Q: Should every company establish a virtual community to benefit from user input?
Over 80% of high-tech firms listed in the S&P 500 have virtual communities that help generate user input (Mahr & Lievens, 2012). This may lead some managers to believe that a virtual community is a “must have” for their organization. This essay seeks to determine whether the statement “every company should establish a virtual community to benefit from user input” is accurate. This statement will be deconstructed into its component parts and the relevant portions debated through the use of selected readings.
First, the question asks whether this solution is appropriate for every company; this statement is understood to mean both high-tech as well as other industries. The ability to benefit from user input is not limited to high-tech; companies across many industries (including automotive, retail, and health care) engage with customers to obtain valuable knowledge for their innovations (Mahr & Lievens, 2012). One prominent example is LEGO™ – a company that develops physical products. This organization has an extensive user community that has contributed to product design and future development (Hienerth, Lettl, & Keinz, 2014). There is therefore potential for customer feedback to be more broadly applicable to various industries, and not limited to high-tech.
Second, the language is specific to the environment in which feedback is provided – it asks whether a virtual community should be established. Hienerth et al. (2014) identify the existence and importance of synergies that emerge from even more integrated ways of innovating,- ways that extend beyond bilateral interactions between individuals, communities, and firms. Virtual platforms are a cost effective means of collecting feedback, mainly due to the increase in digitalization and decrease in the costs of communication (Mahr & Lievens, 2012).
Third, it asks whether it is beneficial to obtain user input, but is non-specific to the type of user or the type of input. Customers represent a unique source of knowledge that cannot be obtained from other sources that can be critical for the success of new products and services (Prahalad & Ramaswamy, 2004); however, the literature suggests a preference for lead users. Unfortunately, lead users might not always be an appropriate source of knowledge, as these consumers possess a level of technical expertise and problem-solving persistence that ordinary users do not reach (Mahr & Lievens, 2012). Put bluntly, lead users may hinder the creation of some types of knowledge because of their differences from ordinary users (Magnusson, 2009;). Furthermore, customers’ needs are often unclear at the beginning of the development process and change continuously, which makes it impossible to establish them conclusively (Mahr & Lievens, 2012). So while much of the research suggests customers with lead user characteristics contribute to commercially successful products (von Hippel, 2005), other literature suggests it can harm innovativeness (Christensen, 1997). Pedrosa (2012) suggests that a threshold level of obtaining customer needs exists in each stage of the development process and once this has been reached, obtaining additional customer needs seems to hamper innovation efforts. As such, there is no clear answer as to which user is best to contact for insight.
Finally, the wording is specific as to who establishes the community – the company, not the user. Herneith et al. (2014) identify multiple benefits including the potential for breakthrough innovation, diversity of knowledge for problem solving, knowledge accumulation, user-to-user assistance, unpaid marketing efforts, and recruitment of lead users from community. Challenges included the lack of sustainable producer–user interaction, IP issues, loss of control, difficulties channeling creative activities of communities toward the producer firm, and that the overall process can be cost-intensive (Hienerth et al., 2014). So while there are potential benefits to a firm hosting a virtual community, there are additional drawbacks that may make this more difficult. The most significant advantage of being the owner and developer of the community, however, remains the ability to guide the cultural development and provide a clear communication of its purpose through various pages (e.g. “About Us” or “Participation Rules), as well as the ability to direct users with unrelated posts (e.g. assistance requests) to other communities (Mahr & Levens, 2012).
In short, the statements “every company should establish a virtual community to benefit from user input” is too generic to be useful. While every company can benefit from user input, not all user input is equal (e.g., ordinary user vs. lead user) and not all communities must be virtual. This is one of many options that are available to an organization; it is imperative that each firm determines the business case for implementing any company-led virtual communities and define the objective from the outset, to avoid implementation of solutions that are unsuitable to their environment and can cause grief amongst users. A preferable statement would be that “every company should investigate whether establishing a virtual community will enable the collection of valuable user input, in a financially sustainable manner.”
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