Crowdsourcing at Mervis Diamond Importers: A nice case of open innovation at a s small company with one big question

In a just published contribution on msnbc.com, Emma Johnson provides a good introduction into Crowdsourcing ("Free Problem-Solving for Your Biz: Tapping the masses for brighter ideas and bigger margins").

In the article, she brings the simple case of Mervis Diamond Importers, a small chain of jewelry stores in the Washington, D.C., area. This company employed crowdsourcing to generate a series of successful newspaper advertisements with the help of a crowdsourcing facilitator, Genius Rocket; a site is specialized on broadcasting ideas for ads. The description of this case is nothing special, but the questions Jonathan Mervis, the owner of the jewelry stores, asks at the end are very interesting:

For a $500 fee, Mervis sent out a query looking for one-line ad copy to accompany the front page of the local edition of satirical newspaper The Onion, which is popular with young adults. Genius Rocket publicized the contest, and Mervis spread the word through his company's blog and his own contacts.

The query netted more than 500 responses, many of which were outstanding, Mervis says. He personally read all of them and wrote checks to 10 entrants, which were "brilliant" and many of which are often quoted by customers in his store and strangers on the street.

Standouts include, "She likes the Beatles, but she loves the Stones," and "Conflict-free diamonds for a conflict-free bedroom."

"This doesn't even compare with working with my usual ad agency," Mervis says. "If I just sit down with my agency to discuss an ad in The Onion, it costs me $1,000 and it doesn't get me 500 options, it only gets me two or three. Often I don't really love those two or three, but I don't want to pay for more so I just go for it."

He says the return on investment is tough to calculate, but he plans to launch more crowdsourcing queries. The time and monetary investment were minimal, quality of responses phenomenal, and the ability to control the creative process rewarding and productive, he says. "It's almost like a free shot."

Tips include giving potential responders lots of information about your company, the type of responses that you're looking for, and your target audience. Also be careful to attach an appropriate fee. Mervis sponsored a second crowdsourcing competition for an online video advertisement he hoped would go viral. The eight responses were so-so, and Mervis wonders if the $1,000 reward was too small to attract top talent.

"What if I doubled the reward money? Would I get double the number of good videos?" he asks. "That's the thing: There are no statistics to support any of this."

Here, Mr. Mervis has hit one of the largest open spots in the open innovation literature. Empirical evidence on the divers of efficiency and effectiveness of open innovation initiatives. A great field for further study -- and one that is in the focus of our Aachen research group in a couple of projects.

Comments

[Frank Piller]

Thanks for sharing this background info, Jonathan! I agree that the "cost" for participants to contribute are an important factor, and an issue less researched. But your practical experience matched our theoretical understanding!

[Jonathan Mervis]

Hi Frank,

Thank for covering our story. I think a big difference between our first campaign for a witty headline(which turned out phenomenal) and our second campaign for a video (which was so-so) was the magnitude of effort required to participate. And related to the issue of "effort" is whether the task is fun and if they actually enjoy doing it and stretching their own creativity. Sometimes a lot of time and dedication isn't considered "effort" in this sense, if the user considers it fun.

For the Onion headline contest, we had many participants submit 20+ headlines. Some emailed personally to say they had so much fun and wanted to work on more projects with us directly. I think it's because it's relatively easy to knock out a few clever headlines. Once you get started and find some wordplay you enjoy, it becomes increasingly easy to add to your list.

FYI, we followed up our headline contest with the ONION with a Limerick Contest. I asked our readers to write a limerick that includes the themes of diamond jewelry, our name Mervis Diamond, and a distinct feel for Washington DC. Readers submitted their limerick entries at our blog, http://www.mervisdiamond.com/blog

Each week we included the best submitted limerick in our print ad in the Washington DC edition. As a grand finale, I wanted to bring together our virtual limerick diamond jewelry community into a physical space. We threw a tremendous happy hour, and with free beer and pizza, and read aloud our favorite limericks. The grand winner took home a diamond pendant.

You can some pictures and read some limericks here, http://mervisdiamond.com/blog/?p=607