Over the past years, researchers have identified a new role that users can fulfil in the value creation process of firms. User-driven designs have proven to be strategically effective in many different industries. Examples are Apache (software), Quirky (household products), Muji (furniture) and Threadless (apparel). User-driven design can be defined by an innovative approach in which organizations encourage their user communities in generating ideas for innovative products. In this way the users take the lead in the design process by submitting ideas based on their wishes and needs. This is an easy and effective way for the company to involve users and might be more successful since, the real time needs of the consumers are taken into account.

The article by Dahl, Fuchs and Schreier (2014) focuses on the impact of this innovative strategy on non-participating, observing users. The study has found that the implications of this effect can differ. Therefore the authors tried to investigate why and when consumers actually prefer products of user-driven firms in order to provide more insight for user-driven markets.

Three experimental studies conducted in this research have resulted in interesting findings. First of all, non-participating, observing consumers tend to buy user-generated products rather than products from designer-driven firms. This preference can be explained by social identification. The fact that consumers are also users and their social identities tend to connect to the user-designers. They feel empowered in the process of being involved in generating designs.

Secondly, after further investigation the authors came to find that the social identification account can predict when the aforementioned effect does not materialize. For instance, it appears that when consumers feel dissimilar to participating users, the effect diminishes. The study has proven that consumers feel dissimilar based on significant demographics (i.e. gender) or when they feel that they do not belong to the social group of participating users (i.e. non-experts). Another case in which the aforementioned effect diminishes is if the user-driven firm decides to be selective in participation. Meaning, the firm does not allow every user to participate in the idea generation process, but just a selective group of users. This can lead to a feeling of isolation or social exclusion for observing consumers.

What I find striking in this research is the fact that observing, non-participating users do prefer user-generated products, while they were never involved in the process. I would understand such an effect if the consumer participated in the process. However, in this case the product designed by the firm itself could be way better since the wishes of the observing consumer were not taken into account at all. Meaning, because the observing consumers know that the products are user-generated they would rather buy that product, because of social identification. During the research they were informed about the production situation and I think they would therefore go for the ideal situation based on social identification. Therefore I cannot help but wonder, would the findings still be the same if the consumer did not know if the product was from a user-driven firm or designer-driven firm?

Source: Dahl, D. W., Fuchs, C., & Schreier, M. (2014). Why and When Consumers Prefer Products of User-Driven Firms: A Social Identification Account.Management Science.