Social media is a great environment for marketing, communication, customer service, and pretty much anything related to customers. Some companies even use it for product development by gathering their customers’ needs and wishes using social media channels and analysing the information to improve their offering. They also engage with their customers or anyone who’s interested in their products and encourage them to contribute with idea, feedback, etc. Some examples of companies dong this are: GE, LEGO, Procter & Gamble or Fiat
The advantages of this approach are obvious: companies get feedback that is hard to obtain through traditional surveys, consumer groups, etc. people can vote and choose the best ideas, and they can even collaborate to improve an idea, thus giving it even more value. Despite its benefits, social product development isn’t used much in services industries and very little in business software.
Some of the disadvantages of crowdsourcing are not so obvious. We found a very good presentation on crowdsourcing for product development, which includes a brief comparison of the pros and cons of this approach (on slide 32).
As mentioned in the presentation, crowdsourcing is hard to manage, but that’s usually the case for social media. The main challenge seems to be that you need to understand the crowd in order to really benefit from its feedback and ideas. This is also important in order to decide which are the best ways to engage with the crowd in order to find a balance between the effort required (on your side and theirs) and the expected results.
As opposed to manufacturers or services companies, software vendors may have a few benefits that they could use for social product development. Here are some of them:
– they already have user communities, either formal or not, usually made of people who got together to help each other either with advice or workarounds
– they use help desk and issue tracking software which allows them to gather a lot of information, not to mention that they already have historical data
– they have qualified technical personnel to manipulate and store the data, as well as programmers and DBAs to perform some analysis
– their customers usually have employees with some technical knowledge and probably already implemented all kinds of add-ons and even tools they developed themselves
All these benefits can have little value if the vendor never really encouraged its customers to build communities, if they don’t track issues properly, don’t encourage their employees to engage in activities that are not profit-driven, and don’t learn from their customers. Also, these benefits will not be enough to successfully implement a social product development strategy. Vendors will still need to have a social media presence, engage customers and end users, invest in social monitoring and analytics, etc.
We will try to find a few interesting examples of vendors which actually succeeded in using social media for product development – one would assume that social business vendors like IBM, Jive or Salesforce would all be doing it but software vendors don’t always practice what they preach.