Business Innovation Observatory

Customer
Experience

Customer incentives
and involvement

Case study 36

Enterprise
and Industry
The views expressed in this report, as well as the information included in it, do not necessarily reflect the opinion or position of
the European Commission and in no way commit the institution.

Customer Experience
Customer incentives and involvement

Business Innovation Observatory

Contract No 190/PP/ENT/CIP/12/C/N03C01

Authors: Laurent Probst, Laurent Frideres, Dawit Demetri, Safaâ Moujahid, Bastian Vomhof & Olivia-
Kelly Lonkeu, PwC Luxembourg.

Coordination: Directorate-General for Enterprise and Industry, Directorate B “Sustainable Growth and
EU 2020”, Unit B3 “Innovation Policy for Growth”.

European Union, September 2014.

Table of Contents
1. Executive summary 2

2. Customer incentives and involvement 3

3. Socio-Economic Relevance 4

3.1. The development of social media is empowering the business customer relationship 4

3.2. The role of customer incentives and involvement in solving existing problems 6

3.3. The creation of new markets and jobs 9

3.4. Client perspectives and challenges related to the uptake of the trend 9

4. Drivers and obstacles 10

4.1. The need to widen the definition of “innovation” 10

4.2. The growth capital financing gap 10

4.3. Lack of awareness of existing support schemes 10

4.4. Lack of partnerships with public institutions 11

4.5. Lack of talented people in web-marketing 11

4.6. Business incubators supporting the growth of SMEs 11

4.7. The emergence of a collaborative relationship 11

5. Policy recommendations 12

5.1. Create a comprehensive definition of innovation 12

5.2. Improve SMEs’ access to finance 12

5.3. Simplify communications on available funding 12

5.4. Engage in more partnerships 12

5.5. Encourage the creation of technology hubs 13

6. Appendix 14

6.1. Interviews 14

6.2. Websites 14

6.3. References 14
Customer Experience

1. Executive summary
Customer incentives and involvement refers to methods and Studies predict that by 2017, half of all producers of
techniques applied by companies to engage customers in consumer goods will receive 75% of their innovation and
the development of new products. By leveraging the R&D capabilities from crowd-sourced solutions2.
creativity, insight and wit of customers, brands are
attempting to better target and segment their audience in From a company perspective, a key driver for using
order to predict market demand and design their marketing customer-generated and developed ideas is the growing
campaigns accordingly. trend of customers buying products according to their very
personal preferences and their level of involvement in the
With over 10 million people contributing to crowdsourcing development process. Moreover, the emergence of a
activities across the world in 20131, customer involvement collaborative business-customer relationship is
activities are a new form of how businesses interact reshaping user interaction with companies’ products and
with customers breaking with the traditional seller-buyer services. In addition, the improvement of digital tools and
relationship. Today, companies are empowering their crowdsourcing online platforms is connecting companies
customers to reap the benefits from their experience, with customers in more effective ways, enabling them to use
expertise, motivation and time in order to come up with their relevant experience, ability, and time.
data-driven market decisions.
The critical barriers for enterprises to implement customer
As a result, an increasing number of SMEs as well as large involvement processes are the challenge to attract capital
companies are integrating customer involvement techniques for their growth phase, the lack of awareness about existing
as part of their business model and marketing process. public support schemes and the need to widen the definition
Through activities such co-creation, co-design, user of “innovation”. In a broader perspective, the lack of
innovation, user manufacturing, or living labs, education of the market on the benefits of customer-driven
companies are able to turn customer involvement into innovations appears as a major challenge for the uptake of
innovations. the trend.

Key benefits of customer involvement include the In this regard, policy recommendations to foster the
improvement of viability assessments of products enabling uptake of the customer-driven innovation market concern a
companies to generate more sales and revenues. In this better access to finance for SMEs, a clearer communications
context, customer involvement activities are usually initiated on EU funds and the elaboration of an official definition for
by a value creation strategy enabling brands to acquire a “innovation”. It would be further recommended to create
competitive edge. Consequently, the economic potential of technological hubs, to address the shortage of IT
customer involvement has been steadily accelerating. professionals and to encourage the creation of more
partnerships between SMEs and public institutions.

Customer incentives and involvement 2

Customer Experience

2. Customer incentives and involvement

Customer incentives and involvement techniques are being
used to facilitate product and service development, and to Figure 2: Customer involvement in innovation
processes
increase the market adoption of new products. The
internet is the prevailing medium through which companies
ask customers to test innovative technologies or to carry out Idea
Development Commercialisation
specific tasks (e.g. price-checking or designing). By drawing generation
on the internet’s large user base and its ability to generate
viral effects, companies can better endorse their products
and minimise their costs.

Incentivising and involving customers is thus about

fostering user loyalty and pro-activity in order to reduce
the cost per user acquisition (CPA) for new products and Customers as Customers as Customers as
idea generators co-creators testers and end-users
services. In return, companies can compensate their
customers for their involvement and their feedback. Internal Ideas
External Ideas

This trend transforms the seller-buyer relationship into a

Source: PwC Analysis3
collaborative business-customer relationship (Figure 1).
Customers are no longer just consumers of goods and To encourage customers to participate in innovation
services but becoming business partners, co-creators and/or activities, businesses can launch loyalty programs including
co-designers. incentives or rewards that motivate customers to contribute
to their commercial success, thereby creating a win-win
Figure 1: Transformation of the customer status in the situation for the customer and the company. Incentives
business relationship offered by companies may include acknowledgements,
discounts, special deals and financial rewards, as well as
SELLER-BUYER COLLABORATIVE opportunities for exclusively designing, developing or testing
RELATIONSHIP RELATIONSHIP
new products or marketing campaigns.
Companies
Today, social media and online communities have
Providing empowered networking with customers that are increasingly
• Feedback comfortable in sharing and providing feedback on products
Selling Buying Involving • New ideas
• New trends and services. Indeed, social media like Facebook, Twitter,
• Free-advertising Instagram, etc. provide tools to interact with customers
influence their purchasing behavior and develop loyalty
“Passive” Customers “Active” towards the brands while rewarding them for their
contribution to the business.
Source: PwC Analysis
The customer involvement differs depending on the type of
In order to leverage on customer involvement, companies social media. Facebook is mostly used by companies to
have multiple opportunities to develop collaborative develop customer loyalty (as people can simply "like" a
relationships with customers and finding win-win page), whereas Twitter is better suited to gather feedback or
opportunities for acting in commercial partnerships. resolve problems with products or services. YouTube and
Furthermore, companies are encouraging customer Instagram, on the other hand, are more useful for
engagement at all stages along the value chain, including: advertising, e.g. by inviting customers to photograph or
inbound logistics, operation, outbound logistics, sales and demonstrate instances in which they are using a company's
marketing, and servicing (Figure 2). product or service.

Customer incentives and involvement 3

Customer Experience

The fact that social media already attract 10% of all digital The companies described in this case study have developed
advertising expenditure highlights the growing significance innovative strategies for encouraging customers to get
of this relatively new medium4. However, there is still a lack involved into business-cycles, be it via gathering market
of effective metrics linking social media advertisements to data, testing products or services, or providing feedback. The
increases in sales. For example, few metrics take bloggers value proposition of these companies consists of enrolling
into consideration because it remains difficult to understand customers into incentives programs that provide financial
their influence online. incentives or exclusivity in the testing new products.

3. Socio-Economic Relevance
The expansion and transformation of web platforms into Recent studies have shown that people are increasingly
networks have led to an empowerment of customers. As a turning to social media to solve problems and communicate
result, the economic impact of this customer empowerment their complaints. A survey conducted by IAB and Lightspeed 6
is multi-fold. This section will explore the socio-economic in 2012 demonstrates that 44% of adults use the web to
impact of customer-driven innovation strategies notably share grievances about products and 57% of consumers
through the presentation of the problems underpinning the prefer to search online to solve customer service issues.
creation of the showcased companies and the innovative
solutions found to tackle them. Such connections and interactions between costumers and
companies through social media and other digital platforms
are expected to grow in the coming years. The total number
3.1. The development of social media of social media accounts, for instance, is expected to grow
is empowering the business from about 3.1 billion in 2012, to 4.9 billion in 2016.
customer relationship Besides, the number of social media users is expected to rise
from 1.6 billion users in 2012, to 2.3 billion in 20167.
Over the past 20 years, the online community of social
media users has rapidly increased in size, providing an Moreover, this phenomenon has been taken up across all age
entirely new way for companies to interact with customers. groups, especially among the 18-24 years olds (Table 1).
Before, the interaction of companies with customers has Hence, it is clear that the use of web platforms to interact
often come in the form of market data collection. However, with companies is becoming culturally accepted by all the
companies are now asking customers to share their age groups of the population.
opinions on company products and services and deliver
business content. Table 1: Percentage of people using social media for
interaction with companies
The transformation of the web from a content platform to a
dynamic and sharing platform has eradicated technical Age group % of people who have dealt with a
barriers that prevented potential customers from creating brand through social media
online profiles and accounts that facilitated their networking
18-24 49.5
and self-expression across digital platforms (Figure 3).
25-34 44.6
35-44 37.5
Figure 3: Social media enhances customer networking
45-54 31.7
55+ 27.4
Source: A Perfect Mix: Social Media & Customer Service, BackCheck

The role of social media in influencing buying decisions, and

building customer trust and loyalty is constantly growing. A
recent report on “Digital Influence” by Technorati Media
provides some market insight into the fast evolving digital
landscape. It is created on the basis of information collected
from over 6,000 influencers, 1,200 consumers and 150 top
brand marketers8.
Source: www.mysocialagency.com5

Customer incentives and involvement 4

Customer Experience

Figure 4 illustrates the ranking of the online services which Figure 5: Digital Marketing Radar
are likely to influence customer behavior. It appears that
blogs, as well as social media (e.g. Facebook, YouTube, and
LinkedIn) play a significant role in influencing purchase
decisions.

Figure 4: Ranking of online services capability to

influence customer behaviour

Source: www.smartinsights.com9

Companies are increasingly aware of the added-value of

social media as a relevant platform for their digital
marketing. Out of the 2,100 companies surveyed, 85% of
companies are currently engaged in social networks
like Facebook, microblogs like Twitter, and sharing
multimedia on platforms such as YouTube. Research from
Source: Technorati Media 2013 Digital Influence Report the Harvard Business Review report "The New Conversation:
Taking Social Media from Talk to Action" highlighted that
Managing a brand on social networks has become essential much of the investment in social is future-oriented10.
in the current economic and competitive online environment.
Consequently, the development of a coherent marketing Companies are primarily building their social media presence
strategy in the faster, more flexible and affordable digital through three platforms, namely: Facebook at 91%, Twitter
radar is becoming increasingly important when compared to at 85% and YouTube at 73% (Figure 6). Blogs have a
traditional marketing methods (TV, radio and newspapers significant place in the top eight just ahead of Instagram and
ads). Google+11.

The digital marketing radar is a tool enabling companies

Figure 6: Social platforms most used by companies
to develop their strategy for reach by prioritising the types of
sites to favour in order to help them gain visibility (Figure 5).
As demonstrated through the digital marketing radar the use
of a specific social network, social benchmarking, photo and
video sharing platform is not a random choice and implies
specific effects related to each chosen medium. As a result,
the digital marketing radar serves as an effective instrument
to choose the right communities in order to create and share Source: Technorati Media 2013 Digital Influence Report

the right content accordingly.

Moreover, according to a study conducted by Pivot
Conference12 between 2011 and 2012, customers are most
interested in having access to company content before
providing constructive feedback for improving their products
or services. Nevertheless, many enterprises are making up
for the shortfall in access to content by offering incentives,
like deals, promotions, additional revenues, etc.

In order to better understand and assess the potential of

customer incentives and involvement, the following section
draws on the information collected via interviews with the

Customer incentives and involvement 5

Customer Experience

five companies presented in Table 2. By showcasing their

products and services this case study demonstrates how
their novel business innovation can lead to successful
business development and growth.

Table 2: Overview of the company cases referred to in this case study

Company Location Business innovation Signals of success

Adpoints UK Platform rewarding customers for watching and engaging Winner of EuroCloud UK 2012 Award
with video-based advertising. The audiences can choose what for best cloud start-up.
they want to watch, where and when, and then give feedback
on the advertisements.
EyeKa France Crowdsourcing platform connecting creative individuals with Winner of 2012 Co-Creation Award.
brands to boost their return on marketing expenditure.
Enables people to accept a business challenge (animation,
creative writing, video, graphic design, label and packaging)
and propose an innovative solution to companies.
KBHFF Denmark Organic food cooperative based on a social enterprise model. Rapid expansion of the concept
Members volunteer to work three hours per month in the throughout Europe and the USA.
store to be allowed to shop at the KBHFF. Members are Eleven shops in Copenhagen. Park
responsible for the management of the coop’s purchasing, Slope Food Coop in New York has
distribution, financing and communication. more than 15,500 members.
Logograb Switzerland Brand-customer interaction tool that enables customers to Extensive international media
scan logos in order to generate and access real-time brand coverage.
content such as product information, discounts and
customers opinions.
Sampleo France Product testing platform that allows companies to offer their Winner of the “Petit Poucet” 2012
products to customers in exchange for their review and Award for most Innovative start-up,
feedback. Finalist of the Movjee Award for
Innovation.
Staffino Slovakia Mobile application enabling consumers to give direct After 6 month business activity
feedbacks on the quality of the service offered by already entered multiple foreign
companies’ employees. markets.

in the UK, Adpoints can offer discount shopping points for

3.2. The role of customer incentives consumers who are watching ads and providing feedback on
and involvement in solving their content.
existing problems By connecting highly engaged audiences with leading
advertisers, the start-up is reshaping the consumer-
Incentive programs have the potential to encourage
advertising experience. This unique advertising solution
customers to tackle a wide range of existing problems and to
makes advertising a more enjoyable, involving and
generate innovative ideas. The business challenges below
rewarding experience for viewers, who are given the choice
have given rise to profitable business solutions that leverage
to watch the ads they selected whenever and wherever they
on customer incentives and involvement. Furthermore, they
want.
underline the potential of companies in the highly innovative
markets they operate in. Furthermore, consumers are placed at the centre of the
advertising system that serves and entertains them. In
Problem 1 – Once advertisements begin on TV, many addition, the incentivised elective viewer choice platform
viewers stop watching or switch to another channel. enables brands to benefit from greater insight into their
Nowadays, several technologies provide an array of options customers’ opinions; thereby facilitating increased
that facilitate the avoidance of advertising, e.g. the fast- engagement with brands, strengthening consumers’ pre-
forward option, the opportunity to watch content a month disposition towards advertisers’ messaging and offers.
later or ad blockers. As a result, an increasingly higher
number of ads are no longer being viewed.

Innovative solution 1 – Adpoints is an innovative platform

incentivising consumers to watch entire adverts. Thanks to
its partnership with Nectar, the largest loyalty card scheme

Customer incentives and involvement 6

Customer Experience

Adpoints reward process to benefit from reasonably priced and healthy organic
products.

The cooperative is dedicated to the sale of seasonal, organic

and biodynamic products, produced by local farmers. To
meet customers demand for inexpensive organic food
produced without synthetic inputs and chemical additives,
Source: adpoints.com KBHFF takes profit from the absence of labour costs and
from its short supply chain.
Problem 2 – Companies are struggling in finding ways to
The coop is based on a social and collaborative model in
create new ideas or test their products with potential clients.
which its members support the provision of affordable
products and contribute to the improved organisation of the
Innovative solution 2 – EyeKa is a crowdsourcing platform cooperative as a whole. By paying a membership fee of
integrating customers into the innovation process of brands. around EUR 15, customers can decide how they plan on
Through the launch of creative challenges (animation, contributing, whether it is by working three-hour shifts in one
creative writing, video, graphic design, label and of KBHFF 11 pop-up shops, by joining one of the 5 working
packaging…), customers are invited to solve real-world groups committed to the development of KBHFF (purchasing,
company problems by creating and suggesting new distribution, financing, communication, web-site design, etc.),
marketing or product ideas. In the end, customers provide or by starting some new innovative initiatives, like the
the brand with a final project output ready for internal research project entitled “EcoHub”.
validation, agency inspiration and consumer testing.
The food cooperative concept serves to provide customers
The innovative nature of this business model stems from
with best-value in both the quality and taste of organic
the reshaping of the innovation strategy of brands where
products. Inspired by the success of Park Slope food
consumers are no longer occasionally involved as validators
cooperative in New York (USA), the food cooperative concept
but are now continually engaged as co-creators.
has rapidly expanded throughout Europe, particularly in
The added-value for brands lies in the discovery of new Germany and Poland. In addition, the creation of a
marketing possibilities thanks to the valuable and creative cooperative model in France is expected for 2015.
insight of thousands of consumers over 154 countries. Co-
created projects also facilitate reduced uncertainty KBHFF customers performing their 3hours-shift
regarding how the market will respond to the launch of a
co-created product.

Eyeka’s online contests platform

Source: samvirke.dk14

Problem 4 – The ubiquitous presence of adverts, together

with the increasing number of misleading advertising
generated a growing mistrust towards the claimed effects of
Source: eyeka.net13 products displayed in adverts. As a result, end users are
unable to assess the value proposition of products.
Problem 3 − The production of organic food requires higher
costs than regular food at each step of the supply chain. As
Innovative solution 4 – LogoGrab is a mobile phone
a result, customers face increasing difficulty in finding
application enabling consumers to scan brand logos in order
healthy affordable bio or organic products.
to generate further information on the companies’ products
and services, as well as to access other customers’ opinions
Innovative solution 3 – KBHFF is a member-based and and experience reports.
member-driven food cooperative, which requires
To keep customers at the forefront of product
members to work at its premises 3 hours per month in order
innovation, LogoGrab’s technology offers multiple

Customer incentives and involvement 7

Customer Experience

opportunities for reviewing feedback on products which, in and how they ought to redefine their offer. Thus, by
turn, enables customers to form their own opinion on integrating a new product in their consumers’ daily life,
brands and decide whether they want to buy specific brands are resetting the interaction between product
products or not. Moreover, LogoGrab can serve as a promotion and consumers.
marketing tool for companies since they have access to
real-time data about consumers’ experiences with their Problem 6 – Employee performance appraisal remains a
products. fundamental matter of concern for businesses willing to
reward their best staff members for their performances
Therefore, the added value of this innovation is two-fold, as
while boosting the overall team results by motivating the
it allows consumers to share and benefit from useful
lowest performing staff members.
information on brands and provides brands with a valuable
solution to assess their marketing effectiveness.
Innovative solution 6 – Staffino is a mobile application
LogoGrab’s logo scanning concept
enabling customers to give direct feedback on the quality of
the service offered by the employees who served them.

Staffino supports to the human resources departments of

companies by facilitating their appraisal of the strengths
and weaknesses of their employees as well as their ability
to address them over time. In addition, Staffino facilitates
the performance measurement of staff members and
serves as a tool for analysing the root cause of complaints.

New solutions found through customers’ direct feedbacks

are perceived as more legitimate. Consequently, they are
also believed to have the potential to make a major
change in the employees’ judgement on their reviews.
Moreover, companies are given the choice to decide whether
or not they want to publish the feedbacks’ received on their
employees which can serve to increase employees’
Source: www.logograb.com
appraisal of the mobile application.
Problem 5 – The testing phase of a product constitutes a Example of a Staffino feedback interface
critical step of a new product development process. This step
in the product development sequence checks the adequacy
and consistency of the end product with its original goals in
order to assess the level of refinement required. Therefore,
insufficient or ineffective testing phases have led to
dramatic results during the market launch of a great deal of
new products.

Innovative solution 5 – Sampleo is offering an advertising

solution to companies by providing an online platform
connecting brands with incentivised consumers willing to
test new products and share, with brands, their opinion on
the product performance, utility, etc.

At the intersection between advertising, product promotion

and marketing communication, “tryvertising” refers to the
opportunity given to consumers to test products for free
in order to provide valuable feedbacks on their
experience with the product. Through this marketing
technique, Sampleo creates more exposure for products as
it directly targets the end users that decide which product
they want to engage with.
Source: staffino.com
Increased consumers involvement in the testing phase of
new products is decisive for brands to understand their
consumers’ perspective on a product, their purchase intent

Customer incentives and involvement 8

Customer Experience

3.3. The creation of new markets and customer-driven innovations. In a great deal of successful
customers co-created innovations, the success of the
jobs product can be partially explained by the end-users’ sense of
ownership of the product linked to their active role played in
Social and digital technologies have developed a new, more
the development process. The increasing economic impact of
flexible working community for enterprises that may tackle
a “I designed it myself feeling” 19 is leading to an escalating
business challenges. This new market is called
market adoption of the concept of mass customisation.
crowdsourcing, which is defined as “business created using
digital assets and/or capabilities, involving digital products, In addition, by using community ideas to generate
services and/or customer experiences, and/or conducted transformed products or new categories of products,
through digital channels and communities.”15 customers can benefit from innovative products that are
better aligned with their expectations. In this regard, it is
The internet makes crowdsourcing possible at a macro-scale
imperative for companies to motivate their consumer
level and therefore facilitates the positive impact it can have
communities to avoid a lack of engagement, which would be
on innovation and cost reduction. These positive aspects are
a barrier for the uptake of the trend.
recognised by more and more companies that are
increasingly collaborating with customers to innovate Recent changes in the buying process of customers have
and market products more quickly and efficiently in an also become key drivers of the clients’ uptake of the trend.
ever changing competitive environment. Irrefutably, companies providing unique and outstanding
customer experiences have better chances to secure
For instance, Gartner’s predicts that by 2017, more than half sustainable and cost-effective growth. Such experiences
of all producers of consumer goods will receive 75% of their typically leverage on early user involvement in the design of
consumer innovation and R&D capabilities from crowd- innovative productive to generate valuable market
sourced solutions. In addition, Gartner’s forecast suggests information for companies. The gathered information
that crowdsourcing will bring companies a competitive edge, enables companies to further tailor the innovation for the
for example, consumer goods companies that employ end-users. In this regard, customers are helping companies
crowdsourcing in marketing campaigns or new product to better identify market demand. In this context, the term
development are expected to boost their revenue by 1% “lead users” refers to customers already experienced needs
compared to “non-crowdsourced competitors” by 201516.
that will be later experienced by the overall market. In this
regard, their insight can help companies to take smarter
Online communities are the basis of crowdsourcing and have
decisions.
emerged as a “creative class” over the last 5 years. The total
membership of the crowdsourcing community is estimated
Another fundamental element for the uptake of customer
to be at least 10 million and is expected to grow in the involvement in companies’ innovative process lies in the
next few years.17 These crowdsourcing participants typically education of the market on the benefits of customer-
combine a traditional job with crowdsourcing activities; driven innovations. Indeed, all the showcased companies
however, the coming years will likely lead to the emergence have experienced some degree of market scepticism
of "crowdsourcing professionals”18. As a result, companies
during the launch of their innovative products or services.
facing capacity shortcuts (expertise, time or geographies) will
have the choice of engaging full-time or temporary The advantages and disadvantages of this paradigm shift -
crowdsourcing “employers”. from a company-centric logic to a consumer-centric
logic - is unclear (Figure 7 on page 10). It is difficult to
Crowdsourcing platforms also give each participant the
measure the net-benefit of a co-created innovation. In this
opportunity to be creative, as they have the chance to
regard, companies that are likely to take advantage from
develop their skills (e.g. students that want to improve their
customer-driven innovations are usually reluctant to do so.
marketing skills and free-lancers who want to get greater
online visibility, etc.) and be rewarded at the same time.

3.4. Client perspectives and challenges

related to the uptake of the trend
The eagerness of customers to drive and co-create
business innovations is a key driver for the uptake of

Customer incentives and involvement 9

 Customer Experience

Figure 7: Traditional company-centric logic and new consumer-centric logic

Source: PwC Analysis

4. Drivers and obstacles

The further development of customer-driven innovations is for companies that are growing but are not yet
supported by important drivers but also hindered by various profitable. As in such cases, financial institutions are
obstacles. The detection of these drivers and obstacles will reluctant to provide loans and guarantees, while private
serve as a tool to better target the strengths fostering the investors are not willing to make investments below
development of user-led innovations. This identification will EUR 1 million.
also permit to overcome the barriers hampering the growth
of the market. Therefore, this case study identified a so-called “valley of
death”, which lies between public financing schemes
supporting micro-enterprises and venture capitalists
4.1. The need to widen the definition of
investing preferably in already profitable companies.
“innovation” Consequently there is a lack of interim funds between
EUR 100,000 and EUR 1 million for supporting SME growth.
Sampleo explained how they encountered significant
difficulties in getting fiscal advantages such as Crédit Impôt
Recherche (CIR), and Statut Jeune 4.3. Lack of awareness of existing
“In France, the definition of
inno-vation is often limited to
Entreprise Innovante (JEI). Although support schemes
Sampleo proposes an innovative
technolo-gical innovation. If
platform to connect customers and Showcased SMEs acknowledged that there is a wide range of
there are no R&D activities in
companies, the SME was not support schemes at local, regional, national and EU-levels;
the company” – Sampleo
considered as being enough the same SMEs, however, feel
“The issue is that the
innovative to get access to these financing schemes. that they are not well enough
application pro-cesses are
informed about both traditional
both complex and unclear. For
Thus, public funds and investors should not limit their and alternative sources of
instance, I tried to apply for
understanding of innovation to technological development, financing and how these can be
Horizon 2020, it took me two
as the concept of innovation also covers management and obtained.
hours to understand that I
marketing innovations that are less risky and can generate
Therefore, there is inefficient might not be eligible” –
highly creative and profitable business.
Sampleo
communication between
support scheme providers and SMEs. For instance, companies
4.2. The growth capital financing gap find it difficult to:
Companies showcased within this case study have largely
been financially-backed by business angels and private • Identify suitable points of contact to turn to for advice;
funds. Yet companies, like eYeka, identified a financing gap and

Customer incentives and involvement 10

 Customer Experience

• Understand the tender specifications of the funding a result, many European SMEs find it difficult to hire people
schemes they would like to apply to. who are able to create and manage a firm’s online
marketing strategy, while maintaining a good client-company
This constitutes a barrier for SMEs which have neither the relationship.
time nor resources to identify the funds they are eligible for
and understand complex application processes. As a result,
SMEs are missing opportunities to get access to finance and
4.6. Business incubators supporting the
may fall into the “valley of death”. growth of SMEs
Through incubators, SMEs have access to dynamic
4.4. Lack of partnerships with public entrepreneurial environment where they can benefit from
institutions support and strategic guidance. Normally, as underlined by
Sampleo (incubated in the EM Lyon incubator at the creation
According to interviewed enterprises, public institutions and currently incubated in the Paris Incubator), SMEs have
usually collaborate with large companies and, as a result, do limited revenues; having access to a professional business
not provide SMEs with the opportunity to demonstrate their
infrastructures in big cities like Paris represents a big chance
innovative and creative capabilities. The showcased SMEs
for SMEs.
also believed that this is reflected in complex and
demanding public procurement processes which deter SME
involvement. 4.7. The emergence of a collaborative
relationship
To illustrate this lack, eYeka detailed their thoughts on the
difference of public partnership between the US and Europe. The lifeblood of the showcased enterprises are customers
According to the company, in the that are actively shaping the products and services provided
“In Europe, public institutions
US, SMEs are used to working with by companies. Online communities provide fora in which
do not have a culture of
the government and its agencies customers can share their opinion and feedback. As such,
collaborating with SMEs.” –
(e.g. NASA). Meanwhile in Europe, customers need not limit their role to passive buyers but
eYeka
the public institutions do not share may become active business partners, co-creators and co-
the same culture of collaboration Therefore, public designers.
institutions ought to give SMEs more chances in gaining
visibility to the market and earning the trust of prospective The internet has facilitated the creation of such online
clients. communities in which customers can share their
experiences, propose ideas and express grievances about
4.5. Lack of talented people in web- products and services. Social media and digital technologies
have enhanced the relationship between companies and
marketing customers. Customers want their suggestions to be taken
into consideration by the companies for the creation,
As social media and other digital technologies are the
development, testing and improvement of products and
communication channel through which companies and
service, sometimes in exchange of incentives. Customer
customers more and more communicate and share ideas,
involvement is increasing and represents a significant asset
enterprises increasingly need people that are skilled in the
for the companies which can rely on customers to better
field of web-marketing. According to Sampleo, Europe
develop their businesses.
suffers from a dearth of web-marketing experts and, as

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 Customer Experience

5. Policy recommendations
In order to simplify or optimise the policy framework for the measure is not limited to professional investors, making
user-driven innovations, this case study provides some it possible for any individual to invest in start-ups.
practical recommendations. Some of the following
recommendations, however, do not exclusively concern Start-ups have to pay taxes even during the early stages of
enterprises willing to implement customer-led innovations, the development of their company. Yet, many companies are
but also apply to the further development of SMEs in also eligible to a lot of subsidies to establish their company.
general. However, given the difficulties faced during the long process
of applying for these subsidies, the majority of interviewed
start-ups would prefer to benefit from tax reliefs rather
5.1. Create a comprehensive definition than subsidies to support the growth of their company.
of innovation
Numerous subsidies both at national and European level are 5.3. Simplify communications on
providing funds for innovative companies. Yet, there is no available funding
clear definition of what innovation encompasses, nor is there
a definition of the specific requirements to be considered as Not all entrepreneurs have the skills and time to “decrypt the
an innovative company. European documentation” that is often described as
complex and illegible. A clarification of the EU
Several showcased companies were denied subsidies offered documentation regarding available EU subsidies and projects
to innovative companies because of their lack of is a critical step to improve the further development of
investments in R&D or because their innovative solutions do innovative enterprises.
not correspond to a technological innovation. Yet, although
the innovation process often requires an excellent level of The systematic implementation of one-stop-shops
R&D, it should not be reduced to R&D. Therefore, it is providing information regarding European subsidies
necessary to go beyond the simple analysis of innovation throughout Europe would facilitate the understanding of
only from the perspective of percentage of investments in available EU support to SMEs. These one-stop-shops could
R&D. further actively provide legal support and advice to
entrepreneurs as well as administrative support to ensure
5.2. Improve SMEs’ access to finance that every start-up seeking to benefit from EU funds
receives sufficient information on the process to do so.
Financial support is considered as a cornerstone for the
uptake of the market of customer incentives and In order to ensure that EU subsidies are accessible to a wide
involvement. The particularity of audience it is necessary to provide a better picture of EU
“In the UK, start-ups have subsidies by clarifying the requirements and eligibility
the finance gap for enterprises
really benefitted from the criteria necessary to benefit from EU subsidies. The
active in this field is that they
Enterprise Investment publication of a single directory gathering all these
usually need access to external
Scheme (EIS)” – Adpoints information could be a suitable and practical medium to do
finance in the late stage of their
business development. Indeed, a high number of enterprises so.
faces a finance gap between the seed age and the phase of
profitable growth. This period is sometimes referred to as 5.4. Engage in more partnerships
the “valley of death” due to the harsh insecurity of
enterprises having to deal with the lack of sufficient long- Public institutions could genuinely benefit from the solutions
term investments during the development phase of their provided by enterprises in the field of customer-driven
product. innovations. Moreover, public institutions could also become
significant references for companies in this field which
Governments could facilitate the access to finance of would support the further development of customer-driven
innovative companies by reforming their tax system in innovations. However, the huge amount of specific
order to further promote innovation. For instance, the requirements is hindering the development of such
Enterprise Investment Scheme (EIS) implemented in the UK partnerships.
consists in the provision of a tax relief in a fiscal year for
every investment in innovative start-ups. This incentive was In Finland, the creation of a crowd-sourced legislation
described as especially successful due to the reduction of was experimented by the Finnish Ministry for Environment in
the risk of investing in start-ups that it creates. Moreover, collaboration with the Committee for the Future of the

Customer incentives and involvement 12

 Customer Experience

Finnish Parliament. With such active public involvement, this 5.5. Encourage the creation of
initiative promoted citizen participation and input in the law-
making process of democratic countries. technology hubs
In addition, a Finnish non-profit organisation created with Technology hubs, incubators and accelerators have
Open Ministry a crowdsourcing platform to facilitate the been depicted as important drivers for the growth of the
involvement of citizens in the enterprises that were interviewed for this case study.
“Entrepreneurs do not have
creation and concrete drafting of
the time to decrypt EU Technology hubs proved particularly efficient in supporting
new legislations. The platform
documentations – Sampleo start-ups willing to develop innovative ideas by creating an
serves as an effective instrument
environment where start-ups
to adapt new policies to the needs of citizens and to engage “The french ‘Réseau
can work and leverage on the
them in a true deliberative democracy. Entrepreneur‘ is a very
experience of other SMEs. The
effective policy” – Sampleo
In this regard, echoing the “Recommendation CM/Rec presence of universities and
(2009)1” on electronic democracy (e-democracy) of the centres of excellence combined with the availability of a
Council of Europe’s Committee of Ministers to member wide array of services such as experts of various cutting-
states, governments should take further steps towards edge technologies, experts of PR and marketing, lawyers,
establishing e-democracy.20 etc., constitute an environment favourable to
entrepreneurship and the risk culture

Customer incentives and involvement 13

Customer Experience

6. Appendix
6.1. Interviews
Company Interviewee Position

Adpoints Martin Pugh CEO

Eyeka Francois Petavy CEO
KBHFF Andreas Lloyd Co-Founder, CEO
LogoGrab Luca Boschin Founder, CEO
Sampleo Edouard Crémer CEO
Staffino Katarina Klinkova CSO

6.2. Websites
Adpoints www.adpoints.com
Eyeka www.eyeka.net
KBHFF www.kbhff.dk
LogoGrab www.logograb.com
Sampleo www.sampleo.com
Staffino www.staffino.com

6.3. References
1
http://www.crowdsourcing.org/editorial/eyekas-francois-petavy-five-predictions-for-crowdsourcing-in-2014/30116.
2
http://news.eyeka.net/2013/10/more-than-half-of-consumer-goods-companies-will-use-crowdsourcing-by-2017-gartner-
report.
3
Customer involvement into innovation processes: A conceptual model, Aiste Vaisnore, Monika Petraite, Kaunas University of
Technology
4
http://www.jeffbullas.com/2013/03/11/10-insights-on-social-media-and-blogging-influence-new-
research/#xOTd5MTHDrtbF0Y6.99.
5
http://www.mysocialagency.com/social-media/managing-customer-complaints-on-social-media.
6
http://wallblog.co.uk/2012/03/16/the-confusing-rise-of-social-customer-service-infographic.
7
http://www.radicati.com/wp/wp-content/uploads/2012/05/Social-Media-Market-2012-2016-Executive-Summary.pdf.

8
http://www.jeffbullas.com/2013/03/11/10-insights-on-social-media-and-blogging-influence-new-
research/#xOTd5MTHDrtbF0Y6.99.

9
http://www.smartinsights.com/digital-marketing-strategy/customer-acquisition-strategy/prioritising-digital-marketing-radar.
10
http://hbr.org/web/slideshows/social-media-what-most-companies-dont-know/1-slide.
11
http://www.jeffbullas.com/2013/03/11/10-insights-on-social-media-and-blogging-influence-new-
research/#xOTd5MTHDrtbF0Y6.99.
12
https://www.linkedin.com/today/post/article/20130610154847-2293140-study-the-state-of-social-marketing-vision-
purpose-and-value-drive-a-new-era-of-digital-engagement.

13
http://news.eyeka.net/2012/01/creativity-takes-time-even-in-online-co-creation-contests.
14
http://samvirke.dk/forbrug/artikler/koebenhavns-foedevarefaellesskab-frivillige-groent-formaal.html.

Customer incentives and involvement 14

Customer Experience

15
http://news.eyeka.net/2013/10/more-than-half-of-consumer-goods-companies-will-use-crowdsourcing-by-2017-gartner-
report.
16
http://news.eyeka.net/2013/10/what-is-the-roi-of-crowdsourcing-eyeka-first-to-demonstrate-how-crowdsourcing-increases-
return-on-marketing-investment-through-case-studies.
17
http://www.crowdsourcing.org/editorial/eyekas-francois-petavy-five-predictions-for-crowdsourcing-in-2014/30116.
18
http://www.crowdsourcing.org/editorial/eyekas-francois-petavy-five-predictions-for-crowdsourcing-in-2014/30116.
19
Franke, Nikolaus et al. The ‘’I Designed It Myself’’ Effect in Mass Customization, Management
Science (October 16, 2009).
20
https://wcd.coe.int/ViewDoc.jsp?id=1410627.

Customer incentives and involvement 15