In this article Dr. Hamsa Thota elaborates how Web 2.0 technologies are enabling SMEs to do business in new ways and encourages SMEs to experiment with social media. By transforming the way they innovate, market, and distribute products as well as collaborate with customers, SME leaders can solve the most vexing problem faced by SMEs: “We have a great product; but only few customers.”
SME leaders can grow businesses by changing what they do and how they do it, i.e. do business in new ways. Internet removed geography as a barrier to bring together people and ideas into groups and networks within enterprises, or between enterprises and their fans, technical experts and intermediaries to solve real business problems. Social networking refers to the way interorganizational exchanges are managed with an emphasis on personal and social connections based on long-standing relations and trust. Consumer insights mined from social net working sites provide holistic understanding of consumer preferences and behaviors. Collaborative innovation is made possible by Web 2.0 technologies.
Use of Web 2.0 technologies for solving problems and co-creation
IBM’s Innovation Jams reach out online to bring different minds and different perspectives together to discover new solutions to long-standing problems. Companies in pharmaceutical and other industries use InnoCentive, a “crowd-sourcing” network to solve difficult problems. Jeppesen Sanderson Inc. co-created with pilots an interactive mobile enroute flight application called Mobile FlightDeck, a paperless navigation tool for iPad. Automotive companies use Web-based user design as a co-creation technique. 7000+ customers participated in co-developing the Audi in-car multimedia system. The T-shirt Company Threadless uses its customers’ design ideas to help create its apparel lines.
Use of public social platforms for feedback and gaining customer insights
Andrew McAfee described Enterprise 2.0 as “the use of emergent social software platforms within companies, or between companies and their partners or customers”. Facebook is a dominant platform in social media. LinkedIn is popular among professionals in the high tech or professional services sectors. Other content oriented social media sites include Twitter, Google+, Pinterest, YouTube, Yelp, FourSquare, Level Up; Reddit, Stumble Upon or Digg each with its unique profile.
Subway engages fans through its Facebook page. Hewlett Packard has a substantial presence in LinkedIn. Disney achieves high rate of fan responses across multiple platforms. Ford uses Facebook to monitor likes and dislikes of its vehicles in fan pages. Starbucks asks its Facebook community of loyal fans for feedback. Kit Kat UK gave its fans the ability to vote on the next, new flavor of Kit Kat Chunky bar using Facebook consumer collaboration. With Facebook consumer collaboration, Kit Kat customers became more involved in new product decision-making and turned into fans. Face Book’s new Graphic Search feature enables navigation through billions of photos and trillions of user “likes” and connections between the users.
Use of in-house enterprise 2.0 social platforms for product innovation
Use of in-house enterprise 2.0 social platforms for collaboration with fans is a new concept though external collaboration with partners to access new technologies and new markets is widely accepted practice in “open innovation”. Collaborative innovation with fans is also called social product innovation.
Several companies are experimenting with in-house websites for social product innovation. Ford solicits small and big ideas to improve current models or launch new vehicles on its Ford Social website. Ford received more than 3000 ideas for technologies. Ford feeds all ideas into an internal predictive model to evaluate the ideas, vote, and select concepts that are feasible. GE also maintains its own social site. In the GE ecomagination Challenge, Powering Your Home, more than 70,000 people visited GE site, submitted approximately 800 ideas and 10,000+ comments to improve the creation, management and use of energy in the home. The ‘My Starbucks Idea’ allows fans to share ideas with Starbucks in three categories: product ideas, experience ideas, and involvement ideas. Starbucks fans can also comment and vote on ideas of other fans. The My Starbucks Team reviews all ideas, and then launches popular ideas such as Starbucks Refresher beverages and built Starbucks reward program based on fan feedback. In January 2013 Starbucks began selling Square Mobile Card Readers in its U.S. stores and accepting mobile payments using Square Wallet.
Clear strategy needed for social product innovation
SMEs need clear strategy to use social platforms to seek out target consumers and then engage them. Each social platform has unique signature. For example, Pinterest has an image-centered platform and pinboards that allow small businesses to showcase their product offerings. SMEs can post pictures or videos on Pinterest to solicit feedback before launch of apparel, food, fitness, and art and decor products. SMEs can also engage creative consumers, brand lovers, and influencers to drive sales of novel products and services. Hutzler Manufacturing Company’s yellow plastic banana slicer became a top seller on Amazon after satiric reviews appeared on blogs and YouTube. SMEs need to monitor Internet buzz about their products or services and have a strategy to maintain online reputation.
Experiment with social media throughout new product development
Social media research can be utilized throughout the new product development process to 1. Monitor consumer and market trends, 2. Evaluate current products, 3. Map consumer decision-making, 4. Identify new product platforms, 5. Develop or refine new product ideas, and 6. Optimize go to market strategies.
In addition to public and in-house social networks, private social network sites like Path and GroupMe are creating new context to communicate intimately with family and friends. Experimenting with private social media channels, SMEs can create a roadmap of decision-making by targeted consumers. In the back end of innovation, SMEs can experiment with private social media panels to optimize marketing mix, and pre-test marketing and promotional messaging.
SME leaders can transform the way businesses innovate, market, and distribute products as well as how they collaborate with customers. Using social media, they can solve the most vexing issue faced by SMEs: “We have a great product; but only few customers.”
Dr. Hamsa Thota is the President of Innovation Business Development, Inc. (INSME Member), an innovation performance consulting and training company in the USA. Dr. Thota has 25 years of senior R&D management experience in the US food industry and holds 10 US patents. He is co-author of Key Concepts in Innovation, a fundamental reference book on innovation. He was a visiting professor at the Management School of the Zhejiang University and an Honorary Professor at the Geely Automotive Engineering Institute in China. He is a past president of the Product Development and Management Association.