Brand Value and Open Innovation: Companies open for customer input are more popular, study finds

The connection between open innovation and branding has been explored in a few studies recently. The best probably is Johann Füller and Eric von Hippel's study on brand creation by users in the outdoor community "Outdoorseiten" (see the short summary in MIT Sloan Management Review).

In their study, Johann and Eric surveyed members of Outdoorseiten.Net (ODS), a community of German, Austrian and Swiss hikers, about their brand preferences — and found that ODS members showed significant interest in buying hiking products with the community’s ODS logo. For example, when community members were asked whether they would prefer to buy a backpack from their favorite commercial manufacturer or one that was of equal quality and price but instead had the ODS logo, slightly more than one-third preferred the ODS product, and an additional 17.7% viewed the two brands as equally attractive. User communities seem to have the potential to create strong brands at low cost. Such user-generated brands, they suggest, can represent potential competition for traditional brands — but they may also present opportunities for co-branding and collaboration.

This is where a new study by Fronteer Strategy starts, a Dutch consultancy on co-creation. Together with a market research firm, they looked on the impact of openness of a company on brand value. While not a scientific study with a very sophisticated measurement instrument, the study still is interesting.

Among some big consumer brands in the Netherlands, coffee brand Douwe Egberts, supermarket chain Albert Heijn and Rabobank are considered to be the most "accessible brands."  Accessible brands are open for comment, opinion and contribution of customers. Sometimes, customers are even integrated as a partner in the innovation process.

While more a definition of "customer centricity" and not "openness", the study still is interesting. The more accessible a brand, the more it is perceived as "attractive" and "innovative".  This study shows the impact of a new significant factor: accessibility. It calls for an intelligent and relevant use of input from a firm's periphery.

The finding of this research: "openness" (horizontal axis) and "brand popularity" (vertical axis) are highly correlated.

But there is plenty of work to be done on developing better scales and research instruments. For example, according to this study, Nokia, Samsung and Apple are competing for the best position in the electronics sector. But Apple, for example, is known as a counterexample of open innovation: Apple does not connect with its customers, it is not doing any open innovation with regard to customer input, and it is just dictating consumers how to use its products.

So the real conclusion may be vice versa: The more attractive a brand, the more "open" is its appeal ... even if it is a closed shop. More research definitely is needed here.

Context:  Use Google to translate the Fronteer study into English.

Comments

[twitter.com/HYVE_CoCreation]

A recent study conducted by HYVE and Vivaldi Partners provides insights into the social brand value of traditional brands and community brands coming up with a ranking led by Apple. Even though Apple may not epitomize Open Innovation, it seems to be a strong brand in today's social media landscape.

The study in German can be downloaded at: www.hic-online.de/web/downloads/sozialer_Wert_Marken.pdf

Soon the study will also be available for the US market.

[Christian Waller]

Thank you for this suspending Artikel. Since the technical borders for User innovation are more or less occupied, branding by Customers is one of the last goals to be reached. Generally Corporate Identity and Branding are the most "covering dimension" of all marketing effets and therefore the core of company settings. If soon companies will be relativated by communities in combination with producing abilities, I think they can form an own Branding for their group of interest and products and services under their committment. But an approoved sign on thirdparty products ist still classical marketing. Suppriesed about about the published effects on customer loyalty, I guess we are allready on the right way, thinking that all the masscommunication made ourselves Brands within our own attitudes. The only question is for how long this customewr brands will be alive, cause strong brands need a long time to get top of mind and build a reliable image in the market.