“The paradigm is changing and innovation can no longer go downwards.” Pascal Ansart, strategy consultant at Price Waterhouse Coopers (PWC)


Description

While consumers are highly incentivized to create a product or service by themselves, they are also enticed to co-create it hand in hand with brands, be it before the production stage or after it. Indeed, consumers – and Millennials in particular – don’t just want to buy a brand, they want to be a part of it.

Consumers are moving from passively consuming a product towards actively being involved in the creation process of the brands they buy.

Purchase is no longer the end of the relationship. Now consumers often enter into an on-going relationship with a brand during which they enjoy, advocate for and bond with it. Consumers are moving from passively consuming a product towards actively being involved in the creation process of the brands they buy. From rational processes used to stimulate co-creation such as focus groups, brainstormings, online communities, design schools, creative pitches, and crowdsourcing platforms to more emotional ways like meeting the designer or the artisans behind a product, participative marketing is taking new directions, challenging established brands still using traditional methods.

Co-creation

Before production, crowdsourcing platforms open up a talent pool for research and development. In the end, the objective is to produce a product that better fits their consumers’ desires. Not only do people – and particularly Millennials – desire to co-create products and services, but they also wish to be part of the customer journey and experience, beyond what social media offers. Back in the day, open source software seemed like a radical hit on corporate ownership and profit potential. Today, consumers feel entitled to open source everything. They buy into a two-way relationship in which they get to express their desires, and brands get valuable, early feedback. What drives these contributors is the fun and enjoyment that they experience through their participation, including skill variety, task identity, task autonomy, direct feedback from the job, and pastime. When it takes place within a community, motivations relate to community participation, and include community identification and social contact. Another form of social motivation is the prestige or status as co-authors they receive through public acknowledgment for their contributions. Finally, helping to make a product becomes a reality through feedback and support is a smart way for future buyers to tailor the final product to their individual specifications. Participation has seen an incredible boost from advancements in digital and mobile technology, which not only allows Millennials to be a part of the equation, but makes it something they expect and demand. In fact, a product’s hackability may be part of a purchasing decision.

Crowdfunding

The stringent post-recession lending policies pursued by banks and the resulting difficulties experienced by small businesses looking for credit have led people to turn to online crowdsourcing platforms (Kickstarter, Kisskissbankbank, Indiegogo) to have a chance to launch their projects. In 2013, the crowdfunding industry grew to be over $5.1 billion worldwide, as stated in the 2013 CF Crowdfunding Industry Report. Most of that growth comes from developed economies, but a 2013 World Bank report predicts that crowdfunding in China could reach $50 billion by 2025—and Brazil may not be far behind. Empowered by technology and the crowdfunding logic, anyone now has the potential to express their creativity and to be supported in return by their like-minded peers. An avalanche of small and big initiatives is eager to get funding from ‘the people’. The movement has gained stronger momentum with the 2012 Jumpstart the Business Startups Act enacted by U.S. legislation that eases several federal financial regulations, and for the first time allows unaccredited small investors / consumers to buy equity in start-ups.

In 2013, the crowdfunding industry grew to be over $5.1 billion worldwide, as stated in the 2013 CF Crowdfunding Industry Report.

Engaging with products and services pre-launch brings people the thrill of being the first to get it when it is finally realized; along with the status related to being involved pre-launch and having the right product; they’re not simply connecting with a great product or service, but with a broader movement or cause that they believe in, providing a sense of belonging that goes beyond the thrill of possession. Moreover, investors are passionate about the products they support, explaining why Kickstarter claims that a product idea is eight times more likely to be fully funded on its platform than sold through a U.S. corporation.

Featured examples

CutOnYourBias

Credit:  Cut On Your Bias’s Twitter account

Credit: Cut On Your Bias’s Twitter account

CutOnYourBias is a crowdsourced fashion collaboration between new designers and potential customers. Every week, members get to pick their favorite pieces from a selection of designers. When the votes are done at the end of the week, the winning design goes into limited production. Once a certain quota is reached, 15 to 20 pieces only are available for purchase exclusively from the online platform a few weeks later. This way, ordinary people are helping exclusive design become a reality.
United States of America United States, October 2013

“Habiter c’est choisir”

Credit: Habiter-cest-choisir.fr

Credit: Habiter-cest-choisir.fr

In France, the city of Montpellier has launched a participative project for the construction of a new building aiming at replacing a former high school. Such a participative housing concept allows individuals to work together on a real estate transaction from five to twenty units. The project they develop consists of both private spaces (homes) and common spaces (laundry, meeting room, guest room, etc.). All are involved in the building design and the selection of materials during the construction phase and, once finished, they are responsible for managing the condominium.
France France, January 2014

De Correspondent

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Dutch news site De Correspondent has done a spectacular job in fundraising about $1.3 million to launch a new online journalism platform on Dutch national television. The idea came from Rob Wijnberg, former editor-in-chief of the newspaper nrc.next, who launched a crowdfunding campaign aiming to get 15,000 people to pledge €60 for a one-year subscription to the news site. Results were better than expected since after eight days, 15,000 people had subscribed, and many had added donations on top of their subscription fee. In just over a week, the Dutch crowdfunding project had raised over €1 million (about $1.3 million).
Netherlands Netherlands, April 2013

GoFundMe

Credit: Gofundme.com

Credit: Gofundme.com

GoFundMe, a crowdfunding platform for personal projects, has recently created a page dedicated to medical treatments – quite a relevant initiative in the US, where healthcare is not affordable for everyone. Right after the country learned that nurse Nina Pham had contracted the Ebola virus while treating a patient, her friend launched a fundraising campaign on GoFundMe to help her pay expenses. She aimed at raising $70,000 but she actually got $89,132 pretty quickly and is no longer accepting donations. Now, Pham requests that donations be directed to Doctors Without Borders to help combat Ebola abroad.
United States of America United States, October 2014

Distillerie de Paris

Credit: Distilleriedeparis.com

Credit: Distilleriedeparis.com

A micro-distillery is about to open in the 10th district of Paris. La Distillerie managed to obtain official authorization, the first issued for a hundred years, to produce new spirits in the French capital. The initiative comes from the Julhès family, owners of a fine deli in the area, who launched a crowdfunding campaign on KissKissBankBank. The infatuation among consumer participants was so high that the amount collected ended up to be four times greater than expected. In doing so, people got the feeling of being part of a collective project, and thus becoming more than “just” mere consumers.
France France, April 2014

“Tous mécènes”

Credit: Tousmecenes.fr

Credit: Tousmecenes.fr

In early October, the Louvre museum started a crowdfunding campaign to raise €12.5 million in order to purchase a jewelled piece of 18th-century furniture, the “Teschen Table”. According to the museum, “its acquisition is a unique opportunity to keep in France a masterpiece whose symbolic, historical, and artistic dimensions perfectly embody the Louvre’s vocation as a national museum.” The goal is to raise one million euros before January 31, 2015. The Louvre is the second major French museum to turn to crowdfunding this month to pay for projects and acquisitions. The Louvre has also been known as the institution to have the most crowdfunding experience. Since 2010, it has received more than €4 million from almost 20,000 donors for acquisitions of a medieval painting and ivory statuettes.
France France, October 2014

Business & Marketing guidelines

1

Not only listen to your customers but also make them participate in the product manufacturing process. It will allow your brand to build sustainable relationships with consumers and thereby develop a deeper connection and better brand loyalty.

2

Display and evidence that you are open, friendly, honest, trusted, transparent, and somewhat ‘human’ in order to appeal to Millennial consumers who, as increasingly business-savvy audiences, are often looking for both a financial and an emotional return.

3

Welcome every initiative, idea, opinion if you aim to be successful selling goods and services to Millennials. Certainly not everything consumers do to a project is noteworthy, but this a great way to deeply involve your customers with your brand.

4

This is having a dramatic impact on marketing. Today, brands can collaborate with these creative consumers, turning communication into co-creation while appealing to those who want the chance to connect with a ‘special’ product before launch.

Summary

  • Consumers are enticed to co-create products hand in hand with brands, be it before the production stage or after it. Millennials don’t just want to buy a brand, they want to be a part of it.
  • Before production, crowdsourcing platforms open up the talent pool for research and development. Not only do people desire to co-create products and services but they also wish to be part of the customer journey or experience, beyond what social media offer.
  • Individuals have turned to online crowdsourcing platforms to launch their projects, which means anyone has the potential to express their creativity and to be supported in return by their like-minded peers.
  • In 2013, the crowdfunding industry grew to be over $5.1 billion worldwide, as stated in the 2013 CF Crowdfunding Industry Report. A 2013 World Bank report predicts that crowdfunding in China could reach $50 billion by 2025.

Experts that we recommend

vincent-ricordeau Vincent Ricordeau
CEO of French crowdfunding platform Kisskissbankbank
christian-quest Christian Quest
Founder of collaborative platform OpenStreetMap
stan-amsellem Stan Amsellem
Founder of collaborative music video platform Whojam
ismael-le-mouel Ismaël Le Mouël
Founder of the social movement Social Good Week
jeremiah-owyang Jeremiah Owyang
Chief catalyst & founder of Crowd Companies, which focuses on how large companies tap the collaborative economy, maker movement, and customer collaboration.