The Open Value Chain: Collaborating With The Community

Dan Wellers and Christopher Koch

Consumers resisted Betty Crocker’s instant cake mix when it first hit the market. Adding water and pouring the batter into a pan made baking seem a little too easy. But then the company tweaked the recipe so it required eggs and oil as well, and something special happened: that little extra bit of effort made consumers feel like they were actually cooking. They started getting adventurous, experimenting with adding their own ingredients to the mix. Suddenly, the famous red spoon wasn’t a crutch, but a tool. Customers not only came up with new recipes, but also exchanged and discussed those recipes.

Other companies might have tried to stop customers from improvising with their products. Betty Crocker opted to encourage them and even give them ways to connect around their creations. In other words, the company opened up its value chain, the activities an organization does to provide a product or service that has value to its market. Customers found the cake mix even more valuable when they could customize it, collaborate on new uses for it, and connect with others who were doing the same. And that has turned out to be a key ingredient in making Betty Crocker one of the world’s best-known brands.

Today’s customers aren’t just consumers. They want to engage with companies and share their experiences with each other.  By opening their value chains, organizations make it easy for these things to happen.  When customers share their experiences with customizing your product, a humble box of cake mix can also be a platform that allows them to create, contribute, and connect… and when one of them shares their idea of jazzing up a white cake mix with tonic water and gin then topping it with a lime juice glaze, it creates a social object and a contribution to the community.

Customers in your business

Opening the value chain to greater customer collaboration expands how you deliver your products and services. It creates opportunities to incorporate customers and their input into every stage of the product lifespan, from ideation and design to manufacturing, marketing, use, and finally reuse or disposal. And it’s more than just encouraging customers to participate in conversations with each other and your brand – it’s about making them an ongoing part of the organization’s evolution.

For example, a growing number of people spend more of their lives moving frequently or living in small spaces. A furniture company could invite those prospective customers to their design departments to discuss their home furnishing challenges, suggest potential solutions, test and compare prototypes, and even advocate for specific materials or manufacturing techniques. One outcome might be a couch that combines the convenience and portability of the flat-pack furniture chosen by young adults with durable construction and custom design options that are more attractive and environmentally friendly. Another could be a community eager to promote the company’s new product and to help develop more.

Advance with technology

As technology advances and people increasingly demand products and services tailored to their specific need, companies will use advanced digital tools to bring customers into their offering design, manufacture, marketing, and distribution processes.

Imagine a future in which a colleague arrives at a lunch meeting in a pair of shoes you really like. You scan them with your smart glasses, which automatically identify the manufacturer, and pull up a photo of an outfit you’re trying to match. Once you use the image to select the color shoe you want, your glasses contact the manufacturer, place an order in your size, send payment, and confirm delivery details. In a sense, your colleague has served as marketer and distributor – and maybe even earned a small referral fee as a shoe model. Or how about receiving a customer’s request for a new accessory for one of your products, having an engineer sketch out an idea on the spot and transmit it to the local 3D print shop, and delivering a prototype to the customer for testing within an hour?

You won’t have to force customers into your value chain.  As long as you create multiple channels for them and encourage their participation with high-value incentives, they’ll show up. There’s no better way to ensure that what you’re delivering to your customers is what they actually want than to let them treat your products and services not as offerings, but as platforms for innovation.

SAP worked with more than a dozen industry experts to uncover five trends that will determine the customer experience over the next decade. “The Future Customer Experience: 5 Essential Trends” report examines each of these trends and offers recommendations for how brands should respond now to prepare.


About Dan Wellers

Dan Wellers is the Digital Futures Global Lead and Senior Analyst at SAP Insights.

About Christopher Koch

Christopher Koch is the Editorial Director of the SAP Center for Business Insight. He is an experienced publishing professional, researcher, editor, and writer in business, technology, and B2B marketing.