Earlier this week Tesco revealed it was developing the world’s first socially created wine – the ultimate example perhaps in how crowdsourcing helps new product development and generating huge press coverage as a result, especially since it will also benefit the community where the wine will come from. In fact it is just the latest in Tesco’s crowdsourcing efforts to involve its customers in the development and evolution of its products. Facebook fans are being asked to suggest the wine’s name and bottle design after narrowing down the choice of wine itself to five different options in June. Tesco has previously produced a new flavour for its Tesco Finest ice cream in the same way.

Deola Laniyan, account director at We Are Social who is working with Tesco on the launch, said it’s just one of a number of crowdsourcing projects the company has been involved with: “In the past we’ve also asked Marmite fans to help choose the packaging and flavour for a new variety, and recently worked with Kleenex to ask fans to design a new tissue box,” she says.

Consumers now expect to be heard and crowdsourcing is the perfect way of doing it – given it solicits opinions from such a wide range of interested parties – producing what the customer actually wants rather than what a business thinks they want. However Laniyan warns brands and retailers to keep control. “Moderation is clearly going to be important so you need to have a watertight process in place,” she says.

The idea of crowdsourcing has been around since 2006 but its popularity continues to grow thanks to its effectiveness. Speaking at the recent #SMWF Markus Maurer, social media consultant at Switzerland’s largest retailer Migros — a cooperative with more than 600 stores — discussed how core crowdsourcing was to his company.

The retailer developed a specialist platform Migipedia three years ago to allow its customers to rate or discuss products and suggest new ideas. “Over the two and half years we have had 15,000 ideas for a better Migros, and more than 130,000 product feedbacks,” said Maurer. The retailer has 13,000 of its 300,000 products on the platform.

Typically Migros will set its goal, define the questions within its community and then brainstorm with them. Once it has extracted the potential ideas it then begins the polling and testing process within the social community before full scale production begins before sale.

So what benefits does crowdsourcing offer?

1)  A wider pool of ideas

“With crowdsourcing you do things you wouldn’t normally do and get outside of the box thinking. You get ideas you would never get normally,” explained Maurer. He said that Migros had a registered user base of 30,000 on its Migipedia platform – “enough to get feedback that we can work with,” he said, whilst not being so overwhelming that moderation of the board became an issue. “When you listen you can learn a lot,” he said.

2)  A return to talking to the customer

At their heart retailers and brands have always talked to their customers but with growth comes an inevitable distancing from roots with new product development typically determined by small-scale focus groups who may not be reflective of the larger customer base. “Our founder started with four trucks and six products driving into the villages into the counties selling products so he was already in very close contact with our customers. We thought three years ago we needed to come back to that, and go to the platforms where people are and get in touch with them,” said Maurer.

3)  Faster and cheaper new product development

This direct contact with the customer allows more direct and faster feedback which meant products could be developed faster, and more importantly, more cheaply than previously. Maurer said that the main stages of crowdsourcing, that of brainstorming and evaluation of ideas took only a matter of 2-4 weeks at Migros with decisions made at specific workshops within hours. He cited the example of the retailer asking its fans what new flavour of cheese to make. “Within 24 hours the community suggested 500 new flavours. Altogether 1100 were posted,” he says. 4,323 customers voted in the final product selection process.

4)  Numerous ways to engage customers

Maurer said retailers and brands had a number of different options to engage customers. This could be active crowdsourcing where a brand or retailer asks questions or passive crowdsourcing where feedback is just monitored or it could be influencing the range of products through voting or polls such as for brand names or colour options.

5)  Instant reactions

One of the big benefits of engaging with customers in this manner is that retailers and brands can see customer dissatisfaction before it hurts – ie before it’s hit sales. Maurer recalled Migros’ switch of budget toilet roll manufacturer. “Suddenly we saw that the rating was dropping and we had only two stars. We had 480 negative feedback in only 10 days. In the old days, especially as a cooperative where it takes a while to get feedback into the headquarters, that would take a lot longer,” he said. The company’s crowdsourcing platform generates automatic reports alerting the product manager of problems. Within 20 days the company had taken the decision to switch back. ”What that means is we lose less money because in the old days we felt the feedback in terms of selling less of an item,” says Maurer.

6)  More engaged customers

Listening to customers also drives loyalty if customers feel their views and opinions are valued. At Migros the retailer actively promotes how it reacts to customer feedback by labelling products with stickers on products to say that it’s a product that has either been developed by customers or demanded by customers. “It’s important that we build a bridge into the stores and communicate that these products we sell are developed by customers or that customers have wished that we would bring those products back to the shelf,” he said.

7)  Brand ambassadors feed through to strong sales

And of course the latter feeds into less flops and increased sales. “All the involved people are co-creators of this product and feel quite connected to it so are the perfect ambassadors to promote that product,” said Maurer. Laniyan agrees: “Consumers feel more engaged with the product and have a vested interest in its success when they’ve been involved in its creation,” she says. And there are added benefits to: “It also raises awareness of a product way all the way through from inception to production, allowing the promotional timeline to be significantly extended,” she says.

8)  Ability to not only drive sales but change customer behaviour

However sales isn’t always the aim, according to Maurer. “It’s not always the goal to have high sales. It can be about getting people back eating something or buying something or bringing a product to a different group than normal,” he said citing the example of Migros attempting to bring young people back to buying marmalade by crowdsourcing to find a new flavour. Although sales weren’t phenomenal he said the project delivered on its aim of a new customer base.

9)  A re-ignition of interest in old lines

Similarly the trend of retro products has also been largely driven by retailers and brands listening or actively engaging with their customers on social media as to what products they would like to see come back. At Migros said the return of a retro ice-cream range become a best seller for the retailer – a result that took even Migros by surprise.  “Ask the people and you will have success,” said Maurer.

10) Great PR

And of course as we have seen with Tesco one of the biggest benefits of crowdsourcing comes in the value of PR. Maurer points out that’s not unusual for his company either. “You get good stories with every crowdsourced product. You have good content to bring onto your social channels and get a huge amount of press coverage,” he said.

Crowdsourcing Tips

Have a clear definition of the question

Have a clear goal – what do you want

Have a diverse community

Involve the community whether possible