9-35 There is an increasing trend toward using crowdsourcing as a research and development tool. According to Gartner, by 2017 around 75 percent of all product development capabilities carried out by consumer goods manufacturers will be derived from crowdsourcing.121 Their predictions went on to suggest that consumer goods companies that use crowdsourcing would see a distinct 1 percent increase in their revenue compared to competitors that did not use crowdsourcing. According to Gartner, consumer goods companies are actively seeking consumer engagement. It is technological development that is making this approach more popular and workable; companies use online communities to help them solve problems and develop new consumercreated products and ideas.

This type of crowdsourcing is a great way to interact with customers. It enables a business to turn customers into loyal brand advocates and to reward them for the ideas that they contribute. These initiatives aim to encourage the most qualified and creative individuals to offer their ideas and to improve projects and products.

Crowdsourcing is not a cheap alternative; it takes investment to be able to scan and evaluate the ideas that are being generated. Some companies, such as Kimberly-Clark, actually invite parents to submit ideas.

They also offer help develop the ideas and provide funds to create prototypes. If, in the end, the company does not want the product, they will help the parents find a manufacturing partner. Another example comes from Madison Electric Products, which manufactures products for the professional electrician. They rebranded in 2010 and used crowdsourcing as an integral part of the process—the company developed new products based on the ideas and opinions of electricians who responded to the crowdsourcing. The inventors of the new products could choose to sell their idea to the company, earn royalties on sales, or licence their idea to the company.
Since 2010, every one of the company’s new product launches has derived from crowdsourced ideas. The company can thus be assured that they are developing and marketing products that their professional market needs and will buy. Madison Electric Products discovered that it was vital to quickly evaluate ideas and respond to contributors.
Is it right to use ideas from customers with little or no reward? How would you go about ensuring that a crowdfunded project attracted a high and consistent level of participation?