The Global Brain & ‘Virtual Customer Environments’

It is no secret that customers form an important part of the Global Brain. Indeed, customers can be actively engaged in different aspects of innovation and value creation – from the design and development of new products and services to marketing and product support activities.

To tap into the innovative power of customers, in recent years, many companies (including Microsoft, BMW, Ducati, Volvo, and Nokia) have established ‘Virtual Customer Environments’ or VCEs – i.e. technology-based collaboration platforms that incorporate online discussion forums, wikis/blogs, virtual reality tools, and other such technologies to support customer contributions in ideation, design, development, testing, and marketing activities.

Over the last few years, I have been studying how companies can implement and manage such VCE-based initiatives that promote customer co-innovation and value co-creation. One of the interesting issues that I have found from my research work has been that customers’ experiences in such VCEs can have broader and more profound implications — particularly for customer relationship management.

In an article published in the Spring 2008 issue of the MIT Sloan Management Review, I discuss this issue in detail. Customers who have positive experience in VCEs tend to not only participate more in innovation activities but also develop more positive attitudes towards the product as well as the company. And, vice versa!

So what is the key message here? In pursuing VCE-based initiatives, companies should carefully select and implement a portfolio of strategies and practices to enhance positive customer experiences in VCEs, and thereby ensure favorable outcomes in terms of both innovation management and customer relationship management.

More importantly, managers should view their VCE initiatives as an integral part of their overall innovation and customer strategies. For more on this, read the article.

Comments

[darius]

Hello,
I've read lot of your articles about VCE and I found it very interesting and providing good insights. But nowadays there is different approaches for virtual customer involvement in new product development, for example, community based innovation, online brand communities, user innovation, VCE and etc. Is there any articles that distinguishes this approaches? And is there real differences in this approaches?
Best wishes

[Satish Nambisan]

Darius, thanks for your comment. I think all of the approaches you mentioned (online brand community, etc.) have some broad commonalities - they use some form of IT to embrace the customer (or user) as an innovation partner. The term I use in my articles, i.e. VCE, is meant to include all of these approaches. In the simplest form, VCE relates to online customer communities but it can also involve more sophisticated IT such as virtual prototyping tools, etc. to support customer involvement in product development.

So I guess the short answer to your question would be: there are only subtle differences between the various approaches, largely pertaining to the nature and scope of IT used in engaging with customers (either as individuals or as a community) in innovation activities.

[darius]

Thank you for your fast reply and informative answer, it really helped me to understand this bunch of different approaches.
But when I reviewed literature in VCE (and also other approaches), I found some facts, that virtual knowledge brokers is distinguished from VCE and it means that VCE is only that environments, that provided directly from the innovation company, not by the intermediary.
As you are only one VCE theory provider I am interested do you agree with this definition?

Other uncertainty is regarding decision makers. If group of companies collaborate in on online platform for particular product.
Pisano and Verganti (2008) in Harvard Business review defined four ways to collaborate, two of them was based on Hierarchical (Innovation mall, Elite circle) and other two on Flat (Innovation Community, Consortium) form. From my view I can make assumption that in VCE, forms of innovation where last decision is made by group of various stakeholders (flat) isn't included.
Best Regards
Darius