May 2006 | While a select number of companies is cautiously experimenting with CUSTOMER-MADE projects, the opportunities represented

by the co-creation trend are becoming more massive every day. So here’s Part 3 of what is still the biggest, most promising trend in the world of business. Really! Our next Trend Briefing, covering the YOUNIVERSAL BRANDING trend, will be online on 5 June 2006. Please don't forget to tell your friends and colleagues — much appreciated!

CUSTOMER-MADE: time to tap into THE GLOBAL BRAIN!

Let’s get this out of the way once and for all: trends are not one-off coining affairs. Some trends are worth tracking for years and years, especially if they represent a radically new definition of what constitutes value to consumers. INFOLUST is one

of them. So is GENERATION C. And from a business and innovation angle, we’d like to argue that the CUSTOMER-MADE trend, co-creating with your customers, is the most important one to watch. Not because everything has to or will be cocreated in the future, but because tapping into the collective experiences, skills and ingenuity of hundreds of millions of consumers around the world is a complete departure from the inward looking, producer- versus-consumer innovation model so common to corporations around the world. So here’s yet another CUSTOMER-MADE update, exactly one year after our last coverage, bringing you new insights and hands-on examples of firms already profiting from co-creating with their customers. But first, let’s start with a recap:

CUSTOMER-MADE: “The phenomenon of corporations creating goods, services and experiences in close cooperation with experienced and creative consumers, tapping into their intellectual capital, and in exchange giving them a direct say in (and rewarding them for) what actually gets produced, manufactured, developed, designed, serviced, or processed.”

Consider any or all of the following: • • • • Status: people love to be seen, love to show off their creative skills and thinking. Bespoke lifestyle: something consumers have been personally involved in should guarantee goods, services and experiences that are tailored to their needs. Cold hard cash: getting a well deserved reward or even a profit cut for helping a company develop The Next Big Thing is irresistible. Employment: in an almost ironic twist, CUSTOMER-MADE is turning out to be a great vehicle for finding employment, as it helps companies recruit their next in-house designer, guerrilla advertising agency or brilliant strategist. Fun and involvement: there's pleasure and satisfaction to be derived from making and creating, especially if co-creating with brands one loves, likes or at least feels empathy for?

It’s NOT plain feedback without an answer, it's not Do-It-Yourself, it's not customization, it's not even personalization, as all of these actions take place after companies have decided what the basics are, which products and services and experiences they're willing to hand over to consumers. Case in point: consumer voting campaigns like onvotetouspourdanette.com or straightupflavor.com. Sure, they're fun, but at the same time have a hopelessly tired feel to them. Once true CUSTOMER-MADE becomes the norm, it should be the companies voting for whatever consumers choose to submit!

For decades, consumers have been saving up their insights and rants about the stuff they consume, simply because they didn't have adequate means to interact with companies, or with other consumers for that matter. No longer. These fickle, wired, empowered, infolusty, opinionated and experienced holders of a MC (Master of Consumerism) are getting used to 'having it their way', in ANY way imaginable, which includes wanting to have direct influence on what companies develop and produce for them. It certainly helps that these same consumers are also part of GENERATION C: they're creative and increasingly have access to professional hardware, software, and online distribution channels to show (and dictate) companies what it is they expect from them, using text, sound, picture and video in ever more powerful ways. Add to GEN C the millions of lead users, early adopters, brilliant business professionals dying to give you a piece of their mind, and you’ll end up with THE GLOBAL BRAIN, waiting for you to tap into its experiences and skills. More on THE GLOBAL BRAIN in a future Briefing, but you probably get the picture: your brand's Next Great Idea could come from Sao Paulo or Singapore, if you open up your corporate fortress to smart individuals from around the world. If you don't, someone else surely will.

Virtually every brand these days seems to be inviting their customers to contribute to their next advertising campaign. If you believe that this is proof that co-creation is in fact an established trend, think again. Sure, recent examples like L’Oreal’s You Make The Commercial, FireFox’s Flicks, MasterCard’s Write a Priceless Ad, JetBlue’s Travel Stories and McDonalds’ Global Casting are good fun (hell, if consumers really like your brand, they don’t even need a contest, as illustrated by these cool, unofficial American Apparel ads), but while getting some of your customers involved at a tactical marketing level is better than nothing, it doesn’t touch upon the truly massive opportunities that the CUSTOMER-MADE trend has to offer when you move beyond advertising: from product development to open-conversation feedback schemes:

The easiest way for brands to dip their toes into CUSTOMER-MADE and tap THE GLOBAL BRAIN is to announce product or service development contests, open to consumers from around the world. Let’s start with some CUSTOMER-MADE contests held since our last update: they go beyond the usual ‘send-us-your-product-idea-and-win-a-voucher-for-a-free-icecream-and-don’t-expect-us-to-actually-do-something-with-it’:

The Nokia Concept Lounge took place in summer 2005 (some brands DO get it, and surprisingly it's often the brands that already have a strong competence in design or product development: ;-), but we thought the initiative was too well executed to not mention in this update. The lounge invited designers in the Benelux to share ideas and design the next new cool phone. Not surprisingly, in a GLOBAL BRAIN world, entries came from all over, with the winner being a Turkish designer, Tamer Nakisci. His wrist-band style phone (the 'Nokia 888') must have had phone manufacturers from China to Finland drooling.

What goes for phones, also goes for coffee. Nespresso’s 2005 Design Contest aimed at imagining the future of coffee rituals, yielded gems like the Nespresso InCar coffee machine and the Nespresso Chipcard (which stores coffee preferences for registered individuals, and when inserted into a vending machine, communicates with a central database to brew a personalised cup of coffee). Pictures of the winning concepts can be found at gizmag.co.uk/go/5493/gallery. Do check out the Illy Design contest too, as featured in our previous update.

Hang plastic/flexible magnifying glasses from shelving units, making it easier for senior citizens and visually impaired people to read production information. End of last year, Dutch supermarket chain Albert Heijn did something sensible: instead of installing suggestion boxes that customers don't use and stores don't empty, they asked customers for detailed feedback on how to improve their stores, through websites, leaflets and billboards. More than 55,000 customers took the bait, commenting on service, assortment and convenience levels in over 700 stores in The Netherlands. 700 submitters of ‘Golden Tips’ (which are online for all to see) won one-minute shopping sprees, with individual stores committing to implement suggestions as soon as possible.

More design: the Electrolux Design Lab 2005 attracted entries from 3,058 (!) design students from 88 countries around the world, the top six countries being the US, the UK, China, India, Brazil and Italy. (GLOBAL BRAIN, anyone?). Participants were asked to design household appliances for the year 2020. Twelve finalists participated in a six-day design event in Stockholm, including workshops, model building and a competition for cash-awards, appliances and more (click here for pictures of the winning concepts). The competition’s registration process was run via Designboom, an industrial design community. A smart move, as CUSTOMER-MADE isn't always about involving hundreds of millions of contributors. There's no harm in targeting relevant pockets of expertise if you're inviting others to co-create something specific (for open conversation schemes, see further down below). More to come: the theme for the new Electrolux DesignLab 2006 is “Healthy Eating Habits in 2016”, asking for product ideas for food preservation and preparation.

What about automotive? You may remember our earlier coverage of Peugeot’s worldwide, bi-annual Concours Design which netted Peugeot the Moovie, a twoseat electric concept car designed by André Costa. The next contest will start this August, no doubt attracting an even more global crowd. Other car brands: get moving!

TV isn't exempt, either: The L-Word Fanisode competition called for co-creating an episode of the hit television show, assembling a full script, scene by scene. The contest ran from January - March 2006, with the show's real (paid) writers outlining a scene and giving guidance, giving fans about a week per scene to submit offerings, peruse others people's submissions, and vote. The grand prize winner got a script-writing session with L Word creator Ilene Chaiken and USD 2,000 credit at Saks Fifth Avenue. (Source: BusinessWeek.)

Stylish Japanese purveyor of all things minimalist Muji is also launching an international design competition, which is about to start, well, now. Calling on the entire GLOBAL BRAIN, Muji’s first theme is “SUMI”, (corner / edge / end). From the site’s briefing: “The objective is not to design something that is placed in the middle of the room, but towards the edges, not at the centre and not directly around the centre; you should look for somewhere that evades the eye, send us an object designed for that place, and name it as you wish. We are not asking for any particular genre, it could be anything from furniture, stationery and office equipment, to everyday items.” Just like aforementioned Nespresso, winners will be announced at the Milan Salone. Let’s see which CUSTOMER-MADE product pops up in Muji stores from Tokyo to London next year?

All of the examples above are a great way to really get started with CUSTOMERMADE. But only a few companies have truly integrated this way of thinking into everything they do. One of the leaders in integrating CUSTOMER-MADE into its corporate fabric, P&G, is not slowing down: its Connect + Develop program and other innovation projects now produce more than 35% of the company’s innovations. In fact, R&D productivity at Procter & Gamble has increased by nearly 60%. In the past two years, P&G launched more than 100 new products for which some aspect of development came from outside the company. Among P&G’s most successful connect-and-develop products to hit the market are Olay Regenerist, Swiffer Dusters, the Crest SpinBrush, and the Mr. Clean Magic Eraser (source: HBR, March 2006).

P&G also recently rebranded its Tremor Moms program to Vocalpoint. In their own words: ‘’Vocalpoint is a unique marketing brand powered by the Procter & Gamble Company that helps companies do a better job developing products and services that moms care about and want to talk about. We work with this influential group of moms to help companies in industries that include entertainment, fashion, music, food and beauty. We collect feedback and generate valuable knowledge and insight for our clients through surveys, product sampling and previews of products and services.” P&G as the champion of CUSTOMER-MADE, to the point of selling its co-creation expertise to others. Not bad.

What works for FMCG works for tech and appliances as well: Philips-owned LeadUsers.nl has just completed its second lead user centric project, which was all about discussing the quality of sleep. The site has been active since August 2005, and aims to bring together lead users (those consumers that face the needs that will be general in the marketplace, but face them months or years ahead of the rest of the marketplace, and are positioned to benefit significantly by obtaining a solution to those needs) to discuss various topics of interest to both Philips and participants. The first topic of discussion and research was video telephony: a number of participants received the latest in video telephony equipment to be tested at home. A new topic will be announced shortly. The website will give you some good cues for setting up your own lead users community, so sign up!

Moving past contests and gifts, this is where it gets really interesting: co-creators receiving a cut of whatever gets developed based on their input, suggestions, design or ideas. Check out:

“Jetzt ist Ihre Kreativität gefragt!“ Austrian manufacturer Frenkenburger recently asked customers to come up with new flavours for its all natural hemp milk drink, Trinkhanf. Plain hemp milk is highly nutritious but tastes bland, so Frenkenburger previously launched mango/ginger, cocoa/vanilla/maple and coffee-flavoured varieties. To further expand the Trinkhanf line, Frenkenburger challenged creative customers to create tasty new flavours using fruits, herbs, or other natural ingredients. A panel of judges is now in the process of picking a winner, and the winning recipe will go into production. Aware that co-creators should share in profits, Frenkenburger will pay the winner one euro-cent per bottle sold. Granted, that's not exactly spectacular, but it beats a 25 dollar voucher ;-)

Another example of create and sell: LEGO’s LEGO Factory has been around for a while, but it remains an inspiring example of how to truly unleash THE GLOBAL BRAIN. Children and other building enthusiasts visiting the site are invited to design models (using easy to use, free downloadable software) and take part in competitions for LEGO prizes. A popular contest last year entitled winners to have their model mass produced and sold in Shop@Home, receiving a 5% royalty on each set sold. While customers can still upload their creations and have them become part of Lego’s official catalogue, the royalty scheme sadly has been nixed. Bring it back!

More CUSTOMER-MADE beverage innovation! Danish Vores Øl (‘Our Beer’) claims to be the world's first open-source beer. The recipe and the entire brand is published under a Creative Commons license, meaning that anyone can use Vores Øl's recipe to brew the beer or to create a derivative. As long as home brewers publish the recipe under the same license, they’re free to make money from their efforts, which includes free access to Vores Øl’s design and branding elements. Cheers!

Let's not forget CUSTOMER-MADE as an ongoing conversation, in many ways the Holy Grail of marketing. Think companies not just staging contests or asking for themed, detailed suggestions, but really hopping on the Cluetrain Manifesto. The following examples are a start...

In the UK, Orange has set up Talking Point, where customers can tell Orange how they feel about all sorts of things - not just phones. Orange promises to listen, and to use the info to shape the way they think about and do things in the future. A number of questions (like “what in your life would you like to see technology improve?”) make it easier for visitors to share their thoughts. This isn't really a sparkling conversation, but it's better than nothing, in what is still very much a oneway arena.

From April to October 2005, Itaú, Brazil's largest bank, launched a campaign titled "O Itaú quer ouvir você" , which means (how refreshing!) "Itaú wants to listen to you". Through a massive ad campaign, and by using channels such as dedicated 0800 numbers, e-mail, and online chats, employees at their banks, and actual telephones at ATMs, Itaú went far beyond the usual concept of suggestion boxes.

They even promised to get back to participants in five working days, commenting on suggestions made. First results: an average of 7.200 requests, complaints, and suggestions per month.

Equally laudable, Honda UK is sponsoring a new blog network, 2TalkAbout.com, that lets audiences publish their views on well-known brands as well as respond to other people's views. The motor company is the first brand to associate itself with the network: the site, called 2TalkAbout Honda is aimed at anyone with an interest in Honda cars, especially the newly introduced Honda Civic, and was launched as the new model was unveiled at the Geneva Motorshow. Although the online community will be completely independent from Honda, Honda engineers and associates will regularly log on to contribute to and respond to feedback, giving users direct access to the brand. (Source: Revolution.) Honda of course realises that it's better to participate than stand on the sidelines: online discussions on how to improve YOUR brand already are, or will soon be, everywhere. Witness the following:

To get a taste of how third parties are increasingly doing what brands themselves neglect to capitalise on, check out the highly informative, and often brutal, ‘How Would You Change or Improve’ topics that Engadget.com ("a web magazine with obsessive daily coverage of everything new in gadgets and consumer electronics") has been running. Their most recent one was for the Xbox 360. Other brands and services so far have included Tivo, Gmail, Skype, Creative Zen Vision, iPod video, Sony Ericsson W800, iPod nano, the Mighty Mouse, Google Talk, Motorola ROKR

E1, Sony Ericsson P910, Electrolux Roomba, and the Mac Mini. This kind of aggregation of passionate lead users (we're talking consumers truly obsessed with gadgets here, who not only want to know about the latest, but also buy and use it) may yield your brand more insights and suggestions in a week than your innovation lab and market research department can come up with in a year! It should come as no surprise that the unsanctioned ‘How Would You Change’ theme is catching on with avid users: other sites, part of Weblog Inc, who also publish Engadget, are chiming in: • • • How would you change MySpace? How would you change Digg? How would you change Flickr?

And to add just one more industry to this Briefing: in the world of hospitality, a similar phenomenon can be found on FlyerTalk.com, a community for avid (and highly profitable!) business travellers. In fact, so many suggestions and complaints for and about major hotel chains were piling up on that site, that Starwood Hotels and Resorts seconded William Sanders, better known as the Starwood Lurker, to keep an eye on the forums, 8 hours a day. Since he openly started participating in November 2002, the Starwood Lurker has posted more than 11,000 replies, (which comes down to an average of more than 5 postings a day!), engaging in conversations with some of Starwood's most valuable customers. No word on how much money this has made Starwood, but we guess it's many times more than Mr. Sander's salary. Now, you could of course decide that all of the above is too much work, or too expensive, and ignore it... (Yes, even multi-billion dollar brands have told us that finding the 'budget' for dedicating just one full-time person to personally monitor the thousands of conversations about their brand would be a real challenge.) But in a review-driven, transparent world, the alternative to CUSTOMER-MADE is finding out about your customers' feedback, suggestions, and yes, anger, through publicly accessible name-them-and-shame-them websites: • • • • • Positive Fanatics (IKEA) Virgin Brand Netflix Fan Victoria’s Dirty Secret Scion Tribe

And so on! More on how to get started below, in the opportunities section.

Some thoughts and observations on how the CUSTOMER-MADE trend may evolve: a. The media world is CUSTOMERMADE's coal mine canary (thank you, Jeff Jarvis). We have deliberately avoided businesses that are completely by and for consumers, i.e. the usergenerated content revolution, as that is everywhere now, AND we spoke about it at length last year. But one more observation about citizen journalism in particular: it provides inspiration to any brand wanting to turn its customers into 'reporters', sending in findings, observations, and suggestions. And as the model is spreading like wildfire,* expect more consumers to 'get' and enjoy the concept. Citizen Journalism as the open innovation model of the future?

* (OhMyNews, the South Korean ‘citizen participatory journalism’ showcase, now boasts 700,000 daily readers and 41,000 citizen journalists, who receive USD 20 for a newsworthy piece, is going international, with a helpful USD 11 million investment from Softbank. Or check out South African www.reporter.co.za, which pays contributors 5 euros per accepted story.)

b. Money talks: as co-creators get smarter AND realise how much they're worth, expect kick-backs for co-created goods and services to go up. If you don't pay a fair share, talented members of THE GLOBAL BRAIN will take their business elsewhere. So why not turn an inevitable development into a strength, handsomely rewarding the next Golden Tip, and creating the first CUSTOMER-MADE millionaire? The PR value and goodwill alone will be worth many times more.

c. Intermediaries will reap riches: besides aforementioned 2TalkAbout.com, check out companies like Informative, Communispace, WaveMetrix, Buzzmetrics and MouthShut who are helping to kick-start and manage the conversation and cocreation processes between 'producer' and 'consumer'. With traditional brands shitscared to really open up to their customers, fearing the deluge of hitherto unanswered questions, complaints and suggestions, there's money in helping them get started in a controlled environment.

d. CUSTOMER-MADE will spread to non-businesses: politicians and citygovernments are latching on. In Queens, NY, assemblyman Jimmy Meng (DFlushing) is sponsoring a "Make Your Own Law" contest, inviting his constituents to write legislation with the promise that the best proposal will be introduced as a bill in Albany. (Source: Daily News.) Meanwhile, in Lewisham, UK, residents are helping to keep the southeast borough of London clean in CUSTOMER-MADE/LOCAL BRAIN style: after installing special software on their cameraphone, observant townspeople can snap a picture of graffiti or overflowing litter bins, enter location details, and send it to the local council. The picture is then posted on the council's website, and cleaning crews are sent to resolve the issue. Read more on this initiative on our sister-site Springwise New Business Ideas. And yes, this comes close to citizen journalism as well! e. THE GLOBAL BRAIN will grow and grow and grow: yes, capitalism is triumphant, but where some still see the incredible rise of the consumer society as a source of hundreds of millions of newly minted, free-spending consumers (in India, in China, in Brazil, in Russia, in Turkey, in Nigeria) purchasing finalised mass-goods, YOU of course are salivating over the thought of millions of freshly educated, highly informed, super ambitious professionals eager to join your global open-innovation team. ;-)

When condensed into keywords, the CUSTOMER-MADE trend is about innovation, which these days is the sole factor determining a company’s fortune or downfall. And as innovation CUSTOMER-MADE style implies the end of traditional producer/consumer relationships, implies letting go of control, and realising that the entire world could be your advisor, it also implies re-innovating innovation itself. Scary stuff for not-invented-here laggards, but heaven for those obsessed with truly involving smart consumers before they take their talent elsewhere.

If this reminds you of your current Innovation Team… So where on earth to begin? The many examples and insights above (together with our November 2004 and May 2005 overviews should provide you with a pretty solid starting point for your own brainstorming sessions, innovation summits, strategic away-days and what have you. Examples are useful to get inspired, and to convince other execs that this is really happening. And the insights and learnings are for you and your team who then have to develop a kick-ass strategy AND implement it. So, to get started, what's stopping you from setting up your own ipodlounge.com, hiltonlobby.com, virgincabin.com, ingcounter.com, saabbackseat.com, safewayaisles.com, samsungcall-in.com, or vodafoneconnection.com, and inviting your customers to engage in CUSTOMER-MADE goods, services and experiences? Are you ready to open up (even as an experiment) one strategy meeting, one design process, one brainstorming session to the millions of consumers who may have an expert opinion, insightful suggestion, new business

idea and so on, simply because they're your avid users, and, in the best case, biggest fans? Oh, and if fear of a deluge of complaints and requests is holding you back: remember the deluge is already happening behind your back, and that if YOU aren't listening to your smart, able customers, someone else definitely is! There are undoubtedly many other fears you may have, but there's a solution for every problem. Drop us an email if you're working on an interesting CUSTOMERMADE project, and we'll send you some additional 'CUSTOMER-MADE Fears and Solutions' findings. You learn, we learn. ;-) Furthermore, one trait that all of our trends have in common is that they seriously alter consumer expectations. Once they become accustomed to CUSTOMERMADE being an option, consumers will take even less kindly to corporations who don't communicate, who don't respond to feedback, who don't use open source, who don't act upon suggestions, who keep throwing new stuff over the wall, hoping someone will like it. It's time to open up! Email this trend to a friend >> (And yes, DO talk to us as well: trendwatching.com's founder Reinier Evers enjoys feedback, rants, praise and suggestions! Just email him at reinier@trendwatching.com.)

…is something we don’t know! But what we DO know is when our next Trend Briefing will be online: early June 2006, covering the YOUNIVERSAL BRANDING trend. Happy spotting!

Feel free to publish part or all of these trends at your convenience. As long as you properly name, credit and link the source, www.trendwatching.com, we're happy. If you're a journalist working on a trends-related article, check out our extensive Press page or request a quote: we'll do our best to make your deadline-dominated life easier.

trendwatching.com and its 8,000+ trend spotters scan the globe for emerging consumer trends. We report on our findings in free, opinionated Trend Briefings, turning our observations into trends like INSPERIENCES, TWINSUMER and GENERATION C. Our subscribers in 120+ countries use our trends to dream up new goods, services and experiences for (or with) their customers.