Tag Archives: consumer

Reviews & Ratings: Consumer online-posting behavior


“Unfiltered feedback from customers is a positive even when it’s negative. A bad or so-so online review can actually help you because it gives customers certainty that the opinion is unbiased.” 

– Source: Gail Goodman, Entrepreneur, 2011

Social media delivers an ultimate platform for customers to broadcast their personal opinions regarding purchased products and services and therefore accelerate word-of-mouth (WOM) or consumer reviews to travel fast. Nearly 63% of consumers are more prone to buy products on a website that has online consumer reviews (iPerceptions, 2011). Online consumers reviews are trusted 12 times more, in comparison with descriptions of the product stated by the manufacturers themselves (eMarketer, February 2010). Companies who provide space for reviews on their websites, have an increase in company sales of nearly 18% (Reevoo). This video below defines how customers can assess online consumer reviews and recommendations while researching and shopping online.

Youtube: “Online Reviews and Recommendations”

Chen et. Al (2011) examined the interactions amongst consumer posting behavior and marketing variables such as product price and quality. An important part of the research was about how such interactions progress as the Internet and consumer review websites draw widespread approval where people use it more often. The study’s new automobile models data comprised of two samples that were gathered from 2001 and from 2008. As an automobile involves thorough searching before making a significant financial decision, these years were seen appropriate. Also more consumers made use of the Internet between 2001 and 2008 when considering purchasing an automobile. A total of 54% of new-automobile consumers made use of the Internet in when buying a car in 2001, reported by Morton, Zettelmeyer and Silva-Risso. According to a report by eMarketer, in 2008 this percentage was increased to nearly 80%. This study included prominent automobile review websites that covered the distinctive sections of the market— leading car enthusiasts (experts) as well as amateur consumers.

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Motivations for Posting Online Consumer Reviews.

Gaining social approval – self-approval – indicating a level of expertise or social ranking – by demonstrating their superb purchase decisions, are all psychological reasons why consumers post online reviews. It can also be used to state satisfaction or dissatisfaction. Diverse types of customers are driven by distinctive motivations for posting reviews online. The earlier group of Internet users (in the study – year 2001) differs from the second group of Internet users (year 2008) when it comes to the reasoning as to why they post online. The consumers categorized as early group of users (a.k.a. experts – early adaptors of innovation) have high levels of product expertise, making them more likely to be psychologically seeking status and engaging in noticeable consumption. They are seeking to representing know-how and social ranking is particularly significant in the Internet’s early years (2001), as they tend to have high incomes and are more so price insensitive.

Conversely, the Internet has advanced and developed over this period, and it has appealed to a bigger population of types of consumers. Where, in 2001 it used to be a select group of Internet users who would post reviews, the Internet usage and online consumer review sites of today have become more mainstream. The Late adopters (2008) cultivate to be more no-nonsense and price focused compared to early adopters.

Marketing variables – effect on consumer online-posting behavior

Marketing variables indeed have an influence on consumer online-posting behavior. In the early stages of the Internet (2001) the price of products had negative relationship but premium- brand image has a positive relationship with the number of online consumer postings; differently, product quality has a U-shaped relationship with the number of online consumer postings. These different relationships are likely to be driven by early adopters of Internet usage.

The Internet infiltrates to mass consumers online, who are more inclined to be price sensitive as well as value driven.

Though certain marketing variables can lead to a big number of consumers engaging in online posting activities, these consumers do not automatically give higher ratings. The study shows that mass consumers lean towards posting online consumer reviews at higher as well as lower purchase price levels. In contrast to posting online consumer reviews primarily at lower price levels, which happened frequently during the early stages of Internet usage. The Internet has been accepted more by mass consumers online, where they express (dis)liking a product or service. This motivation of sharing reviews has become more important compared to sharing expertise of social status.

In conclusion, this research showed that the connections between marketing variables and consumer online-posting behavior are distinctive at the early phases compared to mature phases when it comes to Internet usage. High prices increase the overall consumer review ratings, which may be good news for a firm’s pricing decision. They found that the search for status is a core driver behind consumer-review behavior, predominantly in the early Internet stage. In market where it is difficult to assess quality, costly to assess quality, and where heterogeneous tastes are important factors when choosing a purchase, customers are occupied in all-encompassing decision-making. These conditions make it more likely for consumers to request external opinions online, before they make a decision on what they will be purchasing.

References:

Chen, Y., Fay, S., & Wang, Q. (2011). The role of marketing in social media: How online consumer reviews evolve. Journal of Interactive Marketing25(2), 85-94.

Charlton, G. (2012) “Ecommerce Consumer Reviews: Why You Need Them and How to Use Them.” Econsultancy.com

Featured image: http://splumber.com/wp-content/uploads/2014/12/Plumbing-Online-reviews-1030×574.jpg

Can we start drinking beers all day long?


To cover the inevitable expenses of the Dutch student life, I worked as a online marketeer at a large beer brewery for two years. My main task was to maintain and manage the online community of the firm, which consisted mainly out of people that followed the company social media accounts. Within this online community I pushed content in the form of company posts towards our community members, posts with which I tried people to convince a certain product was attractive, or posts telling our people that our new campaign was cool. But what I did was wrong. Instead of my strong content pushing focus, I should have engaged our community in engaging..

In the last decade, the term “engagement” has been extensively used in marketing literature. But while this term has become more popular, it never has been really been defined or differentiated from terms as “participation” and “involvement”. So when Roderick Brodie and his friends (2013) decided to write an article about virtual brand communities, they choose to focus on the consumer engagement in these communities. What really defines this customer engagement, and how could this customer engagement be created?

They started with the question how to theoretically define consumer engagements, since this was never really done, and came with the following comprehensive definition: “Consumer engagement is an interactive, experimental process, based on individuals engagement with specific objects (e.g. brands, organizations), and/or their community members.” After defining this consumer engagement, they start examining what was needed to create this consumer engagement in online brand communities. A netnography (Dhiraj, 2011) was done were 427 blog posts consisting out of 56.804 words were analyzed. Eventually, Brodie et al. (2013) came to the following practical conclusion: companies must start “engage in engaging”, they must form their brand communities in such a way that consumer interaction determines what is happening.

But how should this “engage in engaging” be implemented by an online marketeer, for example myself? Can we stop working and start drinking beers all day long? Unfortunately that is not the case. By implementing this “engage in engaging” principle, the role of the online marketeer changes, but it does not disappear. Instead of following the traditional marketeer role and hereby pushing content towards community members, online marketeers should be responsible for creating an environment that lets the community members create and share content. Interactions between these community members should form the community.

This is because according to Brodie et al. (2013), the modern consumer does not want “sales talk” from a company account, instead it wants “non-commercially” driven reviews and comments from peer consumers. This may sound like the online marketeer should lose the entire control of their online communities, but that should not have to be the case. In the end, it is mainly important that the consumers perceive the community to be “non-commercially” driven. This causes for a new challenge for the online marketeer: creating environments that are being perceived to be controlled by the consumer, but that in the end cover subjects that engage customers to buy products or services from a company. If this is hard? Yes it is, and if you are not convinced, take a look at this McDonalds example:

(YouTube, 2015)

Brodie, R., Ilic, A., Juric, B. and Hollebeek, L. (2013). Consumer engagement in a virtual brand community: An exploratory analysis. Journal of Business Research, 66(1), pp.105-114.

Dhiraj, H. (2011). Open Business Council. [online] Openbusinesscouncil.org. Available at: http://www.openbusinesscouncil.org/2011/11/what-is-netnography-the-effects-it-places-on-the-web-and-social-media-industry/ [Accessed 5 Apr. 2015].

YouTube, (2015). #McDStories RUIN LIVES!!. [online] Available at: https://www.youtube.com/watch?v=Z0hh3M-EanA [Accessed 5 Apr. 2015].

Moving Towards a Craft-Consumer: The Example of AudioDraft


It is a fact that firms are constantly looking for new ideas and content that fit their specific needs. Therefore, not only consumers respond to customized solutions offered by companies, but the opposite can happen as well. The evolution of crowdfunding has allowed the creation of suitable platforms that connect individuals with firms within new contexts.

AudioDraft is an interesting case of such a platform. It allows anyone that needs a specific music or sound to crowdsource it to talented composers or music designers around the globe. The best analogy for what the startup does is 99Designs for sound [1]. What is the core of this idea? “The logic is to make things simpler for everyone. Customers can always know beforehand what their music budget will be and the designers can more easily understand the payment amounts they are expecting from the service”, says Arto Tolonen, co-founder of AudioDraft [2].

The company was founded in 2010 and within the first three years managed to create a community of about 20,000 musicians and composers that offer their music talents to clients or firms. This pool is balanced out by approximately 1,000 customers [3]. Nokia is one of the biggest companies that have used it in order to create a sound to go with its new devices. Initially, the only way offered to connect artists with companies was through competitions initiated by the latter (Open Studio). The platform charged 99$ fee per competition, in addition to 10% of the prize money. However, later AudioDraft created an online unique music store, where participants could upload their music, while customers have to pay them anything from 400$ to 2000$ for a license of a certain track (A&R). The last option provided is full access to the musician talent pool along with a full music production toolkit for 999$ per month (Agency Studio).

audiodraft-status-long

Each of the above revenue models correspond to a different level of customization and expertise for the required music. And while 1,000 customers might not seem a massive number, the average commission musicians gain per track is 1,200$, with AudioDraft gaining 10% of it. “There are artists on the platform who are making enough money to pay for their living costs” states CEO Teemu Yli-Hollo [1]. As for the goal of this crowdsourcing music company?  “We want to give artists other means to create and find distribution for their music than the old record label way, and to make crowd-sourcing music easier,” Yli-Hollo explains. Another interesting functionality included in the platform allows fans to have access to the actual production of a music track. “Imagine if an artist like Madonna would build a song online, giving fans access to hear the song as it is being written, having them comment the track and share the process of writing music,” Yli-Hollo suggests [4]. Could such ideas cause the next big disruption in the music industry?

AudioDraft is a perfect example of a firm that uses crowdsourcing to empower customers to create new products and even distribute them to other people or firms. Such cases show the unlimited potential of crowdsourcing. We have already looked into consumers customizing products that firms offer and the principles of this customization process [5]. Perhaps it is time to look into consumers creating custom products for themselves, from which they alone profit and through which they create a different kind of value for firms, not monetary. This is the next step as the market is moving towards a “craft-consumer”, one that brings skill, knowledge, judgement and passion while being motivated by a desire for self-expression in the process of creating a new product [6].

References:

[1] http://techcrunch.com/2013/07/17/audiodraft/

[2] http://www.goodnewsfinland.com/archive/news/audiodraft-launches-online-store-for-exclusive-audio-tracks/

[3] http://www.arcticstartup.com/2013/07/18/audiodraft-picks-up-e300000-to-grow-audio-sourcing-platform

[4] http://venturebeat.com/2010/05/24/audiodraft-gives-musicians-new-tools-for-online-worldwide-collaboration/

[5] Randall, Taylor, Christian Terwiesch, and Karl T. Ulrich. “Principles for user design of customized products.” California Management Review 47.4 (2005): 68.

[6] Campbell, Colin. “The Craft Consumer Culture, craft and consumption in a postmodern society.” Journal of consumer culture 5.1 (2005): 23-42.

Find information through people


Nowadays, a lot of start-up pitches start with: “We are the Google of “fill in…”. Zeef.com did not, Zeef.com is saying they will do/are doing (a bit) the same as Google, only better. That sounds not realistic, but is it though?

Zeef.com is competing with algorithms by using us, using our knowledge. The core-thought of Zeef.com is, that people are able to come up with better suggestions than Google’s algorithm does, everyone for a specific topic/subject within his or her knowledge domain. So, they, the founders of Zeef.com, asked themselves: why aren’t people with specific knowledge of topics doing the searching and filtering (Zeef = sieve) for us with regard to web-search: “It is time for human knowledge to advance where algorithms have reached their limitations.” (Klaas Joosten – founder, 2015)

How it works? Everyone can set up a page about a specific topic. Within this topic page you can create different lists for subtopics; for example a HTML list (subtopic) within the topic web-development (example). Within this list you are able to rank different web pages based on content of HTML. Finally, if someone is searching for programming information on Zeef.com, it proposes a specific page about programming based on views, rating, etc. all in order to let him/her find the information.

So, why do they think someone will create a page? Zeef.com integrates affiliate marketing within the pages; you can earn money by creating pages without using banners and other adds. If someone will buy something or clicks on specific content redirected by your Zeef page, both you and zeef.com will get a fee (if the specific webshop is using affiliate marketing).

In first instance it sounds a bit like startpagina.nl to me, doesn’t it? The concept is the same, definitely. However, within startpagina.nl you cannot compete within topics. This competition needs to increase the quality of the pages. Besides, you can embed a Zeef-list into your own (blog) website, totally adjusted to your design (example). Zeef.com wants to concur with google Adsense in this way (frido van Driem – co-founder, 2015).

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We are better than google Adsense (Rick Boerebach – co-founder, 2015)

Does it have a chance to survive? They attracted over 8000 curators/list makers within one year, besides they raised an investment of 1,2 million euro, end of 2014 in order to “take over” the US market. On top of that the adjusted lists are a lot more inviting than AdSense banners, resulting in a 15x higher click-through rate (CTR) than those AdSense banners. However, there is a huge critical mass within this market, you definitely need to collect a lot of curators in order to be the standard for someone within web searching. Besides, there is a chance that people only create pages that results in earning money for themselves, instead of sharing the “right” content of their topic (Abuse their knowledge).

All in all, I like the idea and the opportunism of Zeef.com. I often think myself, wouldn’t it be great if someone who knows everything within this subject could help me out. However, maybe I am skeptical because I really like start-ups that want to beat the big boys by focusing on quality… Do you think I am?

Van Driem, F. Co-founder Zeef (2015), Zeef – Waar hebben wij het over?, In: http://articulum.nl/algemeen/zeef-waar-hebben-wij-het/, By: Van Breda, N.

Boerebach, R. Co-founder Zeef (2015), “Zeef”, in: https://fastmovingtargets.nl/episodes/rick-boerebach-zeef-wij-zijn-beter-dan-google-adsense/, By: Blom & Stekelenburg

http://www.sprout.nl/artikel/e-commerce/zeefcom-haalt-groeigeld-op-voor-amerikaanse-markt

Joosten, K. Founder Zeef (2015) “Zeef: About”, in: https://zeef.com/about

http://zeef.org/bloggers/

Social influence bias in online reviews


(This academic blog post is based on Muchnik, L., Aral, S., & Taylor, S. J. (2013). Social influence bias: A randomized experiment. Science, 341(6146), 647-651.)

During our course we learn that there are four functions of customer value creation: recommend & develop products, compose & co-brand products, sell products & digital distribution and P2P support & product evaluations. In this post I want to focus on the fourth function, namely product evaluations.

When consumers make an online purchase decisions, they tend to rely on online reviews generated by other consumers. Consumers regard them as more persuasive than traditional advertisement from marketers and companies, and reports from third party consumer report companies. This is because online reviews focus more on experience than on technical specifications (Lu et al., 2014). Industry reports state that 61% of consumers consult online reviews before making a new purchase (Cheung et al., 2012).

So we know that consumers base their buying decision on online reviews. Muchnik et al. (2013) research if online reviews accurately represent individual opinions about the quality of a product or service. They suspect that social influence create irrational herding effects, where users follow the decisions of prior users. This can lead to suboptimal decisions and a thereby disrupt the wisdom of the crowds. If that is the case, it means that online reviews could easily be manipulated and disturb our decision behaviour.

To research the social influence bias on individual rating behaviour Muchnik et al. (2013) did a large-scale randomized experiment in a news aggregation web site. They find that negative social influence were corrected by other users by giving a positive rating, so there is no significant herding effect there. However, they did find evidence for herding effects by positive social influence. Positive social influence increased the likelihood of giving a positive rating by 32%. Overall, this increased the final ratings by 25% on average.

An important theoretical contribution of this article is that it confirms prior hypotheses on a tendency towards positive ratings, which makes these results more generalizable. This applies to all different kinds of users (e.g. frequent or infrequent voters) that could be distinguished in the experiment. Future research will need to research about the mechanisms that drive individual and aggregate ratings.

Managerial implications can be interesting for companies who want to use reviews as a marketing tool. If they can up vote positive reviews it can lead to herding effects and thereby positively increase sales. Taking the findings of this article in mind, would you be more critical about online reviews? Or are they too important for your decision making process?

References

Cheung, C. M. K., & Thadani, D. R. (2012). The impact of electronic word-of-mouth communication: A literature analysis and integrative model. Decision Support Systems, 54(1), 461-470. Available: http://dx.doi.org/10.1016/j.dss.2012.06.008

Lu, X., Li, Y., Zhang, Z., & Rai, B. (2014). CONSUMER LEARNING EMBEDDED IN ELECTRONIC WORD OF MOUTH. Journal of Electronic Commerce Research, 15(4).

Muchnik, L., Aral, S., & Taylor, S. J. (2013). Social influence bias: A randomized experiment. Science, 341(6146), 647-651

You and Me will Shake Up the News Industry


Using your Twitter account to create your own TV channel, something that became reality last February with the introduction of the Meerkat app. It’s very easy: open the Meerkat app, log in with your Twitter account and press ‘stream’ to start broadcasting. The broadcast will be shared via your Twitter account and can be followed by any other Twitter users.[1]

Meerkat is a promising application: the start-up got over 4.2 million dollar in funding and has over 120,000 users already.[2] Furthermore, after the successful introduction of Meerkat, Twitter launched its own streaming application called Periscope. Both Meerkat and Periscope allow Twitter users to broadcast anything they like. I’m conviced that these streaming apps will shake up the news industry.

Already, news organisations started experimenting with both Meerkat and Periscope. The Economist correspondent Henry Curr answered questions send in via Twitter, using a Meerkat stream. According to the Economist, ‘Meerkatting’ is perceived more informal and a great way to engage with their Twitter audience.[3]

Twitter already got a great impact on the news industry. 78% of all journalists use social media on a daily basis (of which Twitter is used the most) and 74% of all journalists believe that social media have more rapid impact than traditional media. But it’s not the news organisations that will shake up the industry; it’s going to be you and me.

Already, consumers are adding value to the news industry by sharing information about any kind of occurrences on social media (both text and pictures). This is already being used by journalists to pick-up the latest news flashes: 45% of all journalists put out 60%-100% of all they publish as soon as possible – without checking facts – and correct later if possible. Just 20% of the journalists always check the facts before publishing.[4] Via the streaming apps, consumers can start adding value to the news industry by sharing directly what they see: it’s an additional point of view next to traditional news organisations and, moreover, viewers can interact with the broadcasters. Concluding, you and me can help sharing news quicker and more reliable.

So from now on, news organisation are becoming of less importance in providing news to societies? No, that’s a misunderstanding. Meerkat and Periscope were widely used after an explosion in York City. Some were stating that these broadcasts were introducing a new era of journalism, while others were less convinced by the usage of the streaming apps. Jacob Brogan, Future Tense research associate, stated that “People weren’t getting information from either that they couldn’t have found more easily and more clearly on Twitter” because “it was too far from the scene to reveal more than the fact that the fire was still burning”.[5] I do not think that Brogan isn’t right there, but the ‘Meerkatters’ aren’t replacing journalists. While news organisations will remain the most reliable source for news, ‘Meerkatters’ can show news from a different angle and, moreover, followers can interact with the Meerkatters.

You and me are not going to take over news organisations – we shouldn’t even want to do that – but we are going to add value to the news industry!

[1] http://www.emerce.nl/nieuws/nieuwste-sensatie-sociale-media-meerkat

[2] http://mashable.com/2015/03/15/twitter-meerkat-graph-users/

[3] http://www.theguardian.com/media/2015/mar/30/meerkat-periscope-live-streaming-apps-news-twitter

[4] http://www.ing.com/Newsroom/All-news/NW/2014-Study-impact-of-Social-Media-on-News-more-crowdchecking-less-factchecking.htm

[5]http://www.slate.com/articles/technology/technology/2015/03/meerkat_and_periscope_the_live_streaming_apps_aren_t_changing_the_news.single.html

Customer Loyalty and Recommendation Agents


Recommendation agents (RA) are giving online customers recommendations for the past few years. Although the first main function of RAs was to reduce information overload, now it’s also used to increase sales.  More and more information is gathered through the internet and especially social media, to improve personalized preference-based recommendations. At the same time, these systems show success measured by online sales and user satisfaction.

Customer loyalty is considered to be a source of competitive advantage and is useful for long-term business success. Research has shown that there is a strong relationship between customer loyalty, firm’s profitability and stock returns. Returning customers are more profitable than new customers and thus good for business. The aim of the study is to identify the effect between various independent variables (e.g. RA Type, Recommendation Quality, Customer Satisfaction, Product Knowledge, and Online Shopping Experience) and on the dependent variable customer loyalty.

Recommendation quality is based on the preferences of the user and the perceived value of the recommended products. This is the outcome of the type of RA, which could be either content-filtering or collaborative-filtering. Also, the impact of the moderating variable Product Knowledge and shopping experience will be measured. When having expertise in a product, this could negatively affect the customer satisfaction when being advised by a recommendation agent. Shopping experience is also hold in account because the more shopping experience a customer has, the more likely the customer is familiar the interaction with RAs, and the more likely the customer is able to use a RA effectively.

The main reasons for the study is that from marketing perspective, the adopted cognitive-affect-conative-action framework of customer loyalty has not been empirically tested in the context of RAs. This framework states that customers become more loyal when going through multiple stages. Every stage represents some sort of loyalty. There has also been done little research assessing the effect of increasingly higher customer expertise on customer loyalty in the presence of RA usage. Thus, central in this research are the moderating effect of product knowledge on the relationship of Recommendation Quality and Customer Satisfaction.

The results showed that the collaborative filtering RA has a higher recommendation quality than a random RA. The recommendation quality has a positive effect on customer satisfaction and customer loyalty. Also, customer satisfaction is positively related to customer loyalty. The results also show that the impact of recommendation quality on customer satisfaction is negatively moderated by customers’ product knowledge. Thus, product expertise negatively affects the perceived value of the outcome of a RA. Shopping expertise does not have an effect the relationship between customer satisfaction and customer loyalty.  70% of the variance in customer loyalty can be explained by customer satisfaction. This research has shown that an effective use of RA positively influences recommendation quality which in turn positively influences customer satisfaction. When users will have increasing levels of product knowledge, it will negatively influence the customer satisfaction with the website.

The increased knowledge about RAs and how it will increase customer loyalty towards your website is interesting for businesses to retain customers. However, retaining customers are likely to get an increased level of product knowledge. Thus, RAs should always be innovated more and more.

References:

Yoon, V. Y., Hostler, R. E., Guo, Z., & Guimaraes, T. (2013). Assessing the moderating effect of consumer product knowledge and online shopping experience on using recommendation agents for customer loyalty. Decision Support Systems, 55(4), 883–893.

Creativity of the Crowd – Pornhub’s Ad Contest


“Do you have what it takes to be the Creative Director of the world’s No.1 adult website?”

Last year, the YouTube of Porn, otherwise called Pornhub, challenged creative enthusiasts to come up with non-pornographic advertising concepts to advertise the platform to a wider audience (Adweek.com). The adult website coined its search for ad material a hunt for SFW (Suitable For Work) advertising. As the contest stated, “Traditionally, porn has been a taboo subject – but the fact is, over 35 million people visit Pornhub.com every day. How do we reach the next 35 million? We need a national advertising campaign that can be channelled through mainstream media (Pornhubcampaign.tumblr.com).” In order to succeed, contestant had to come up with family friendly ideas that still manage to convey the nature of the site (Huhmagazine.co.uk). The person with the best idea would be awarded with a one-year contract to be Pornhub’s creative director.

Through the use of wordplay and subtle imaging, designers and ad creatives all over the globe submitted brilliant and subtle images and videos. One entry displays a bus stop outside of a university campus, displaying a two meter high white poster ad with the copy Where are you getting off?, subtly accompanied with the Pornhub logo. Another image displays typical male and female toilet symbols in combination of male-female, as well as female-female, female-man-female and many others, accompanied with the quote We’ve got it all. Yet another minimalist ad shows the shadow of a bare hand with the text America’s Largest Do-It-Yourself Website.

pornhub-finalists-13-2014 pornhub-finalists-07-2014 pornhub-finalists-11-2014

This crowdsourcing describes a new web-based business model that harnesses the creative solutions of a distributed network of individuals through what amounts to an open call for proposals (Howe, 2006). According to some, the creative industry increasingly relies on crowdsourcing to find solutions to problems. Mau (2004) states that problem solving is no longer the activity of the individual genius, but he is hesitant to a business model in which problem solving is radically distributed beyond the boundaries of professionalism. Clearly, he is not the only one convinced of the power of crowdsourcing over professionalism. As one commenter on the Adweek.com article notes, “So does Pornhub specialize in amateur? Pay for great ideas, work with people or agencies with a track record or success, you might just get great ideas (Adweek.com).” As Brabham (2008) notes, “where design teams and other group collaboration rely on collections of experts, the wise crowd insists on the presence of non-experts, on the presence of amateurs.”

In the case of Pornhub, I think their quest for creative ads is the perfect example of consumer value creation. Even though the contestants might be amateurs, they have come up with some pretty unique ways to communicate the brand to a wider audience. Besides the results of the contest, the company Pornhub has profited from the PR of the competition, it has managed to actively involve its consumers in its business and has found itself a new creative director.

Now, judge for yourself. What do you think of Pornhub’s contests that challenges the crowd to come up with subtle ad’s to reach a wider audience in a family friendly way while still conveying the nature of the website? For one, do you think professional ad agencies could have come up with better ideas than the contest results?

Sources

  • Howe, J. (2006) ‘Crowdsourcing: A Definition’, Crowdsourcing: Tracking the Rise of the Amateur .
  • Adweek
  • Brabham, C. 2008. Crowdsourcing as a Model for Problem Solving. The International Journal of Research Into New Media Technologies.
  • Mau, B. with Leonard, J. and The Institute Without Boundaries (2004) Massive Change. New York: Phaidon.
  • Pornhub Campaign Tumblr (SFW)
  • Huhmagazine.co.uk
  • Daily Dot

Make money in the supermarket!!


Are my products placed in the right shelves? Is my in-store activation plan executed perfectly across all super markets? These are questions marketers of major brands face on a daily basis, and Roamler may have found the most innovative solution to answer them so far!

Major consumer goods enterprises have always relied on field teams to evaluate whether their designed marketing strategies were well-executed in-store. A rather time and resource intensive endeavor, seeing as these would have to travel between all different supermarkets present in our country. The Dutch start-up Roamler noticed how this was causing a problem for major brands and thought up a creative solution to simplify the process. Seeing that most people have smartphones with cameras these days, why can’t we let consumers themselves do the work?

Roamler has made smart use of a number of trends including the power of crowdsourcing, the mobile trend, the trend of gamification and the fact that apps can now operate location based.  These features are built into a slick looking mobile interface in order to bring the concept of value co-creation to the retail industry. In principle, Roamler allows for consumer goods organizations to ask questions or set out tasks to users of the platform. The users closest to the task’s location will get an update and may opt to complete the task in return for either money, points or badges. Typically, such tasks will include evaluations of the shelf backed up with a photograph.

According to Saarijärvi et al. (2013) it is important in any value co-creation effort to have a clear picture of what value is created for whom. In this scenario it is the information that is of value to the companies. Companies can use this real-time information to quickly assess where the retail execution could be improved, and mobilize their field employees to make quick adjustments accordingly. For the users it is the monetary reward as well as the possibility to ‘level up’ and unlock new features that creates value to them. In short, the company quickly gets the information it needs, while the user earns some instant benefits for a minor effort. A classic win-win scenario.

Not surprisingly, this simple but effective use of co-creating value between consumers and consumer goods brands was not left unnoticed. In 2011, the year Roamler started, the start-up won the Accenture Innovation Audience Award in the category Media, Communication & High Tech.

Having read about this easy way to earn some extra cash, you may have already whipped out your smartphone and opened up your appstore. Unfortunately, Roamler follows a rather strict entry program and only users who have received a personal invite may participate. Such an invite can only be sent by Roamler users who have at least reached ‘level 3’. When selected, Roamler offers a training program which the new user needs to complete before being sent out on real tasks. This way, Roamler tries to build an exclusive community of high quality Roamlers which can be chartered to participate in tasks of the various clients.

http://www.accenture.com/Microsites/innovation-awards/2011/mcht/Pages/index.aspx

http://www.marketingfacts.nl/berichten/20120120_roamler_altijd_toegang_tot_een_mobiele_workforce

http://www.roamler.nl/Join

Saarijärvi, H., Kannan, P., & Kuusela, H. (2013). Value co-creation: theoretical approaches and practical implications. European Business Review, 6-19.

Getting paid while doing nothing at all!


Throughout the world people join forces to build the kind of economy that we want to see. We share our homes, our cars, our knowledge, our time and our money. SnappCar is a Dutch platform offering a mediation service for those who want to rent their car to others and for those who want to rent a car. With this service SnappCar creates more consumer value, but it also asks for active consumer participation. Ronald Kleverlaan of CrowdfundingHub indicated SnappCar as the number one amongst all crowd-funding projects last year. The crowd-funding yielded more than half a million Euros through crowd-funding!

According to SnappCar, every day 23 million cars are not driving for 23 hours a day in Europe. This is waste of products, space and money, especially because a lot of people cannot afford to have a car themselves. SnappCar’s mission for 2018 is to have 1% less cars in Europe, which will lead to a reduction in CO2-emision as a result of the production of cars. SnappCar thinks they can make this impact by letting car owners earn money by renting their car to others for shorter periods of time.

They idea is very simple, you have something that costs a lot of money and you only use it for a small amount of time, so why not rent this product to others, to earn some money back? Besides the money you earn, you also help others by providing them your car for a lower price then the traditional car rental agency. As stated on Snappcar’s website “You will live a more conscious life and you meet friendly people in your neighborhood.” SnappCar provides all-risk insurance, 24/7 road assistance, contracts, payments and a trustworthy community, as to ensure that participants do not have to worry paperwork and other negative side effects.

SnappCar is a user-friendly platform as it provides all the information you need when renting a car. As you can see below on the images, it has information about the car owner, the average rating, the price per day, some images of the car itself and the specifications of the car. It is also possible to read some reviews or post a review yourself after borrowing a car. These reviews and ratings help other users make their decision to rent a car more easily. In the United States, SnappCar just received as one of the first Dutch companies a B Corporation certification. B Lab awards this label to companies that achieve solving social and environmental goals.

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A major negative effect of the car sharing platforms is that traditional companies such as car manufacturers, car dealers, but most of all car rental agencies will face a potentially huge decline in sales. This counts for other sharing platforms such as Airbnb as well, but in the end the big winners of the sharing economy are the consumer as they can easily get cheaper products and services. But in order to achieve this result renting the products should be as easy as owning the product!

http://www.nu.nl/weekend/3905769/de-deeleconomie-wordt-deelmaatschappij.html

https://www.snappcar.nl/snappcar-in-het-nieuws

http://www.telegraaf.nl/dft/ondernemen/socialezaken/23819780/__SnappCar_goed_op_weg__.html

http://feb.kuleuven.be/eng/ew/Articles%20press/2013/JK_DeStandaard_250513.pdf

Why do people fill in reviews on online platforms?


With the new Internet technologies, traditional word-of mouth communication has been extended to electronic media, such as online discussion forums, electronic bulletin board systems, newsgroups, blogs, review sites, and social networking sites. Everyone can share their opinion and experience related to products with complete strangers who are socially and geographically dispersed this new form of word of mouth, known as electronic word of mouth (eWOM). This research is about eWOM which has become an important factor in shaping consumer purchase behavior. In early research is found that information provided on consumer opinion sites is much more influential among consumers nowadays.

For instance, eMarketer revealed that 61% of consumers consulted online reviews, blogs and other kinds of online customer feedback before purchasing a new product or service. In addition, 80% of those who plan to make a purchase online will seek out online consumer reviews before making their purchase decision (Infogroup Inc, 2009). Some consumers even reported that they are willing to pay at least 20% more for services receiving an “Excellent”, or 5-star, rating than for the same service receiving a “Good”, or 4-star rating (Comscore Inc, 2007).

Cheung et al. (2012) stated that we do not fully understand why consumers spread positive eWOM in online consumer-opinion platforms. Among the few existing publications, eWOM behavior is primarily explained from individual rational perspective with the emphasis on cost and benefit. Consumer participation in online consumer-opinion platforms depends a lot on interactions with other consumers. But why do people participate and are what stimulates consumers eWOM intentions?

The following variables were defined in this research as influencers of consumers’ eWOM intentions: Reputation, Reciprocity, Sense of Belonging, Enjoyment of helping, Moral Obligation and Knowledge Self-Efficacy. To test their theoretical framework they conducted a research using a sample of online consumer-opinion platform users from OpenRice.com. In total they collected 203 usable questionnaires.

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After this study three variables were found significant: Reputation, Sense of belonging and Enjoyment of Helping. Sense of belonging had relatively the most impact on consumers’ eWOM intention. The result is consistent with previous eWOM marketing literature, where sense of belonging is an essential ingredient that creates loyalty and citizenship in a group. Also enjoyment of helping others is crucial in affecting consumers’ eWOM intention. Intentions to write about dining experiences in OpenRice.com demonstrate enjoyment of helping others. Consumers can benefit other community members through helping them with their purchasing decisions. Reputation is a small factor affecting consumers’ eWOM intention. This can be explained by some consumers want to be viewed as an expert by a large group of consumers.

The results of this research can be practical relevant in different ways. Online consumer-opinion platform could allow consumers to create their own personal profile to create a stronger sense of belonging to the group. Also platforms could apply reputation tracking mechanisms, so ‘’experts’’ can be found more easily. And last, the platform could provide a mechanism for contributors so readers can show their appreciation for the received reviews, like a chat.

References
– Cheung, C. M., & Lee, M. K. (2012). What drives consumers to spread electronic word of mouth in online consumer-opinion platforms. Decision Support Systems, 53(1), 218-225.

– ComScore Inc., Online consumer-generated reviews have significant impact on offline purchase, http://www.comscore.com/Press_Events/Press_Releases/2007/11/Online_Consumer_Reviews_Impact_Offline_Purchasing_Behavior2007.

-eMarketer.com., Online review sway shoppers, http://www.emarketer.com/Article.aspx?R=10064042008Last accessed.

– Marketingonline.nl, http://www.marketingonline.nl/nieuws/word-mouth-marketing-blijft-last-houden-van-roi-issues

IKEA & co-creation


IKEA, the Swedish furniture company calls itself the Life Improvement Store. They want to reach even more consumers with their different solutions and demonstrate the unique ideas they have to make everyday life at home better.

Talking openly about co-creation with customers is a main driver for product innovation and creativity. Values as a constant desire for renewal or providing solutions to problems are rooted in their history and how they have evolved as a brand and as a company. Those values have provided a perfect environment for IKEA to “dare” relying on consumer insights to drive marketing and product ideas.

With the Home Tour, which is an initiative to send five American employees on a yearlong road trip to provide families with makeovers that use merchandise from local IKEA stores. This experience will provide many conversations to understand participants needs and desires that can ignite new product developments. The campaign is being made in a documentary series to be produced by creative employees within the IKEA head office. It is published on a special YouTube channel.

This way IKEA is studying people, getting close to them, going into their homes, having conversations, and reading reports. They try to understand and fulfil the needs of consumers, dreams and desires. Through the Home Report they have the opportunity for consumers to tell what is going on in their life and how they can help them. All that information can feed back to communication, to product development, to a store, an online experience.

For me, it comes back to co-creation, collaborative effort between co-works, consumers and the brand” – Rich D’Amico, Deputy Marketing Director at IKEA USA

The fact that consumers are co-creating the value with IKEA through their involvement and work only seems to enhance the service experience, and thus make it easier to develop these relationships. It is in the successful management of these relationship building interactions and experiences that IKEA appears to excel.

I think IKEA is doing a good job by interacting with consumers to better understand their needs, dreams and desires. Especially when the company is visiting consumers’ home the company can understand the consumers and anticipate on it. Customers construct the furniture themselves, so it must be easy and practical to stay competitive to other furniture companies. With the inspiration of customers this can be accomplished, because other customers will also benefit from the improvements. A lot of what IKEA is doing drives marketing is co-created with consumers. And what they do in terms of product development is co-creation with consumers.

Sources:

http://www.co-society.com/ikea-prefers-call-co-creation-product-development/

http://www.psfk.com/2014/04/ikea-home-makeover-tour.html

http://www.psfk.com/2014/07/ikea-brand-strategy.html

H&M’s Digital Move


Hennes & Mauritz, better known as H&M, is a Swedish multinational retail clothing company that most probably does not need an introduction. It was founded in 1947 and is still very successful worldwide, mainly due to putting all of its customers central. H&M’s online presence in terms of a web shop, a smartphone application, and several social media accounts plays a major role in H&M’s success, as this has enabled H&M to continuously observe and interact with its customers. The 31st of March, H&M will come with something new to take its customer relationships to the next level. Namely, it will introduce a digital customer loyalty program in the Netherlands. This will make the Netherlands the second country in the world with a H&M loyalty program. According to the country manager of H&M in the Netherlands, this move is now made in order to capitalize on the relatively high amount of online orders of customers in the Netherlands.

The past years loyalty programs have become more and more digitalized. The non-digital loyalty programs involved getting stamps for every €5 spent. They evolved into digital loyalty programs with member cards that had to be scanned after every purchase in order to receive loyalty points. Currently, there are loyalty cards that have to be connected to an online account to collect customer demographics information. Clearly, loyalty cards came into existence to bind customers to a certain business. Over the years this mindset has changed, and at this time businesses primarily want to have as much relevant customer information as possible to be able to better adapt their products and deals to their customers.

H&M is taking a slightly different but more advanced approach with its loyalty program ‘H&M Club’, by integrating a customer loyalty card in the H&M application. Joining the club is free, and when one has joined the club, he or she will receive one point for every euro spent, in addition to 50 free “welcome points”. The points can be redeemed for weekly changing discounts, but more importantly, these points can also be exchanged for access to exclusive events. Customers are given the opportunity to attend designer events in cities such as New York or Paris, be present during H&M photoshoots, or get a guided tour at H&M’s headquarter in Stockholm. This method has been selected because it is more sustainable not to have an actual member card, but the main reason is that customers are demanding more and more engagement and transparency from H&M.

H&M’s loyalty program seems to be a promising addition to H&M’s existing business model, especially since it offers its customers the opportunity to increasingly engage with the brand. The free welcome points give the customers a head start which may lead to a greater use of the program, as the rewards become easier to reach. Furthermore, points can be redeemed in different quantities, depending on the chosen deal. Moreover, the discounts and events offered by the H&M Club are most likely treats that customers would not spend their own money on and can lead to customers buying things that they would not have considered buying before. The previously mentioned components of the H&M Club have been cited by scholars as important levers of loyalty (Nunes & Drèze, 2006). Based on this and H&M’s long-term success, its loyalty program is likely to succeed.

Sources:

http://about.hm.com/

http://www.glamour.nl/fashion/nieuws/artikel/punten-sparen-bij-de-h-m-club-2451

http://www.metronieuws.nl/mode/2015/03/punten-sparen-bij-hm

http://www.telegraaf.nl/vrouw/mode/23837046/__HM_lanceert_digitale_klantenkaart__.html

Nunes, J.C., & Drèze, X. (2006) Your Loyalty Program Is Betraying You. Harvard Business Review, 84(4), 124.

Radio Rent-out!


So after looking around on the web in search of some interesting customer co-creation contests and products, I found this (quite interesting, yet not good-looking) website (http://www.co-creatornetwork.com/index.htm) in which you could ‘buy’ your own airtime, and create a radioshow.

For 85$ a week you get an one hour show. Although the theme at this point is your general enlightenment, and transcending your earthly state, it’s an interesting idea to transfer this idea to mainstream radio. If for example you are a fan of techno music, only listening to your radiostation, because it really fits your taste of music but you miss certain songs, or think you could do a better job. It might be an idea for radiostations to rent out hours, or give them away in a competition (in which listeners give either creative suggestions, or Continue reading Radio Rent-out!