Don’t Just Relate — Collaborate

Collaboration has become an established way of doing business with suppliers, channel partners and complementors. But, with a few notable exceptions, working directly withcustomers to co-create value remains a radical notion. As consumers have become increasingly empowered and demanding, marketing gurus have preached the benefits of customer-relationship management — essentially an “inside-out” approach to retaining customers based on the misguided notion that the company is the arbiter of the relationship and the customer plays a passive role. In today’s connected world, however,collaborative marketing — the valuable process of partnering with the end-user to maximize value — is the goal.

Collaboration can span all facets of marketing, sales and support processes.Collaborative innovation occurs when companies tap into user expertise and integrate it into the business’s new-product development process. For example, Procter & Gamble created the “P&G Advisors” program that lets consumers contribute to product development — they try new items and provide qualitative feedback, allowing P&G to refine products and marketing plans faster and at a tenth of the current testing costs.

Throughcollaborative design, companies can more deeply embed themselves in the design and development process of the end-user. National Semiconductor created a virtual design facility, offering a tool called Webench that allows engineers to create and test circuits. Last year, engineers developed 43,000 new designs on the site, saving clients $82 million and generating $1.5 million a month in design wins for National Semiconductor.

Collaborative communication lets companies work with customers to create “just-in-time” marketing communication that is responsive to current needs. General Motors and Toyota partner with Edmunds.com, an online automobile information provider, to create contextual messages triggered by incoming requests, helping aid decision making.

Collaborative selling makes sales more efficient by letting product users select offerings themselves, often more easily than the company can. Herman Miller, Dell Computer and General Motors allow clients to configure, price and order products, saving time on both sides.

And throughcollaborative support, companies reduce costs while increasing product satisfaction, allowing users to solve support problems by talking with the company and one another, as in Cisco System’s Networking Professionals Connection.

While working closely with the end-user offers compelling benefits, it requires companies to alter their mental models radically, from the “command-and-control” mentality that characterized the age of information inequity to the “connect-and-collaborate” mentality needed in the age of information democracy. Here are some key things companies should do to learn from their customers:

Reverse your vantage point. Thinking “outside-in” instead of “inside-out” will cause you to ask some crucial questions: What do your clients really buy from you? What do they do to reach the outcomes they seek? What hurdles and disconnects do they face? What do clients do that you can perform better? What do you do that they can do better?

Create collaboration platforms. Build technology platforms that allow end-users to connect to your design, marketing communications, sales, order management and support processes. Use design and selling tools that help you to work together easily, as well as community management tools to facilitate integration.

Embrace modularity. When clients can customize offerings and pricing terms by mixing and matching modular components, you change “one size fits all” to “have it your way” and bring user knowledge to your marketing plans.

Align incentives. Create incentives for product users to share their expertise with you — they can be monetary, such as Eli Lilly’s problem-solving bounties, or social, such as Cisco’s certification of network engineers who excel in answering support questions. Create risk-and-reward schemes to encourage the sharing of information.

Remember, while relationship marketing assumes that companiesrelate to customers, collaborative marketing requires that companieswork with customers to define, design and deliver value. Only when companies are able to collaborate better with end-users can the quest for value in the new marketplace reach its full potential.