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Feb 15, 2012
Case Study

B2B Crowdsourcing: Product development effort boosts sales 17% and new product sales 37%

SUMMARY: One company that sells and develops products for electricians created an online portal for new product development. Among other efforts, the marketing team heavily relied on social media marketing to promote the inventors who supplied new product ideas.

Find out how this campaign doubled website traffic, increased overall sales by 17% and new product sales by 37% by helping its customers drive product development. The overall effort also helped to make the company a thought leader in its industry.
by David Kirkpatrick, Reporter

CHALLENGE

A marketing team in a very traditional industry -- electrical products -- took a very outside-of-the-box approach that led to a successful effort in crowdsourcing new product development and allowing the company to become a thought leader in its field.

The company decided to create an online portal for new product development and began to heavily market to its multigenerational customer base through digital channels.

Madison Electric Products has been in business more than 80 years and had previously never engaged in any formal marketing. Several years ago, after a change in ownership, the company brought in Rob Fisher, Director of Marketing, Madison Electric Products.

He understood the industry was very traditional, and the company dealt with many mom-and-pop distributors and sold through a group of independent manufacturer rep agents. The end users of Madisonís products were electricians. Madisonís pain point was getting a foot in the door with some of the larger distributors.

Fisher said he knew if Madison could offer unique and relevant new products, it could promote the brand and start winning customers.

Find out how Fisherís team promoted the online portal, with an emphasis on social media platforms, and was able to double website traffic and increase overall company sales by 17% while getting the attention of the industryís larger distributors.

CAMPAIGN

The idea behind this effort was to do something relevant in the industry, in this case, offering new products designed by the end users. The big picture goal was to aggressively grow the company under the new ownership.

Step #1. Crowdsource new product development

Fisher said the team was coming up with ideas to provide value in the industry, and understood adding new products that electricians would find useful would be a powerful marketing tool.

"We could spend months and months trying to dream up ideas, going through prototyping and focus groups," said Fisher. "We decided to do that we wanted to crowdsource our new product development through our social channels."

This effort accomplished a couple of goals:
  • Shortened the product development lifecycle

  • Created new products that were validated by Madisonís customers because they were designed by the customers

The company created the Sparks Innovation Center -- an online portal where electricians, contractors and inventers could submit ideas for new products.

Fisher stated, "We had to have relevant, new products, and we have the channel to sell it, to market it, and to distribute it, but we didnít have the ideas. We needed those great ideas, and thatís why we turned to crowdsourcing our end user."

Step #2. Keep the process simple

The Sparks Innovation Center allows Madisonís customers to provide a general outline of the new product. Inventors who are more wary have the option to sign a non-disclosure agreement (NDA) with the company, but the company also allows for participants to provide general information on the product idea without going through the formality of an NDA.

The ideas are vetted, and if they donít fit well within the companyís traditional product groups, the team will point the inventor in the right direction for the next steps in developing their idea independent of Madison, and let them know to stay in touch with any future new product ideas. For product ideas that Madison is interested in, they remain in contact with the submitter.

"Once we decide on a few products that we want to play around with, we have an internal engineer here who will take some of these ideas and run them through a 3D (prototyping) program," stated Fisher.

Madison brings in a group of local electricians, contractors, distributors and inspectors every six to eight weeks to discuss the new product ideas.

They are asked questions such as:
  • Should it be made out of plastic? Metal?

  • Would you be willing to pay more for aluminum?

  • Is this something an electrician would be willing to replace a tool in the tool bag or bucket with?

Fisher explained, "One thing weíve discovered is it is very important for it to be a good product. It has to make sense, and itís got to make their (electricianís) lives a little bit easier."

For the inventors, Madison becomes the sales, marketing and distribution engine for the new products.

Step #3. Promote the effort through social channels

Fisher said he is a big fan of technology and social platform channels, but he was told people in the electrician industry "werenít on Facebook."

He said, "We are going to this multigenerational workforce where we have lots of great, young professionals coming into the industry, and I wanted to be able to communicate with them in the way they want to be communicated with, which is ultimately digital channels."

Realizing this, the marketing team promoted the Sparks Innovation Center through:
  • Facebook

  • Twitter

  • LinkedIn

  • Blog on company website

The team also uses these channels to promote the actual inventors, telling the story of how they became involved with Madison and the Innovation Center. The marketing team repurposes these stories in its advertising, as well.

Fisher had strong ideas behind taking the electrical industry to social platforms.

He said, "We need to be remarkable, we want people talking about us and we want to start doing new things. Thatís why we started the social channels and started promoting our inventors."

Step #4. Promote the online portal through multiple channels

Even though Fisher put an emphasis on the social media marketing, the Innovation Center was also promoted through more traditional means.

Press release

Madison allowed the online portal to run for a couple of months to ensure the process was smooth and trouble-free, and then the team kicked off the promotions with a press release sent out via a major wire service.

Trade magazine editors picked up the release, and Madison received some industry website postings and Twitter mentions from the press release.

Trade shows

Fisher said the company even brings some of the inventors to trade shows to join in the Madison booth wearing Madison gear.

This way trade show attendees can actually interact with the creator of Madisonís new products.

"We say, ĎIf you have a question, ask the gentleman who invented (the product) right here,í" said Fisher.

He added, "It really adds that bit of authenticity to the message we are putting out there with our Sparks Innovation Center."

Print and online advertising

Fisher said there are two main industry trade magazines, and the team alternated monthly print and banner ads with each over the course of a year.

He wanted to make sure readers of the print version saw the ads, and also reach the online readers of the publications.

"We did an alternating program of print, digital, print, digital, print, digital," Fisher explained.

Email

Madison also sent email blasts about the online portal to its database of around 3,000 collected from its customer base, trade shows and website registrations.

Direct mail

The team also created brochures on the Innovation Center that sales agents would distribute.

Step #5. Utilize innovative channels to become an industry thought leader

After the initial promotion of the online portal, the marketing team continued to use the Innovation Center as a means to establish the company as a thought leader in the industry.

By heavily promoting its new products and inventors through Facebook and Twitter, Fisher said he was attempting to push the industry as a whole forward into the social media world.

"Yes, we want to grow our business, and yes, we want to grow our brand, and we want to grow our sales, but ultimately the industry is lagging so far behind with some of the technology and some of the marketing. They can be doing better," Fisher stated.

He added the company is using its blog to educate people on some "marketing 101" basics, and the team even created a white paper on how to get electricians started with Facebook and Twitter.

Fisher explained, "If you come to our blog, we are going to have relevant information to the industry thatís going to make a difference. You can learn something. Weíre really trying to establish ourselves as leaders in the digital side of the industry."



RESULTS

In the two years of launching and promoting the Sparks Innovation Center, Madison Electric Products has seen very positive results. First, Fisher said although he canít tie a dollar amount to the social media outreach, the company has won numerous awards for its social programs and had a three-page article written in the leading trade magazine.

He added that two years ago, the company "couldnít buy a meeting" with the largest distributors at trade shows. Now, with the notoriety from its social and digital marketing efforts, the "big boy" distributors are actually calling Madison to set up meetings at the shows.

Here are some of the numbers behind this successful effort:
  • Website traffic is up 100%

  • Overall company sales is up 17%

  • New product sales is up 37%

  • The Sparks Innovation Center has received more than 134 submissions from inventors and has produced six new products with another seven in the pipeline

  • Madison achieves around a 40% open rate for its email sends

  • 148 Facebook "likes"

  • 41 LinkedIn followers

Beyond the numbers, Fisher said this campaign has brought many benefits to Madison.

"It has enabled us to be relevant to our industry because we are releasing products that are validated by our customer because they were designed by our customer," he said.

"It also makes us look like a leader because we are doing things that are outside of the box in our industry and that we are actually understanding the rise of the digital consumer. People know that we are the guys that release all the products designed by electricians."

"With new product sales up 37%, it has an impact on the bottom line, as well."

Useful links related to this article

CREATIVE SAMPLES:
  1. Sparks Innovation Center

  2. Facebook page

  3. Banner ad

  4. Brochure page one

  5. Inventor feature

Madison Electric Products

Sparks Innovation Center

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