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When customers get clever: Managerial approaches to dealing with creative consumers


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Creative consumers (defined as customers who adapt, modify, or transform a proprietary offering) represent an intriguing paradox for business. On
one hand, they can signify a black hole for future revenue, with breach of copyright and intellectual property. On the other hand, they represent a gold mine of ideas and business opportunities. Central to business is the need to create and capture value, and creative consumers demand a shift in the mindsets and business models of how firms accomplish both. Based upon their attitude and action toward customer innovation, we develop a typology of firms’ stances toward creative consumers. We then consider the implications of the stances model for corporate strategy and
examine a three-step approach to dealing with creative consumers: awareness, analysis, and response.

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Transcript of "When customers get clever: Managerial approaches to dealing with creative consumers"

  1. 1. Business Horizons (2007) 50, 39 — 47 customers get clever: Managerial approachesto dealing with creative consumersPierre R. Berthon a, Leyland F. Pitt b,*, Ian McCarthy b, Steven M. Kates ba Bentley College, Waltham, MA 02452, USAb Segal Graduate School of Business, Simon Fraser University, Vancouver, BC, Canada V6B 5K3 KEYWORDS Abstract Creative consumers (defined as customers who adapt, modify, or Creative customers; transform a proprietary offering) represent an intriguing paradox for business. On Firm stance; one hand, they can signify a black hole for future revenue, with breach of copyright Strategic response; and intellectual property. On the other hand, they represent a gold mine of ideas and Diagnostics business opportunities. Central to business is the need to create and capture value, and creative consumers demand a shift in the mindsets and business models of how firms accomplish both. Based upon their attitude and action toward customer innovation, we develop a typology of firms’ stances toward creative consumers. We then consider the implications of the stances model for corporate strategy and examine a three-step approach to dealing with creative consumers: awareness, analysis, and response. D 2006 Kelley School of Business, Indiana University. All rights reserved.1. When customers get clever over the Internet for listening on mobile devices and personal computers. While the ideaWhat happens when customers get clever? What had been around since the year 2000, podcast-should a firm do when creative consumers start to ing really took off with the 2001 advent ofmodify products, hack code, and adjust services to Apple’s ubiquitous iPod. Yet, Apple was notori-suit themselves? The following examples illustrate ously slow in capitalizing on the phenomenon,the dilemmas managers face, and the very differ- perhaps fearful of the copyright and digitalent strategies firms employ in dealing with the property implications of its devices being usedphenomenon: to store and play content. It was not until mid- 2005 that Apple began to include podcasting! Podcasting is the distribution of audio or video software with its iPod products or make pod- files, such as radio programs or music videos, casts available on its iTunes website. To many iPod owners (and to fans of podcasting), it seemed that Apple had, at first, discouraged podcasting. At the very least, the company * Corresponding author. declined to comment on it in the early days of E-mail address: (L.F. Pitt). the phenomenon.0007-6813/$ - see front matter D 2006 Kelley School of Business, Indiana University. All rights reserved.doi:10.1016/j.bushor.2006.05.005
  2. 2. 40 P.R. Berthon et al.!A member of the creative set, pink-haired tions range from a simple early ignoring, to a threat computer developer Jose Avila made furniture of legal action, to a begrudging condescension, to for his apartment exclusively from Federal an active embracing of customer creativity. So Express boxes. When the Tempe, Arizona-based what is a firm to do? creator displayed pictures of the furniture on his In this article, we explore the issue of creative website (, however, consumers, those customers who adapt, modify, or the shipping firm promptly overnighted a cease transform a proprietary offering. They represent an and desist letter demanding that Avila take down intriguing paradox for business. On one front, they the website (Morrissey, 2005). While the request can represent a black hole for future revenue. was honored, consumer comments on weblogs Breach of copyright is rife, and the notion of persist: bThis really brightened my day! The intellectual property is often treated with cavalier letters are classic lawyer exchange. My husband disregard. There is also the distinct possibility that and I laughed and laughed. Lawyers jousting at customers who meddle with proprietary products windmills...Q and bFedEx needs to lighten up. can produce something truly dangerous! On the Jose is a bright and innovative young man, and other hand, creative consumers can be a gold mine instead of making his life miserable, they should of ideas and business prospects, as customers give him a great job. With his kind of thinking, identify opportunities and implementations that he can only improve the company....the first become sources of revenue, apart from being thing he should do is fire the lawyersQ (http:// significant improvements. The modern business environment provides un- ec.html). precedented opportunities for customers to get! Ron Gremban’s car looks like a typical Toyota clever. The Internet permits the rapid dissemina- Prius hybrid, but in its trunk an additional stack tion and communication of customer innovations. of 18 brick-sized batteries boosts the car’s Hobby programmers delight in improvising and already high mileage with an extra electrical improving carefully written code. Modular prod- charge so it can burn even less fuel. An electrical ucts, which embody high levels of reconfigurability, engineer and committed environmentalist, and inexpensive hardware (particularly in the form Gremban spent several months and $3000 tin- of computer chips and storage media) enable kering with his car. The additional batteries let enthusiasts to tinker with technologies. Businesses him store extra power by plugging the car into a need to both create and capture value. The wall outlet at his home, all for about 25 cents. dilemma is that creative consumers demand a shift Although the Toyota Motor Corporation initially in the managerial mindsets and business models of frowned on people altering their cars, the how firms accomplish these two feats. We provide a company now says it may be able to learn from framework for thinking about the phenomenon, such individuals. bThey’re like the hot rodders of which also enables managers to identify their own yesterday who did everything to soup up their corporate stance toward customer creativity, in cars. It was all about horsepower and bling- order to be able to develop strategies for dealing bling, lots of chrome and accessories,Q said Cindy with this. Knight, a Toyota spokeswoman (Molloy, 2005).! In an attempt to create cool new things, the BBC is giving web developers and designers outside 2. Clever customers are not lead users the organization access to its content. Called, this initiative gives people We define the creative consumer as an individual who create computer programs, applications, or or group who adapts, modifies, or transforms a graphics the chance to put their stamp on BBC proprietary offering, such as a product or service. digital content. While the beta stage project is As a phenomenon, the creative consumer has a only informal at the moment, it aims to drum up long and illustrious history; indeed, it is as old as interest and proposals for prototypes. Launched products and services themselves. The automobile in the summer of 2005, it has already garnered serves as an excellent example of a product that, significant interest ( since its inception, has existed in a generally hi/technology/4538111.stm). symbiotic relationship with creative consumers. The early Model T Ford was regularly adapted by These cases represent four different kinds of farmers as a power source for driving generators,customer initiatives in four very different indus- mills, and lathes. In the 1960s, motor racing teamtries, and four different corporate responses to BRM modified a jet engine to power a successfulcustomer inventiveness. The organizations’ reac- Le Mans racecar; today, thousands of dpetrol
  3. 3. When customers get clever: Managerial approaches to dealing with creative consumers 41headsT reprogram the engine management chips (1) Creative consumers work with all types ofon their turbo cars to extract (sometimes fatal) offerings, not just novel or enhanced productsamounts of extra horsepower! While the phenom- (the focus of the lead user). Creative consum-enon of the creative consumer is old, it has ers sometimes work with old, and even thereceived somewhat limited inspection by research- simplest, de-featured products. For example,ers and business leaders. Only recently has it although Apple ceased production of itsbegun to gain attention in the serious manage- unsuccessful Newton PDA in the mid-1990s,ment literature. For example, Mollick (2005) there still exists today an active communityrefers to creative consumers as bunderground that continues to find ways to change theinnovatorsQ (p. 21). While the author provides an product’s functionality, write software for it,excellent framework by which to understand and and share their observations and experiencescategorize these individuals, he leaves the reader with others (Muniz & Schau, 2005).guessing concerning what management should do (2) Creative consumers do not necessarily faceabout creative consumers, apart from encouraging needs that will become general; rather, theythem. often work on personal interests that can The related concept of dlead userT has been the remain personal, or expand in use to a subsetprimary focus of management and researcher of users. For example, consumers who useattention. The notion of the lead user was devel- their car alternators to generate electricityoped some 20 years ago by von Hippel (1986), who for their homes are likely to remain a minoritydefined them as users whose current strong needs subset! Indeed, the notion of dwill becomewill become general in a marketplace months or generalT is potentially a major problem foryears in the future. Since lead users often try to managers working with lead users; managersfulfill the need they experience, they can provide have to identify those users they think willnew product concept and design data, as well. In encounter needs that will become general.totality, the lead user is (1) a user of a novel or They also need to monitor and act upon theenhanced product who (2) faces needs that will be exploits and advice of these users, whilegeneral in a marketplace, but faces them months or noting that lead users can all too oftenyears before the bulk of that marketplace encoun- mislead, a point well articulated in the workters them, and who (3) is positioned to benefit of Christensen and Bower (1996) and Chris-significantly from obtaining a solution (von Hippel, tensen (1997). Moreover, creative consumers1986, 2005). often innovate from a love of experimentation There has been a significant stream of research and creativity, not to solve some specificinto these specific types of customers, directed at need. In other words, while a creative con-identifying lead users (Urban & von Hippel, 1988); sumer’s innovation can fulfill instrumentalincorporating them into product design research needs, it (the innovation) is not necessarilyand gathering and analyzing their data (von Hippel, driven by a need.1989); comparing the lead user approach to more (3) Creative consumers need not benefit directlytraditional new product development techniques from their innovations, although they may(Herstatt & von Hippel, 1992); the characteristics obviously benefit indirectly through thanks,of innovation, innovators, and innovation sharing in peer recognition, and so forth. This is oftenlead user environments (Morrison, Roberts, & von referred to as bsymbolic capitalQ (Bourdieu,Hippel, 2000); performance assessment of the lead 1977). Conversely to economic capital, theuser approach (Lilien, Morrison, Searls, Sonnack, & more one dgives away,T the more symbolicvon Hippel, 2002); and the development of a capital one accumulates in the form of pres-construct of dlead usership,T defined as dleading tige, status, and reputation. BMW now gathersedge statusT (Morrison, Roberts, & Midgley, 2004). the ideas of its customers and invites the mostThere have also been reports in the practitioner inspired among them to meet with its engi-press of how the lead user approach is structured neers in Munich on a regular basis. Joergand applied in eminent firms, such as Johnson & Reimann, the firm’s marketing innovationJohnson (Luthje & Herstatt, 2004) and 3M (von management head, is quoted as saying, bTheyHippel, Thomke, & Sonnack, 1999). were so happy to be invited by us, and that our It is important to note, however, that the two technical experts were interested in theirterms dcreative consumerT and dlead userT are far ideas. They didn’t want any moneyQ (bThe Risefrom synonymous. If we compare and contrast the of the Creative Consumer,Q 2005, p. 75). Othersconcepts of creative consumer and lead user, the may be the primary beneficiaries; this processfollowing four observations can be made: can be conscious (a consumer adapts or
  4. 4. 42 P.R. Berthon et al. modifies a product for the benefit of another tion. In short, creative consumers represent an consumer or group) or serendipitous (a important and overlooked group. The reasons for consumer, while playing around with a prod- treating them strategically include: uct, produces a modification, which is adop- ted by other consumers). The open source (1) They exist, and are here to stay. As the software community is replete with exam- technology in products becomes more and ples. For instance, volunteers have created a more digitized, atomized, and interco- very viable alternative to Microsoft Windows nnected, the potential for consumers to re- in the operating system Linux, with no program, adapt, modify, and transform personal reward other than the kudos of offerings also becomes greater. In simple friends and users, and, of course, the chal- terms, this phenomenon is growing and will lenge of solving a problem. continue to grow. (4) Firms tend to use a formal and disciplined (2) Creative consumers are a rich source of process to find, screen, and select lead users. innovation; indeed, they are a hothouse of For example, von Hippel et al. (1999) describe imaginative ideas that the firm might not how 3M involved many medical specialists in have the resources or the time to cultivate by different environments, in a strict four-stage itself. They offer an alternative to formal process to develop a new disposable surgical product development programs, which survey draping product. In contrast, creative con- consumer needs and preferences, and then sumers rarely ask permission to experiment design and manufacture corresponding prod- with a firmTs offering, and critically it is they uct offerings. Creative consumers will simply who select the product, the firm, and the innovate for firms, but are unlikely to tell innovation. They certainly do not observe a them about it. Thus, the challenge for firms formal process. Whereas the firm remains in involves recognizing that creative consumers control with lead users, the situation is exist, identifying their actions, and under- reversed with creative consumers; this lack standing how to capture and create value of control over the creative consumer can from them. Ignoring or mismanaging creative represent major challenges to some firms. consumers can lead to failure. At the very least, it may give customers the impression Lead users garnered managerial attention in the that what they say and do does not matter to1970s and 1980s because they were seen as a viable the firm. At a more serious level, the firm maymeans of reducing the risks and costs involved in lose out on innovative ideas and the revenuesnew product development. The creative consumer these can represent. At worst, firms couldphenomenon has only been given attention more find that competitors do identify and exploitrecently because a confluence of factors has the innovations that customers develop on thepushed it to the fore. These factors include the firm’s offerings.advent of the Internet, which allows connections (3) Recognizing and utilizing creative consumersbetween creative consumers and dissemination of is a form of outsourcing, whereby the processtheir ideas; the programmability and malleability of new product development is informallyof software and components which have evolved in contracted out to the market. In a self-the last two decades; and an overall cultural shift governing manner, this enterprise is able totoward customization and individualization (Pep- extend the life cycles of existing products bypers & Rogers, 1993). overcoming the boundary between design While creative consumers and lead users are two production and design consumption. The costdistinct groups of customers, there is potential for benefits are potentially much better than din-an overlap between them, especially when man- houseT innovation, but a significant risk isagement incorporates and adapts their ideas into posed in that the R&D is done in public.offerings. Creative consumers are generally more Therefore, without appropriate processes fordifficult to manage, because their innovations tend capturing value from creative consumers,to be more idiosyncratic and stochastic than lead there is no guarantee that the firm thatuser efforts, which are more focused and controlled originally developed the product will be theby the firm. Moreover, creative consumers are one that can successfully appropriate theusually independent of the organization. Lead value created by the creative consumer.users, on the other hand, are contacted by, There exists a substantial risk that compet-communicated to, and the process of their inter- itors might be able to capitalize on theaction with the firm controlled by, the organiza- opportunities identified by creative consum-
  5. 5. When customers get clever: Managerial approaches to dealing with creative consumers 43 ers. That alone might be reason enough for users alone does not provide comprehensive the firm not to ignore the phenomenon. answers to firms that wish to become aware of consumer creativity, to develop a stance toward it, and to be able to formulate and implement action3. Consumer creativity does not equal plans regarding it. Similarly, the study of consumercreative consumers creativity by marketing psychologists, mostly in laboratory settings using student samples, yieldsConsumer researchers have certainly not ignored many important insights into what motivates con-customer creativity; indeed, they have defined it sumer creativity and the environmental conditionsand identified its traits, antecedents, and conse- that enhance it. The work, however, is not thatquences. The problem is that almost all of the helpful to practicing managers. It certainly doesresearch has been done at a conceptual level. not tell them what to do about creative consumers.While this is laudable from a scholarly perspective, Having defined and established the importance ofit tells managers little about how customers tinker the creative consumer, we now go on to explore thewith their products and what happens as a result. It stances that firms adopt toward to this importantalso gives them very little advice about what they group; stances which, as we will see, range fromshould do. dConsumer creativityT (the study of non-management, to mismanagement, to proactiveconsumer problem solving and creativity traits) management.and dcreative consumersT (the reality of howconsumers adapt, modify, or transform proprietaryofferings) are related but still very different 4. Stances: Of Treks and Warsphenomena. There is a strong stream of research in the The two landmark stars of modern-day scienceconsumer behavior literature that has focused on fiction, Star Trek and Star Wars, provide contrast-consumer creativity. This work was pioneered by ing examples of how organizations deal with theHirschman (1980, 1983), who defined consumer problems and dilemmas posed by creative consum-creativity as the problem-solving capability that ers, those customers who want to get a little toomay be applied toward consumption-related prob- involved for comfort. Star Trek (which started as alems. The focus of consumer researchers has television series) and Star Wars (the ongoing movietended to be on the behavioral traits of creative saga) have both had a major impact on contempo-consumers, and especially the factors that influ- rary culture. Yet, one is languishing while the otherence the process of consumer creativity. For thrives (Borland, 2005).example, Moreau and Dahl (2005) have studied, in Star Trek’s battalions of fans saw the Internet as aan experimental setting, how input and time wonderful galaxy in which to indulge their love ofconstraints influence the way in which consumers the show, its icons, and legends. They built web-process information during a creative task and how sites, published online stories, and created andthose processes, in turn, influence the creativity of distributed amateur movies based on the Star Trekthe solution. Also using experiments, Burroughs and mythology and characters. In response, Star Trek’sMick (2004) have investigated the antecedents and copyright owner, Viacom, vigorously pursued theseconsequences of creativity in a consumption con- fans by releasing warning statements in the press,text. The authors find that both situational factors issuing legal writs, and closing down websites.(i.e., time constraints, situational involvement) Viacom was determined to protect and control itsand person factors (i.e., locus of control, meta- intellectual property at all costs, and it seems thephoric thinking ability) affect creative consump- company has succeeded more than it might havetion, and that there is also interaction between intended. In 2006, for the first time in over 20 years,these variables. These research efforts are laud- there will be no cinematic reprise for the Starshipable, yet they shed little light on what managers in Enterprise.firms should be doing to become aware of customer In managing the Star Wars franchise, Lucasfilmcreativity, how they should define their attitudes has preferred to tread a fine line between incor-toward it, and what actions they should take to porating creative fans and still controlling itseither encourage or discourage it. intellectual property through regulation. For ex- In summary, the important notion of lead users ample, a partnership with AtomFilms sponsors anhas received considerable research attention and official contest for independent filmmakers whoapplication in practice. However, while lead users create works based upon Star Wars. Further, Starand creative consumers have some things in Wars Galaxies, a massively popular multi-playercommon, they are not synonymous. Studying lead game presented as a venture between LucasArts
  6. 6. 44 P.R. Berthon et al.and Sony, permits the design team to solicit play- 5.1. Discourageers’ feedback. Thus, Lucasfilm both recognizes andattempts to manage consumer creativity. In the In ignoring the podcasting phenomenon in itshiatus between the culmination of the first trilogy infancy, Apple’s espoused policy was, very evident-of films and the second, more drawn-out, triplet of ly, one that did not welcome independent customermovies, the Star Wars fan base has burgeoned. For involvement in their offering. While the firm didthe franchise and its fans, the Force lives on. not choose to prosecute or to resort to legal means in its efforts to thwart innovative customer use of its products, Apple, in the early stages, did little to facilitate the practice. In all likelihood, this was5. Firms’ stances toward creative because the firm was still pondering the legalconsumers ramifications of using its iPod device to broadcast digital content. Subsequently, this position hasAs mentioned previously, firms adopt a range of evolved into a more proactive stance, with iPodstances toward creative consumers. Some see them players being shipped with legally approved pod-as threatening and try to prevent them from being casting subscriptions and downloads as part of theinnovative with their products; others see them as iTunes package. We refer to this first stance asan opportunity and actively facilitate consumers’ discourage. Under this stance, a firm’s attitudecreativity. In considering firms’ reactions to this toward consumer innovation is negative, but itsphenomenon, it is useful to differentiate using two actions are de facto passive. In this instance, firmsaxes: a firm’s attitude toward, and its action on, verbally berate consumer innovation but take noconsumer innovation. Attitude toward consumer overt action, which can range from ignorance, toinnovation is a firm’s espoused policy or philosophy reluctant tolerance, to an unreceptive internalregarding the phenomenon in principle; it can reaction. Discourage is the default or initial stancerange from positive to negative. The espoused for many firms, and examples are legion. Forphilosophy typically reflects the mental mindset instance, after Sony released the PSP (Portableof top management, but can also range from a Play Station) game player, consumers soon begansubtle form of politicking to poor organizational hacking the proprietary operating system so thatcommunication. Action on consumer innovation they could surf the Web, check emails, and runcomprises what a firm does once the phenomenon retro- and other non-proprietary games on thehas actually been detected. This can range from device. Sony’s reaction was swift condemnation,active to passive. but other than making crystal clear their attitude These two axes delineate a four-fold typology of toward the innovation, they took no further actionfirm postures to consumer innovation: discourage, (Hellweg, 2005). Similarly, hackers have turnedresist, encourage, and enable. The four stances are Nintendo’s Gameboy console into a computerizedillustrated with examples in Fig. 1, and are outlined musical instrument that can be used to playbelow. surprisingly complex music. Nintendo would not comment on the trend (Kushner, 2006). 5.2. Resist FedEx not only disapproved of Jose Avila’s furniture construction methods and materials, it acted directly by serving him with legal instructions to desist and take down his website. This is an example of what we term the resist stance. What distinguishes this stance from the discourage pos- ture is that, while the firm’s attitude toward consumer innovation is still negative, the firm’s responses are active. Thus, firms that adopt a resist stance verbally berate consumer innovation and back that sentiment up with punitive action. The firm actively seeks to minimize or eliminate consumer innovations. A long-established embodi- ment of resistance is invalidation of warrantee. In Figure 1 Firms’ stances toward creative consumers. the past, the Ford Motor Company refused to honor
  7. 7. When customers get clever: Managerial approaches to dealing with creative consumers 45warranties on vehicles that they suspected had toward consumer innovation, it differentiates itselfbeen adapted for alternative farming applications. in that the firm’s posture is overtly active. In thisMany Model T owners were farmers, who used the instance, firms cheer consumer innovation andpower of the car, transferred through the rear axle, back words with deeds to actively help consumersto drive small milling and threshing machines, and innovate with their products. This is very much aother agricultural equipment. Nowadays, as will be dhands-on,T positive approach to the phenomenon,seen in a later example, Ford is more open to one which can be seen amongst leaders in thecustomer creativity. From warrantee invalidation, gaming industry. Faced with consumers hacking intofirms then move on to taking proactive legal steps the encrypted software of their popular game,against innovating consumers. AiboPet is a rather Half-Life, Valve Software took the overt, positiveexpensive (around $2000) robot dog, marketed by action of releasing the code to the community. TheSony, which can perform a number of pre- result was the creation of Counter-Strike, the mostprogrammed tricks, such as following its owner played online game in the Internet’s historyaround and responding to voice commands. Sony (Hellweg, 2005). The Ford Motor Company alsoinitially sued consumers who had hacked the seems to have changed its stance since the days ofAiboPet operating system to make their cyberpets the Model T and is working with individuals such asdance, jive, and perform a wide host of Chip Foose, who enjoyed such success modifyingdunauthorizedT actions (Kohler, 2005). Ford Mustangs that he started his own business, Foose Design. Beyond being supported by Ford,5.3. Encourage Foose’s modified cars are displayed by the auto- maker at motor shows and are sold throughWhile Toyota was favorably disposed toward the selected Ford dealers (Sawyer, 2005).experimentation of Ron Gremban on his new Prius,the firm did nothing to actively assist him eitherfinancially or materially. It was content to sit on the 6. Which to choose?sidelines and observe. This third stance is theencourage position. Under this stance, the firm’s It would be ideal if there was done correctT stanceattitude toward consumer innovation is primarily in the matrix (see Fig. 1); that would make it simplepositive, but its actions are, again, de facto to follow and easy to implement. Like mostpassive. The firm verbally lauds and applauds important and complex issues in management,consumer innovation, but takes no overt action to however, there is no simple and easy solution.facilitate it. This stance is a positive but dhands-offT Rather than provide straightforward answers, theapproach to the phenomenon. Examples of the matrix should, instead, prompt a series of questionsencourage position are becoming increasingly com- that will require a firm to evaluate whether it hasmon. For instance, Skype, the Voice-Over Internet the appropriate stance for the set of environmentalProtocol (VOIP) pioneer, recently made it known circumstances under which it operates. Legal,that it was delighted with the innovation of branding, and strategic considerations will beSkypecasting, a synchronized combination of pod- paramount, as well as a consideration of thecasting and live VOIP broadcast. While Skype resources available.applauded this clever use of its service, the There may be good reasons to follow a discour-company has made no modifications to the soft- age stance. For example, when a firm is notware to facilitate and further encourage the positive toward a particular form of consumerphenomenon (Biever, 2005). creativity (perhaps for good reason) but wishes to avoid the bad publicity that acting like a bully5.4. Enable might cause, it can adopt a discourage posture. In situations in which the consequences of consumerWhen the BBC became aware that users were creativity could be more severe, however, the firmappropriating and employing its content, the might actively resist. It is not clear why FedEx hasorganization decided to follow classic words of resisted Jose Avila, and the publicity surroundingwisdom: If you can’t beat them, join them. Not the case has, indeed, made the firm appear to beonly did the BBC demonstrate its positive attitude tyrannical. It could be, though, that the firm simplyby making content freely available, it also actively wishes to avoid possible litigation that might resultfacilitated the use of this content through the from injuries caused by furniture that was notprovision of software and other tools. The fourth intended to serve that function. There are alsostance is enable. While the enable stance shares cases in which brand protection is paramount. Inwith the encourage stance a positive attitude the case of Mattel, Inc. versus Susanne Pitt, the
  8. 8. 46 P.R. Berthon et al.makers of the Barbie doll sued a woman who had link and join the network) into a series of closedtransformed a child’s toy into an adult parody: protocols (whereby outsiders were excluded andbDominatrix BarbieQ (Mattel, Inc. v. Pitt, 2002). membership was closed). Thus arose the bDarknetQFirms that follow the encourage stance might do so phenomenon, a burgeoning parallel universe ofbecause, while they support the process, they do invisible networks, of which the original protago-not wish to spoil the spontaneity of consumers’ nists of the P2P movement were idyllically igno-creativity efforts by getting too involved; rather, rant. The first task of management, therefore, isthey would prefer to observe passively and cheer to be aware. They may take the first step byfrom the sidelines. Finally, in the case of firms asking themselves: bAre consumers adapting ouradopting an enable stance, the intention is to offerings, and in what ways?Qengage and promote creative consumers as much Once managers are aware that their offeringsas possible, and to benefit from the innovations are being adapted by consumers, they shouldthat flow from this. analyze the phenomenon. This is where the matrix outlined in Fig. 1 is essential. Relevant questions the firm must ponder include: bWhat are the7. Capturing and creating value from implications for the firm?Q, bShould our attitudecreative consumers be positive or negative?Q, and bShould we pursue a hands-off approach or actively engage with theCreative consumers comprise a more general phenomenon?Qcategory of offering innovators than lead users. Finally, as soon as management is aware of theWhen creative consumers innovate, they either phenomenon and has analyzed it extensively, abenefit from their innovation in terms of new response is required. The response should befunctionality and new applications, or they simply unambiguous and send appropriate messages toenjoy the thrill and challenge of experimenting all stakeholders. Employees and shareholders willwith and altering a firm’s offerings. They do not want to know that while their intellectual capitalmerely buy and obediently use products or watch and other assets are being protected, they alsoother consumers struggle with product inadequa- would not run the risk that the firm will make acies. They have a curiosity that drives them to public relations fool of itself by antagonizing thebecome participants in the evolution and destiny of media and appearing to be an unfeeling bully. Thethe offering. Predicting and identifying creative public at large is entitled to having its concerns forconsumer activity may be difficult, but a typology safety considered by responsible management,based on possible firm stances and actions toward when technology tinkerers threaten to get out ofcustomer innovation can help in the diagnosis and hand. Creative customers might want to know whenformulation of strategy. What’s a firm to do? We their genuine efforts are rightfully applauded andsuggest three things: be aware, analyze, and appreciated. When their inventiveness is regardedrespond. as harmful and threatening, they also need to be informed in no uncertain terms of the consequen-7.1. Awareness, analysis, and response ces of their behavior.Ironically, many firms are blissfully unaware thatconsumers are modifying their products. Although, 8. Final thoughtswith the advent of the Internet, this ignorance isbecoming less common, it is still widespread. Traditionally, firms have paid little attention to theConsider, for example, P2P networks. Peer-to-peer phenomenon of creative consumers, but we pro-(or P2P) computer networks rely on the computing pose that this can no longer be the case. Thepower and bandwidth of the participants in the creative consumer is likely to be an increasinglynetwork, rather than concentrating it in a rela- important force for change and innovation in manytively low number of servers. Such networks are markets. Consequently, firms must enhance aware-useful for many purposes. Sharing content files ness of their creative consumers, analyze theircontaining audio, video, data, or anything in impact, and formulate an appropriate response. Wedigital format is very common; real-time data, have provided an initial framework for carrying outsuch as telephony traffic, is also passed using P2P this strategic analysis. As firms have varyingtechnology programs. Successor to Napster, the situational factors, strategies, and offerings, theirmusic file sharing program Kazaa was quickly response to creative consumers will also vary.adapted by enthusiasts to transform the open Managers should therefore recognize that Fig. 1 isprotocol (whereby anyone with the software could not a bone-size-fits-allQ set of four solutions, but
  9. 9. When customers get clever: Managerial approaches to dealing with creative consumers 47rather a framework for (1) understanding that Herstatt, C., & von Hippel, E. (1992). From experience:creative consumers exist, and (2) for developing Developing new product concepts via the lead user method: A case study in a dlow techT field. The Journal of Productan appropriate strategic response based on the Innovation Management, 9(3), 213 – 221.specifics of their context. Moreover, as technology, Hirschman, E. C. (1980). Innovativeness, novelty seeking, andmarkets, and consumers evolve, there is likely to consumer creativity. Journal of Consumer Research, 7(3),be a migration between stances. Responding to the 283-195. Hirschman, E. C. (1983). Consumer intelligence, creativity, andthreats and opportunities of creative consumers consciousness: Implications for consumer protection and edu-will require firms to manage a three-way fit cation. Journal of Public Policy & Marketing, 2(1), 153 – 170.between: Kohler, C. (2005, June 7). PSP hackers go retro. Wired. Retrieved from (1) A specific stance toward creative consumers; 0,2101,67742,00.html (2) The relative ability and desire of consumers to Kushner, D. (2006). Game Boy rock. Technology Review, 108(11), 32. adapt, modify, and transform their products; Lilien, G. L., Morrison, P. D., Searls, K., Sonnack, M., & von and Hippel, E. (2002). Performance assessment of the lead user (3) The firm’s ability to scan, track, and control idea-generation process for new product development. consumer-produced innovations. Management Science, 48(8), 1042 – 1059. Luthje, C., & Herstatt, C. (2004). The lead user method: An outline of empirical findings and issues for future research. Firms that are able to master this fit and R & D Management, 34(5), 553 – 568.proceed to collaborate with creative consumers Mattel, Inc. v. Pitt, 01-1864 LTS (S.D. NY 2002).will discover an innovation and marketing capabil- Mollick, E. (2005). Tapping into the underground. Sloan Man-ity that integrates consumers into their organiza- agement Review, 46(4), 21 – 24. Molloy, T. (2005, August 11). Engineers modify hybrid cars to gettion, one that presents enormous potential to up to 250 mpg. Associated Press. Retrieved from http://successfully co-develop and even share intellectual Moreau, C. P., & Dahl, D. W. (2005). Designing the solution: The impact of constraints on consumers’ creativity. Journal of Consumer Research, 32(1), 13 – 22. Morrison, P. D., Roberts, J. H., & Midgley, D. F. (2004). TheAcknowledgement nature of lead users and measurement of leading edge status. Research Policy, 33(2), 351 – 362.Leyland F. Pitt acknowledges the support of an Morrison, P. D., Roberts, J. H., & von Hippel, E. (2000). Determinants of user innovation and innovation sharing in aSSHRC Grant, 2005. local market. Management Science, 46(12), 1513 – 1527. Morrissey, B. (2005). Crowd control: Handing creative to the masses. Adweek, 46(37), 10. Muniz, A. M., Jr., & Schau, H. J. (2005). Religiosity in theReferences abandoned Apple Newton brand community. Journal of Consumer Research, 31(4), 737 – 747.Biever, C. (2005). Software killed the radio star. New Scientist, Peppers, D., & Rogers, M. (1993). One to one future. New York7 186(2495), 26. Currency.Borland, J. (2005, May 2). dStar WarsT and the fracas over fan Sawyer, C. A. (2005). Chip Foose: Humble genius. Automotive films. CNET Retrieved from Design & Production, 117(4), 38 – 41. com/Star+Wars+and+the+fracas+over+fan+films/2008-1008_ The rise of the creative consumer. (2005). The future of 3-5690595.html innovation. The Economist, 374(8417), 75.Bourdieu, P. (1977). Outline of a theory of practice. Cambridge, Urban, G. L., & von Hippel, E. (1988). Lead user analyses for the England7 Cambridge University Press. development of new industrial products. Management Sci-Burroughs, J. E., & Mick, D. G. (2004). Exploring antecedents and ence, 34(5), 569 – 582. consequences of consumer creativity in a problem-solving von Hippel, E. (1986). Lead users: A source of novel product context. Journal of Consumer Research, 31(2), 402 – 411. concepts. Management Science, 32(7), 791 – 805.Christensen, C. (1997). The innovator’s dilemma. Boston7 von Hippel, E. (1989). New product ideas from dlead usersT. Harvard Business School Press. Research Technology Management, 32(3), 24 – 27.Christensen, C., & Bower, J. (1996). Customer power, strategic von Hippel, E. (2005). Democratizing innovation. Cambridge, investment, and the failure of leading firms. Strategic MA7 MIT Press. Management Journal, 17(3), 197 – 218. von Hippel, E., Thomke, S., & Sonnack, M. (1999). CreatingHellweg, E. (2005, April 8). Will Sony crack down on PSP breakthroughs at 3M. Harvard Business Review, 77(5), 47 – 55. hacks? Technology Review. Retrieved from http://www. _ article.aspx?id=14351&ch= infotech