When customers get clever: managerial approaches to dealing with creative consumers

Abstract

Abstract Creative consumers (defined as customers who adapt, modify, ortransform a proprietary offering) represent an intriguing paradox for business. Onone hand, they can signify a black hole for future revenue, with breach of copyrightand intellectual property. On the other hand, they represent a gold mine of ideas andbusiness opportunities. Central to business is the need to create and capture value,and creative consumers demand a shift in the mindsets and business models of howfirms accomplish both. Based upon their attitude and action toward customerinnovation, we develop a typology of firms’ stances toward creative consumers. Wethen consider the implications of the stances model for corporate strategy andexamine a three-step approach to dealing with creative consumers: awareness,analysis, and response.D 2006 Kelley School of Business, Indiana University. All rights reserved. 1. When customers get clever What happens when customers get clever? Whatshould a firm do when creative consumers start tomodify products, hack code, and adjust services tosuit themselves? The following examples illustratethe dilemmas managers face, and the very differ-ent strategies firms employ in dealing with thephenomenon: