potential of social media in the customer interface of innovation process
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Potential of social media in the customer interface of innovation process presentation at EBRF 2010 conference. Authors: Jari Jussila, Hannu Kärkkäinen, Hanna NordlundTRANSCRIPT
POTENTIAL OF SOCIAL MEDIA IN THE CUSTOMER
INTERFACE OF INNOVATION PROCESS
EBRF 2010
10th Annual EBRF “Research Forum to Understand Business in Knowledge Society”
Conference – Co-creation as the way forward
Nokia, Finland
Jari Jussila, Tampere University of Technology
Hannu Kärkkäinen, Tampere University of Technology
Hanna Nordlund, Technology Centre Innopark Ltd
1
Background
• According to a number of so called “success factor studies” of innovation, one of
the most frequently recognized very central drivers (maybe the most commonly
recognized essential individual driver) contributing to the success in innovation
and new product development is the good, in-depth understanding of customer
and market needs (e.g. Barcley, 1992; Rothwell, 1974; Cooper, 1993; Hart et
al., 1999)
• It has been suggested that customers, especially users, are becoming “the
developers” or “the innovators” who can dominate even whole innovation processes
in search for products that fit their needs exactly
• The notion of co-creation is based on idea of working closely with customers. It is
assumed that when a customer is involved as a co-producer, the interaction
between the parties should generate more value in terms of new knowledge and
ideas gained than a traditional transaction process. Co-creation is also expected to
lead to better identification of customer needs.
• Social media can provide novel and useful ways of interacting and collaborating in
innovation, as well as for creating new information and knowledge for innovations
(Barker, 2008; Bernoff & Li, 2008; Cachia et al. 2007), which have not yet been
much investigated because of the novelty of social media concepts and approaches,
and simultaneously, the possibilities of social media are not yet fully understood in
the context of innovation
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Perspective on Innovation
3
Product concept Launch
•Identifying lead users
•On-line communities,
networking employees, users
and customers
•Identifying market trends
•prediction markets
•lead users
•”trend communities”
•User toolkits
• Problem and solution
marketplaces
•Competitions and voting
•Making use of lead users and
online communities
•Testing concepts (for example
on-line communities and virtual
communities, such as Second
Life)
•Voting
•Feedback from new products
(e.g. business intelligence and
data mining techniques)
•User toolkits
•Customization of products
Definition of Social Media and Web 2.0
• Web 2.0 means technologies that enable users to communicate,
create content and share it with each other via communities,
social networks and virtual worlds, making it easier than before,
as well as to have real life experiences in virtual worlds and
to organize content on the internet with content aggregators
(Lehtimäki et al., 2009)
• Social media can be defined as “A group of Internet-based
applications that build on the ideological and technological
foundations of Web 2.0, and that allow the creation and
exchange of user-generated content” (Kaplan & Haenlein, 2009)
• Furthering this, social media is referred to as applications that are
either fully based on user-created content, or in which user-
created content or user activity have a significant role in
increasing the value of the application or the service (Kangas et
al., 2007)
4
Research aims
to study the potential of social media in facilitating the customer
interaction and the creation of customer understanding in the
innovation process
to understand, more specifically,
• how (Finnish) companies perceive the applicability and the
benefits of using social media in the customer interface of
innovation
• how significant opportunities social media is perceived to give
to involving customers in innovation
• how large potential social media is perceived to offer in the
different forms of customer interaction, and
• in which ways social media can support the acquisition of
customer needs related knowledge
5
Research design
• A systematic literature review on social media in innovation
and customer interface contexts was performed
• A questionnaire was designed to study social media potential
and use in the above mentioned context utilizing found
social media related literature, survey- type empirical social
media studies, as well as several social media expert
interviews
• A sample of 1984 Finnish decision makers from companies
with more than 50 employees were surveyed
• Persons working in companies employing more than 50
employees in either research and development or product
design.
• 74 responses were received to the email invitation letter in two
weeks time period, the effective response rate thus being 3.7 %
(74/1984)
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International studies, e.g.
• McKinsey Global Survey ”Building the Web2.0 Enterprise” 2008, 2009
• Forrester ”The Social Technographics of Business Buyers” 2009
• Social Media Today “The Coming Change in Social Media Business
Applications” 2009
• Social Media marketing industry report “How Marketers Are Using Social
Media to Grow Their Businesses” 2009
• Carabiner Communications “Social Media: How B2B Companies can
connect” 2009
• Emarketer “B2B Marketing on Social Networks: Engaging the Business
Audience”
• …
Completely or mostly lacking innovation perspective, customer knowledge
creation perspective or B2B-perspective
0% 10% 20% 30% 40% 50% 60%
Weak signals
Trends
Visionary and radically new product concepts
Customer needs and requirements
New product attributes
Feedback from preliminary product concepts thathave not been launched
User experiences from launched products
How significantly can social media support the acquisition of the following types of customer need –related information?
Little or very little
Moderately
Much or very much
Potential of social media in the
acquisition of different types of customer
need –related information
8
Future- orientation of
related customer knowledge
N = 74
0% 10% 20% 30% 40% 50% 60%
Passing product or service marketingrelated information to customers
Collecting customer information tosupport product development
The company's and it's customersmutual interaction
The company's and the customercommunities mutual interaction
Offering products and services tocustomers for them to develop
products themselves
Little or very little
Moderately
Much or very much
Potential of social media in different
types of customer interaction
9
N = 74
Depth of
customer interaction
Prerequisites for Social Media Use in
B2B Companies
10
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
My company has skilled staff to support social media use
My company has social media guidelines
Training has been provided for social media use
The use of social media is allowed in my company
Prerequisites for Social Media Use in B2B Companies
agree or completely agree neither agree or disagree disagree or completely disagree
in the studied B2B companies almost half, 44.0 % expressed that the use of social media was allowed in their companies
Social Media Use in B2B Companies
11
0,0 % 10,0 % 20,0 % 30,0 % 40,0 % 50,0 %
Social Media Use in B2B Companies
completely agree
agree
neither agree or disagree
disagree
completely disagree
11.0 % of B2B companies agreed (either completely agreed or agreed) that social media was used in their companies
Social Media Use vs. Potential in
Innovation Process Phases
0% 20% 40% 60% 80% 100%
Social media use in collaborationwith other outside organizations
Social media use in collaborationwith product development /
innovation partners
Social media use in collaborationwith customers
Social media use in internalinnovation
Social media use in innovation
rather much or very much somewhat rather little or very little
12
0% 20% 40% 60% 80%
Launch/commercializationphase
The product development phase
The front-end phase
Potential of Social Media in Innovation Process Phases in
B2B Companies
rather much or very much somewhat rather little or very little
0% 20% 40% 60% 80% 100%
Social media offers significant newopportunities to develop the
organizations activities in general
Social media offers significant newopportunities to develop innovation
activity
Social media offers significant newopportunities in discovering
customer demands
Social Media Opportunies in Development of B2B Companies
significant or very significant moderately significant
of little significance or unsignificant
Social Media Use vs. Opportunities in
Development
0% 20% 40% 60% 80% 100%
Social media use in collaborationwith other outside organizations
Social media use in collaborationwith product development /
innovation partners
Social media use in collaborationwith customers
Social media use in internalinnovation
Social media use in innovation
rather much or very much somewhat rather little or very little
13
Social Media Use vs. Innovation Results
0% 20% 40% 60% 80% 100%
Social media use in collaborationwith other outside organizations
Social media use in collaborationwith product development /
innovation partners
Social media use in collaborationwith customers
Social media use in internalinnovation
Social media use in innovation
rather much or very much somewhat rather little or very little
14
0,0 % 20,0 %40,0 %60,0 %80,0 %100,0 %
Social media can save costs
Product development time can beshortened with the help of social
media
Social media can be used to increasecustomer orientation
Social media can help in improvingquality
Social Media in Improving Results of Innovation Activity in B2B
Companies
rather much or very much somewhat rather little or very little
0 10 20 30 40 50 60 70 80
Failed experiments or bad experiences
Inadequate financial resources
Difficulties in integrating to existing information systems
Inadequate time resources
Difficulties in applying to current innovation process
Inadequate personnel resources
Security issues
Lack of case evidence
Difficulties in adopting new mental models and practices
Difficulties in assessing financial gains
Lack of understanding of the possibilities of social media in innovation
Challenges of Adopting Social Media in
Innovation Activity
15
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