This approach of gamification did not only help Smart to engage more customers in this co-creation process, but also led to high quality designs and have strengthen the bond between consumers and the brand Smart.
For companies co-creation has a lot of advantages. Consumers create value for companies and products. Consumers express their needs, they help the company with (creative) ideas and companies can engage their consumers in deciding which product to launch next. In February 2010, Smart launched the co-creation contest in which consumers could upload their design for the Smart car. The winner could win a monetary reward of $5000. They made an internet platform with a design tool so that even consumers with no experience in designing cars could participate. Besides that, they directly involved customers with the platform by allowing participants to comment on designs and rate different designs. In only a few months, 10.000 members uploaded 50.000 designs to the website. There were 600.000 design evaluations and 27.000 comments.
Smart did not only engage their consumers in designing the Smart, but they also thought: Why not let our consumers choose which design they like the most? Unfortunately, these decision-making processes are often perceived as boring by the public. Therefore Smart decided to gamify this contest. Gamification is a way to make things like an idea generating contest more appealing for the public. Games are often perceived as fun so they are a good way to get more engagement from consumers.
After the expert jury filtered out most of the designs, Smart opened the Matching game. If a participant entered the matching game he/she was connected to a different participant. When the game started they were both shown a few designs. The players were then asked to click on the design of which they thought that their co-player would consider it as the best design. If they both choose the same design, they had a Match and they received points. Despite the fact that Smart never promised any reward for the amount of points a player received, in total 2000 games have been played. This led to the following winning design:
If we look at the statistics we can conclude that Smart launched a very successful co-creation contest which had a monetary reward of only $5000. Is the only trick they used to include gamification of the process? Or do you think that gamification is absolutely not a guarantee for succes?
Have you also wondered for years how to make a wooden paddleball set, or how to make a rock salt bracelet, but you never found the proper motivation to figure this out? Due to the online trend in customer co-creation it is now possible to find instructions for the most bizarre items online on Instructables.com
One of the leading sites in these ‘how-to’ videos & instructions is Instructables.com. Instructables.com is a website which was originally an inside project from some PhD students from the MIT media labs. When they weren’t solving complex technological problems like solar panels for highways, they were teaching each other things as 3d modelling, cooking and other stuff through videos and instructions that they posted on this platform. In 2006 they decided to open up the platform to the rest of the world. The website now is a platform for over hundred thousand how-to instructions, videos and ideas.
That these ideas are very varied is already noticeable in the first moment you enter the website. There is a bike challenge available in which people can post their idea about bikes. These ideas vary from homemade bicycle stand to homemade tandems. The great part of this platform is that it is not only a platform for simple guides like sharing a salad recipe or showing how to sheer a sheep, but it is only a place where creative people meet each other, share ideas and create.
Behind the website is a small team and a huge community of enthusiast people who are constantly sharing their most creative ideas. They can add videos, images and even files with 3d models or photoshop images. An extended review system is available on Instructables.com to rate other users and their ideas.. Besides this it is possible to join groups for people with similar interests. Instructables.com also has a membership available for teachers so they can use these videos in the classroom.
The business model of Instructables.com consists of 2 different revenue-models. The first is based on advertisement. They rent out video space on the video pages to companies for advertising purposes. The other source of revenue they have is organizing contests for their community. Some of these contests are sponsored by companies. At this moment Microsoft is organizing the “Coded creation contest” on Instructables.com. Big prizes like laptops, tablets and photo cameras are waiting for the winners!
Besides Instructables.com there are literally dozens of these websites that are specialized as video platform for how-to and do-it-yourself videos. Although Instructables.com is not the largest website in this category, they have an advantage with having a large community. So if you feel creative these coming months and have a video camera and some spare time, make sure to visit instructables.com!
A trend in the e-commerce business is web-shops giving personalized recommendations to their customers based on past purchasing behaviour or browsing history. Research shows that personalized recommendations can affect online sales with a 12% in average order value for personalized transaction.
A major concern of consumers related to personalized recommendations are the privacy concerns that people have with companies using their private date. The privacy-personalization paradox occurs: People resent that their personal information is used by companies to personalize their services, but also would like to benefit from this personalization. The privacy calculus theory suggests that people will make a calculation in their head if the loss of privacy they perceive will result in more benefits of personalization.
The paper I will discuss today is written by Ting Li and Till Unger in 2012 and explored the relationships between personalization quality and privacy concerns through the privacy calculus theory. They conduct an experiment in combination with a survey in which they show people 8 different scenarios. The scenarios were webpages with different dimensions manipulated. They have chosen for a 2x2x2 between-subject design and manipulated three dimensions namely: privacy, quality of personalization and industry domain.
The findings of this research are very interesting. The authors found that a customer’s intention to use online personalization is negatively influenced by the degree of her privacy concerns. Prior research has argued that privacy concerns play a crucial role in customers’ online purchasing behaviour. The results of their experiment support this hypothesis. They found that the familiarity with online personalization reduces this negative effect of privacy concerns on the intention to use the personalization system.
Also the quality of a recommendation system is researched in this paper. This is the first research on recommendation agents that take quality as a variable. The quality of a recommendation agent seems to be an important factor in the likelihood of using online personalization. When consumers perceive the quality of the recommendation agent as high they are more likely to use the personalized recommendation agent. They also found that higher personalization quality could overcome customers’ privacy concerns.
This research is very important for e-commerce companies. For managers of these companies the information privacy concerns that consumers have are important to notice. Personalization systems that have high quality are very beneficial for their company. They need to build an e-commerce site that creates trust and addresses the information privacy concerns of users. This research shows that using privacy signs can ease the privacy concerns of users. This research also suggests that it is important that a site already established a good relationship with their users before implementing personalization services.