Business - Written Monday, February 22, 2010 by Denis Hancock - 1 Comment

When you ask customers to dance, let them lead

I recently completed a report on Groupon.com for nGenera Insight research clients, as well as working with my colleague Jeff DeChambeau to put the finishing touches on a case study about Monopoly City Streets. The interesting connection point is that, in both cases, customers led the companies to a surprising place. The interesting contrast is that the companies responded very, very differently.

Groupon.com – a web 2.0 version of collective buying power, where local merchants offer up special deals so long as enough people sign up for them- wasn’t what the founders originally envisioned. They launched a site called “The Point”, where groups of people could form around specific causes and drive social change. Many of the people that came to the site seemed more interested in getting group discounts on products and services. Seeing the opportunity, Groupon was launched, and from a dead start in August the company now has a top-2000 rating on Alexa, is expanding rapidly, and reports to already be profitable. In short, the future is bright.

City Streets was a online version of the classic Monopoly game that Hasbro developed as a marketing tool. It absolutely exploded in popularity – 1.5 million registered players by November 2009, and 1.5 billion page views, made it the 12th most popular massively multi player online game on the web. Amazingly, it did so without incurring any direct marketing costs, and benefited from – among other things – some very engaged prosumers helping them co-create value. However, the future here isn’t so bright – Hasbro shut it down.You can read why, from their perspective, on the site.

Now obviously the two stories come from very different starting points – notably, one company was launching an entirely new business, while the other had a legacy business model to consider. But it’s fair to say that, we believe, this difference is not enough to explain a way the different responses. In both cases, a surprising new business opportunity emerged that the company didn’t originally envision, as the customers led the company towards the type of experience they wanted. In both cases, signs were everywhere that a lot of money could be made (in Hasbro’s case, the multi-billion dollar online game business is kind of flashing in the background here). But in only one case did something good come from it.

That’s a shame. Without getting into all the reasons why, it’s important to remember that when you ask your customers to dance, let them lead – because they might just teach you an interesting new routine that many of their friends enjoying doing as well.