Listen to the authors present their findings (source: June 2019 JM Webinar)
Companies spend millions of dollars amassing customer data, tracking behavior across channels, and developing rich profiles to understand what buyers really want and need. So why not ask them?
Online platforms make it easy and inexpensive to run contests, gather customers’ ideas, and commercialize the most promising ideas into finished products – one reason co-creation has been adopted as a key innovation strategy by nearly 78% of large companies. Thus far, however, the strategy has yielded disappointing results. One of the most heralded co-creation firms, Quirky, withdrew 70% of its 500-plus co-created innovations between 2009 and 2014 because of stagnant sales and filed for bankruptcy thereafter. And at Apple’s App Store, 80% of the apps do not generate enough revenue to survive for more than a few months.
Is the cocreation model a legitimate strategy to drive innovation and adoption of resulting products – or is it flawed by design? A new study in the Journal of Marketing seeks to understand why some products succeed and others fail – focusing on marketing communications as a lever that can help drive success. Marketing communications is often regarded as one of several major influences on innovation adoption and creators typically take two approaches to marketing new products. They either share a consumer creation or genesis story that drives the product or idea (also called user-generated content or UGC) or use more traditional, firm-generated content (FGC) that often stresses a feature’s products and benefits.
When sharing a genesis story, creators take one of two tacks: 1) an approach-oriented message about how they achieved new or desired outcomes; or 2) an avoidance-oriented message that promises to help users avoid unpleasant or undesirable outcomes they themselves experienced. We posited that a motivation mismatch approach that used an approach-oriented (avoidance-oriented) persuasive message paired with an avoidance-oriented (approach-oriented) message would enhance adoption of cocreated innovations more than a matching strategy. A matching strategy uses consistent approach-approach or avoidance-avoidance messages. While novel in the market, a motivation mismatch approach is uniquely enabled by consumer-creators whose personal experiences are a key part of the brand story. We then conducted five studies to test our hypothesis.
Key findings include:
- The common practice for marketing co-created innovations is to label them “user-designed,” first providing information about customer-inventors’ demographics or social affiliations, and then stressing product features.
- However, companies can also leverage authentic creation narratives – stories about innovators’ real-life experiences that motivated their creative ideas – to drive adoption of the products. This approach resonates with low-expertise consumers who reference their own life stories when they consider buying and using goods. High-expertise consumers are less motivated by this phenomenon.
- While advertising best practices stress that firms should use consistent messaging to connect with customers, we found that using a mixed motivation strategy (stressing both approach and avoidance) helps speed individual and mass consumer adoption.
- In one study, sales revenue of cocreated innovations with a motivation mismatch strategy generated 94.9% higher revenue than those using a motivation match strategy.
- In another study, we modeled the takeoff of cocreated innovations, finding that using a motivation match strategy decreased the probability of takeoff by 7% to 10%.
This research offers important implications for managers and companies seeking to leverage the creative power of the crowd in developing innovations. Companies can use authentic creation stories and pursue a motivation mismatch strategy to optimize messaging, drive sales, and accelerate product takeoff for low-expertise consumers. For example, when an authentic creation story is approach-oriented, and consumers’ expertise is low, the cocreating firm should design an avoidance-oriented persuasive message that highlights how the product can help avoid undesired or unwanted consumption outcomes. In addition, the motivation mismatch strategy can help managers target follower-adopters, those consumers who rely heavily on reviews for adoption and are less willing to test new products, to drive their early adoption and aggregate takeoff.
Read the authors’ slides for sharing this material in your classroom.
From: Helen Si Wang, Charles Noble, Darren Dahl, and Sungho Park, “Successfully Communicating a Co-Created Innovation,” Journal of Marketing, 83 (July).
Go to the Journal of Marketing
Helen Si Wang is Assistant Professor of Marketing, Marketing Department, Faculty of Business and Economics, University of Hong Kong, China.
Charles H. Noble is Henry Professor of Business, Associate Dean for Research and Faculty, Haslam College of Business, University of Tennessee.
Darren W. Dahl is BC Innovation Council Professor, Senior Associate Dean, and Director, Robert H. Lee Graduate School, Sauder School of Business, University of British Columbia, Canada.
Sungho Park is Associate Professor of Marketing, W. P. Carey School of Business, Arizona State University.