Jake Nickell and Jacob DeHart have made millions selling unique artistic T-shirts. The kicker is, they didn’t even design them. The duo owns Threadless, a profitable online community where users post T-shirt designs, vote on their favourites and then buy them. For coordinating the process, Inc. magazine figures Threadless earned $30 million in revenue last year.
Threadless is a success in a growing field where companies are tapping into consumer creativity to develop new products, says Darren Dahl, the Fred H. Siller Professor in Applied Marketing Research at the University of British Columbia’s Sauder School of Business. Companies as diverse as Jones Soda, Lego and Starbucks are building brand loyalty, along with their bottom line, through online communities where consumers interact, contribute and engage on a personal level with businesses and their products. Companies like Doritos and General Motors have even used customer ideas for successful Super Bowl commercials.
“Consumers want more of a role in the whole design process,” says Dahl. “The Internet makes it much easier for us all to have a voice and get involved.”
Knowing that businesses have benefited from inexpensive new ideas, customer loyalty and word-of-mouth advertising, Dahl wanted to look at what motivates consumers to get involved. Along with his frequent collaborator Page Moreau from the University of Colorado at Boulder, Dahl found that people receive greater and longer-lasting satisfaction from products they help design.
“When you make part of your life salient, it builds more meaning into that product,” says Moreau — an idea backed up by users of Threadless. “It wasn’t so much the money,” artist Glenn Jones told Inc. magazine after winning $150 for a design he submitted. “It was how cool it was to get your shirts printed.” He also found it satisfying to tell people about it.
Dahl, Moreau and others are using that knowledge to understand the most effective and ethical way for companies to work with consumers to make the next great product. “Consumers are taking on the role traditionally held by marketers,” says Moreau. “The business model is shifting. How is that going to affect consumers and businesses?”
To help answer this question, Dahl is interviewing people who have provided a number of ideas to Threadless-style social websites. “Basically, we’re psychologists,” he says. “We try to understand why they do it.” In a lab, he and his team have designed fake websites and monitored user reactions and feelings as wording, prizes and other factors were altered. Next, he will collaborate with real businesses to test his theories on the open Internet. “We will let websites run for a few months,” he says, “then tweak this or that to see the effect.”
Combining his work with related findings by colleagues like Moreau, Dahl will be able to advise organizations such as the Marketing Science Institute and individual businesses on techniques that work and, perhaps more important, on those that don’t. He also passes on his research results to his marketing students. “We’re building a living curriculum,” he says. “Business is never static. We want to make sure our students are able to play the game as well as anyone.”
In the end, this kind of research will also inform consumers of online privacy issues and will streamline the relationship between customers and business, which should ultimately produce more useful, successful products.
“Most organizations need to start thinking about incorporating consumers in their product development,” says Dahl. “If this process is used effectively, everyone is a winner.”