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What happens when customers get clever? Whatshould a firm do when creative consumers start to

the dilemmas managers face, and the very differ-

had been around since the year 2000, podcast-ing really took off with the 2001 advent of

perhaps fearful of the copyright and digital

iPod owners (and to fans of podcasting), itseemed that Apple had, at first, discouragedpodcasting. At the very least, the company

KEYWORDSCreative customers;Firm stance;Strategic response;Diagnostics

Business Horizons (2007) 50, 3947ent strategies firms employ in dealing with thephenomenon:

! Podcasting is the distribution of audio or videofiles, such as radio programs or music videos,

property implications of its devices being usedto store and play content. It was not until mid-2005 that Apple began to include podcastingsoftware with its iPod products or make pod-casts available on its iTunes website. To manymodify products, hack code, and adjust services tosuit themselves? The following examples illustrate

Apples ubiquitous iPod. Yet, Apple was notori-ously slow in capitalizing on the phenomenon,1. When customers get clever over the Internet for listening on mobiledevices and personal computers. While the idea0007-6813/$ - see front matter D 200doi:10.1016/j.bushor.2006.05.005

* Corresponding author.E-mail address: lpitt@sfu.edu (L.F.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.When customers get cleveto dealing with creative c

Pierre R. Berthon a, Leyland F. Pitt

a Bentley College, Waltham, MA 02452, USAb Segal Graduate School of Business, Simon Fraser U6 Kelley School of Business, In

Pitt).: Managerial approachesnsumers

, Ian McCarthy b, Steven M. Kates b

versity, Vancouver, BC, Canada V6B 5K3

www.elsevier.com/locate/bushordeclined to comment on it in the early days ofthe phenomenon.

diana University. All rights reserved.

become sources of revenue, apart from being

P.R. Berthon et al.40! A member of the creative set, pink-hairedcomputer developer Jose Avila made furniturefor his apartment exclusively from FederalExpress boxes. When the Tempe, Arizona-basedcreator displayed pictures of the furniture on hiswebsite (www.fedexfurniture.com), however,the shipping firm promptly overnighted a ceaseand desist letter demanding that Avila take downthe website (Morrissey, 2005). While the requestwas honored, consumer comments on weblogspersist: bThis really brightened my day! Theletters are classic lawyer exchange. My husbandand I laughed and laughed. Lawyers jousting atwindmills...Q and bFedEx needs to lighten up.Jose is a bright and innovative young man, andinstead of making his life miserable, they shouldgive him a great job. With his kind of thinking,he can only improve the company....the firstthing he should do is fire the lawyersQ (http://www.bookofjoe.com/2005/08/fedexfurnitur-ec.html).

! Ron Grembans car looks like a typical ToyotaPrius hybrid, but in its trunk an additional stackof 18 brick-sized batteries boosts the carsalready high mileage with an extra electricalcharge so it can burn even less fuel. An electricalengineer and committed environmentalist,Gremban spent several months and $3000 tin-kering with his car. The additional batteries lethim store extra power by plugging the car into awall outlet at his home, all for about 25 cents.Although the Toyota Motor Corporation initiallyfrowned on people altering their cars, thecompany now says it may be able to learn fromsuch individuals. bTheyre like the hot rodders ofyesterday who did everything to soup up theircars. It was all about horsepower and bling-bling, lots of chrome and accessories,Q said CindyKnight, a Toyota spokeswoman (Molloy, 2005).

! In an attempt to create cool new things, the BBCis giving web developers and designers outsidethe organization access to its content. Calledbackstage.bbc.co.uk, this initiative gives peoplewho create computer programs, applications, orgraphics the chance to put their stamp on BBCdigital content. While the beta stage project isonly informal at the moment, it aims to drum upinterest and proposals for prototypes. Launchedin the summer of 2005, it has already garneredsignificant interest (http://news.bbc.co.uk/2/hi/technology/4538111.stm).

These cases represent four different kinds ofcustomer initiatives in four very different indus-tries, and four different corporate responses tocustomer inventiveness. The organizations reac-significant improvements.The modern business environment provides un-

precedented opportunities for customers to getclever. The Internet permits the rapid dissemina-tion and communication of customer innovations.Hobby programmers delight in improvising andimproving carefully written code. Modular prod-ucts, which embody high levels of reconfigurability,and inexpensive hardware (particularly in the formof computer chips and storage media) enableenthusiasts to tinker with technologies. Businessesneed to both create and capture value. Thedilemma is that creative consumers demand a shiftin the managerial mindsets and business models ofhow firms accomplish these two feats. We provide aframework for thinking about the phenomenon,which also enables managers to identify their owncorporate stance toward customer creativity, inorder to be able to develop strategies for dealingwith this.

2. Clever customers are not lead users

We define the creative consumer as an individualor group who adapts, modifies, or transforms aproprietary offering, such as a product or service.As a phenomenon, the creative consumer has along and illustrious history; indeed, it is as old asproducts and services themselves. The automobileserves as an excellent example of a product that,since its inception, has existed in a generallysymbiotic relationship with creative consumers.The early Model T Ford was regularly adapted byfarmers as a power source for driving generators,mills, and lathes. In the 1960s, motor racing teamBRM modified a jet engine to power a successfulLe Mans racecar; today, thousands of dpetroltions range from a simple early ignoring, to a threatof legal action, to a begrudging condescension, toan active embracing of customer creativity. Sowhat is a firm to do?

In this article, we explore the issue of creativeconsumers, those customers who adapt, modify, ortransform a proprietary offering. They represent anintriguing paradox for business. On one front, theycan represent a black hole for future revenue.Breach of copyright is rife, and the notion ofintellectual property is often treated with cavalierdisregard. There is also the distinct possibility thatcustomers who meddle with proprietary productscan produce something truly dangerous! On theother hand, creative consumers can be a gold mineof ideas and business prospects, as customersidentify opportunities and implementations that

When customers get clever: Managerial approaches to dealing with creative consumers 41headsT reprogram the engine management chipson their turbo cars to extract (sometimes fatal)amounts of extra horsepower! While the phenom-enon of the creative consumer is old, it hasreceived somewhat limited inspection by research-ers and business leaders. Only recently has itbegun to gain attention in the serious manage-ment literature. For example, Mollick (2005)refers to creative consumers as bundergroundinnovatorsQ (p. 21). While the author provides anexcellent framework by which to understand andcategorize these individuals, he leaves the readerguessing concerning what management should doabout creative consumers, apart from encouragingthem.

The related concept of dlead userT has been theprimary focus of management and researcherattention. The notion of the lead user was devel-oped some 20 years ago by von Hippel (1986), whodefined them as users whose current strong needswill become general in a marketplace months oryears in the future. Since lead users often try tofulfill the need they experience, they can providenew product concept and design data, as well. Intotality, the lead user is (1) a user of a novel orenhanced product who (2) faces needs that will begeneral in a marketplace, but faces them months oryears before the bulk of that marketplace encoun-ters them, and who (3) is positioned to benefitsignificantly from obtaining a solution (von Hippel,1986, 2005).

There has been a significant stream of researchinto these specific types of customers, directed atidentifying lead users (Urban & von Hippel, 1988);incorporating them into product design researchand gathering and analyzing their data (von Hippel,1989); comparing the lead user approach to moretraditional new product development techniques(Herstatt & von Hippel, 1992); the characteristicsof innovation, innovators, and innovation sharing inlead user environments (Morrison, Roberts, & vonHippel, 2000); performance assessment of the leaduser approach (Lilien, Morrison, Searls, Sonnack, &von Hippel, 2002); and the development of aconstruct of dlead usership,T defined as dleadingedge statusT (Morrison, Roberts, & Midgley, 2004).There have also been reports in the practitionerpress of how the lead user approach is structuredand applied in eminent firms, such as Johnson &Johnson (Luthje & Herstatt, 2004) and 3M (vonHippel, Thomke, & Sonnack, 1999).

It is important to note, however, that the twoterms dcreative consumerT and dlead userT are farfrom synonymous. If we compare and contrast theconcepts of creative consumer and lead user, thefollowing four observations can be made:(1) Creative consumers work with all types ofofferings, not just novel or enhanced products(the focus of the lead user). Creative consum-ers sometimes work with old, and even thesimplest, de-featured products. For example,although Apple ceased production of itsunsuccessful Newton PDA in the mid-1990s,there still exists today an active communitythat continues to find ways to change theproducts functionality, write software for it,and share their observations and experienceswith others (Muniz & Schau, 2005).

(2) Creative consumers do not necessarily faceneeds that will become general; rather, theyoften work on personal interests that canremain personal, or expand in use to a subsetof users. For example, consumers who usetheir car alternators to generate electricityfor their homes are likely to remain a minoritysubset! Indeed, the notion of dwill becomegeneralT is potentially a major problem formanagers working with lead users; managershave to identify those users they think willencounter needs that will become general.They also need to monitor and act upon theexploits and advice of these users, whilenoting that lead users can all too oftenmislead, a point well articulated in the workof Christensen and Bower (1996) and Chris-tensen (1997). Moreover, creative consumersoften innovate from a love of experimentationand creativity, not to solve some specificneed. In other words, while a creative con-sumers innovation can fulfill instrumentalneeds, it (the innovation) is not necessarilydriven by a need.

(3) Creative consumers need not benefit directlyfrom their innovations, although they mayobviously benefit indirectly through thanks,peer recognition, and so forth. This is oftenreferred to as bsymbolic capitalQ (Bourdieu,1977). Conversely to economic capital, themore one dgives away,T the more symboliccapital one accumulates in the form of pres-tige, status, and reputation. BMW now gathersthe ideas of its customers and invites the mostinspired among them to meet with its engi-neers in Munich on a regular basis. JoergReimann, the firms marketing innovationmanagement head, is quoted as saying, bTheywere so happy to be invited by us, and that ourtechnical experts were interested in theirideas. They didnt want any moneyQ (bThe Riseof the Creative Consumer,Q 2005, p. 75). Othersmay be the primary beneficiaries; this processcan be conscious (a consumer adapts or

P.R. Berthon et al.42modifies a product for the benefit of anotherconsumer or group) or serendipitous (aconsumer, while playing around with a prod-uct, produces a modification, which is adop-ted by other consumers). The open sourcesoftware community is replete with exam-ples. For instance, volunteers have created avery viable alternative to Microsoft Windowsin the operating system Linux, with nopersonal reward other than the kudos offriends and users, and, of course, the chal-lenge of solving a problem.

(4) Firms tend to use a formal and disciplinedprocess to find, screen, and select lead users.For example, von Hippel et al. (1999) describehow 3M involved many medical specialists indifferent environments, in a strict four-stageprocess to develop a new disposable surgicaldraping product. In contrast, creative con-sumers rarely ask permission to experimentwith a firmTs offering, and critically it is theywho select the product, the firm, and theinnovation. They certainly do not observe aformal process. Whereas the firm remains incontrol with lead users, the situation isreversed with creative consumers; this lackof control over the creative consumer canrepresent major challenges to some firms.

Lead users garnered managerial attention in the1970s and 1980s because they were seen as a viablemeans of reducing the risks and costs involved innew product development. The creative consumerphenomenon has only been given attention morerecently because a confluence of factors haspushed it to the fore. These factors include theadvent of the Internet, which allows connectionsbetween creative consumers and dissemination oftheir ideas; the programmability and malleabilityof software and components which have evolved inthe last two decades; and an overall cultural shifttoward customization and individualization (Pep-pers & Rogers, 1993).

While creative consumers and lead users are twodistinct groups of customers, there is potential foran overlap between them, especially when man-agement incorporates and adapts their ideas intoofferings. Creative consumers are generally moredifficult to manage, because their innovations tendto be more idiosyncratic and stochastic than leaduser efforts, which are more focused and controlledby the firm. Moreover, creative consumers areusually independent of the organization. Leadusers, on the other hand, are contacted by,communicated to, and the process of their inter-action with the firm controlled by, the organiza-tion. In short, creative consumers represent animportant and overlooked group. The reasons fortreating them strategically include:

(1) They exist, and are here to stay. As thetechnology in products becomes more andmore digitized, atomized, and interco-nnected, the potential for consumers to re-program, adapt, modify, and transformofferings also becomes greater. In simpleterms, this phenomenon is growing and willcontinue to grow.

(2) Creative consumers are a rich source ofinnovation; indeed, they are a hothouse ofimaginative ideas that the firm might nothave the resources or the time to cultivate byitself. They offer an alternative to formalproduct development programs, which surveyconsumer needs and preferences, and thendesign and manufacture corresponding prod-uct offerings. Creative consumers will simplyinnovate for firms, but are unlikely to tellthem about it. Thus, the challenge for firmsinvolves recognizing that creative consumersexist, identifying their actions, and under-standing how to capture and create valuefrom them. Ignoring or mismanaging creativeconsumers can lead to failure. At the veryleast, it may give customers the impressionthat what they say and do does not matter tothe firm. At a more serious level, the firm maylose out on innovative ideas and the revenuesthese can represent. At worst, firms couldfind that competitors do identify and exploitthe innovations that customers develop on thefirms offerings.

(3) Recognizing and utilizing creative consumersis a form of outsourcing, whereby the processof new product development is informallycontracted out to the market. In a self-governing manner, this enterprise is able toextend the life cycles of existing products byovercoming the boundary between designproduction and design consumption. The costbenefits are potentially much better than din-houseT innovation, but a significant risk isposed in that the R&D is done in public.Therefore, without appropriate processes forcapturing value from creative consumers,there is no guarantee that the firm thatoriginally developed the product will be theone that can successfully appropriate thevalue created by the creative consumer.There exists a substantial risk that compet-itors might be able to capitalize on theopportunities identified by creative consum-

application in practice. However, while lead users

mythology and characters. In response, Star Treks

When customers get clever: Managerial approaches to dealing with creative consumers 43and creative consumers have some things incommon, they are not synonymous. Studying leaders. That alone might be reason enough forthe firm not to ignore the phenomenon.

3. Consumer creativity does not equalcreative consumers

Consumer researchers have certainly not ignoredcustomer creativity; indeed, they have defined itand identified its traits, antecedents, and conse-quences. The problem is that almost all of theresearch has been done at a conceptual level.While this is laudable from a scholarly perspective,it tells managers little about how customers tinkerwith their products and what happens as a result. Italso gives them very little advice about what theyshould do. dConsumer creativityT (the study ofconsumer problem solving and creativity traits)and dcreative consumersT (the reality of howconsumers adapt, modify, or transform proprietaryofferings) are related but still very differentphenomena.

There is a strong stream of research in theconsumer behavior literature that has focused onconsumer creativity. This work was pioneered byHirschman (1980, 1983), who defined consumercreativity as the problem-solving capability thatmay be applied toward consumption-related prob-lems. The focus of consumer researchers hastended to be on the behavioral traits of creativeconsumers, and especially the factors that influ-ence the process of consumer creativity. Forexample, Moreau and Dahl (2005) have studied, inan experimental setting, how input and timeconstraints influence the way in which consumersprocess information during a creative task and howthose processes, in turn, influence the creativity ofthe solution. Also using experiments, Burroughs andMick (2004) have investigated the antecedents andconsequences of creativity in a consumption con-text. The authors find that both situational factors(i.e., time constraints, situational involvement)and person factors (i.e., locus of control, meta-phoric thinking ability) affect creative consump-tion, and that there is also interaction betweenthese variables. These research efforts are laud-able, yet they shed little light on what managers infirms should be doing to become aware of customercreativity, how they should define their attitudestoward it, and what actions they should take toeither encourage or discourage it.

In summary, the important notion of lead usershas received considerable research attention andcopyright owner, Viacom, vigorously pursued thesefans by releasing warning statements in the press,issuing legal writs, and closing down websites.Viacom was determined to protect and control itsintellectual property at all costs, and it seems thecompany has succeeded more than it might haveintended. In 2006, for the first time in over 20 years,there will be no cinematic reprise for the StarshipEnterprise.

In managing the Star Wars franchise, Lucasfilmhas preferred to tread a fine line between incor-porating creative fans and still controlling itsintellectual property through regulation. For ex-ample, a partnership with AtomFilms sponsors anofficial contest for independent filmmakers whocreate works based upon Star Wars. Further, StarWars Galaxies, a massively popular multi-playergame presented as a venture between LucasArtsusers alone does not provide comprehensiveanswers to firms that wish to become aware ofconsumer creativity, to develop a stance toward it,and to be able to formulate and implement actionplans regarding it. Similarly, the study of consumercreativity by marketing psychologists, mostly inlaboratory settings using student samples, yieldsmany important insights into what motivates con-sumer creativity and the environmental conditionsthat enhance it. The work, however, is not thathelpful to practicing managers. It certainly doesnot tell them what to do about creative consumers.Having defined and established the importance ofthe creative consumer, we now go on to explore thestances that firms adopt toward to this importantgroup; stances which, as we will see, range fromnon-management, to mismanagement, to proactivemanagement.

4. Stances: Of Treks and Wars

The two landmark stars of modern-day sciencefiction, Star Trek and Star Wars, provide contrast-ing examples of how organizations deal with theproblems and dilemmas posed by creative consum-ers, those customers who want to get a little tooinvolved for comfort. Star Trek (which started as atelevision series) and Star Wars (the ongoing moviesaga) have both had a major impact on contempo-rary culture. Yet, one is languishing while the otherthrives (Borland, 2005).

Star Treks battalions of fans saw the Internet as awonderful galaxy in which to indulge their love ofthe show, its icons, and legends. They built web-sites, published online stories, and created anddistributed amateur movies based on the Star Trek

and Sony, permits the design team to solicit play-ers feedback. Thus, Lucasfilm both recognizes andattempts to manage consumer creativity. In thehiatus between the culmination of the first trilogyof films and the second, more drawn-out, triplet ofmovies, the Star Wars fan base has burgeoned. Forthe franchise and its fans, the Force lives on.

5. Firms stances toward creativeconsumers

As mentioned previously, firms adopt a range ofstances toward creative consumers. Some see themas threatening and try to prevent them from beinginnovative with their products; others see them asan opportunity and actively facilitate consumerscreativity. In considering firms reactions to thisphenomenon, it is useful to differentiate using two

P.R. Berthon et al.44Figure 1 Firms stances toward creative consumers.axes: a firms attitude toward, and its action on,consumer innovation. Attitude toward consumerinnovation is a firms espoused policy or philosophyregarding the phenomenon in principle; it canrange from positive to negative. The espousedphilosophy typically reflects the mental mindsetof top management, but can also range from asubtle form of politicking to poor organizationalcommunication. Action on consumer innovationcomprises what a firm does once the phenomenonhas actually been detected. This can range fromactive to passive.

These two axes delineate a four-fold typology offirm postures to consumer innovation: discourage,resist, encourage, and enable. The four stances areillustrated with examples in Fig. 1, and are outlinedbelow.5.1. Discourage

In ignoring the podcasting phenomenon in itsinfancy, Apples espoused policy was, very evident-ly, one that did not welcome independent customerinvolvement in their offering. While the firm didnot choose to prosecute or to resort to legal meansin its efforts to thwart innovative customer use ofits products, Apple, in the early stages, did little tofacilitate the practice. In all likelihood, this wasbecause the firm was still pondering the legalramifications of using its iPod device to broadcastdigital content. Subsequently, this position hasevolved into a more proactive stance, with iPodplayers being shipped with legally approved pod-casting subscriptions and downloads as part of theiTunes package. We refer to this first stance asdiscourage. Under this stance, a firms attitudetoward consumer innovation is negative, but itsactions are de facto passive. In this instance, firmsverbally berate consumer innovation but take noovert action, which can range from ignorance, toreluctant tolerance, to an unreceptive internalreaction. Discourage is the default or initial stancefor many firms, and examples are legion. Forinstance, after Sony released the PSP (PortablePlay Station) game player, consumers soon beganhacking the proprietary operating system so thatthey could surf the Web, check emails, and runretro- and other non-proprietary games on thedevice. Sonys reaction was swift condemnation,but other than making crystal clear their attitudetoward the innovation, they took no further action(Hellweg, 2005). Similarly, hackers have turnedNintendos Gameboy console into a computerizedmusical instrument that can be used to playsurprisingly complex music. Nintendo would notcomment on the trend (Kushner, 2006).

5.2. Resist

FedEx not only disapproved of Jose Avilas furnitureconstruction methods and materials, it acteddirectly by serving him with legal instructions todesist and take down his website. This is anexample of what we term the resist stance. Whatdistinguishes this stance from the discourage pos-ture is that, while the firms attitude towardconsumer innovation is still negative, the firmsresponses are active. Thus, firms that adopt a resiststance verbally berate consumer innovation andback that sentiment up with punitive action. Thefirm actively seeks to minimize or eliminateconsumer innovations. A long-established embodi-ment of resistance is invalidation of warrantee. Inthe past, the Ford Motor Company refused to honor

that will require a firm to evaluate whether it has

When customers get clever: Managerial approaches to dealing with creative consumers 45warranties on vehicles that they suspected hadbeen adapted for alternative farming applications.Many Model T owners were farmers, who used thepower of the car, transferred through the rear axle,to drive small milling and threshing machines, andother agricultural equipment. Nowadays, as will beseen in a later example, Ford is more open tocustomer creativity. From warrantee invalidation,firms then move on to taking proactive legal stepsagainst innovating consumers. AiboPet is a ratherexpensive (around $2000) robot dog, marketed bySony, which can perform a number of pre-programmed tricks, such as following its owneraround and responding to voice commands. Sonyinitially sued consumers who had hacked theAiboPet operating system to make their cyberpetsdance, jive, and perform a wide host ofdunauthorizedT actions (Kohler, 2005).

5.3. Encourage

While Toyota was favorably disposed toward theexperimentation of Ron Gremban on his new Prius,the firm did nothing to actively assist him eitherfinancially or materially. It was content to sit on thesidelines and observe. This third stance is theencourage position. Under this stance, the firmsattitude toward consumer innovation is primarilypositive, but its actions are, again, de factopassive. The firm verbally lauds and applaudsconsumer innovation, but takes no overt action tofacilitate it. This stance is a positive but dhands-offTapproach to the phenomenon. Examples of theencourage position are becoming increasingly com-mon. For instance, Skype, the Voice-Over InternetProtocol (VOIP) pioneer, recently made it knownthat it was delighted with the innovation ofSkypecasting, a synchronized combination of pod-casting and live VOIP broadcast. While Skypeapplauded this clever use of its service, thecompany has made no modifications to the soft-ware to facilitate and further encourage thephenomenon (Biever, 2005).

5.4. Enable

When the BBC became aware that users wereappropriating and employing its content, theorganization decided to follow classic words ofwisdom: If you cant beat them, join them. Notonly did the BBC demonstrate its positive attitudeby making content freely available, it also activelyfacilitated the use of this content through theprovision of software and other tools. The fourthstance is enable. While the enable stance shareswith the encourage stance a positive attitudethe appropriate stance for the set of environmentalcircumstances under which it operates. Legal,branding, and strategic considerations will beparamount, as well as a consideration of theresources available.

There may be good reasons to follow a discour-age stance. For example, when a firm is notpositive toward a particular form of consumercreativity (perhaps for good reason) but wishes toavoid the bad publicity that acting like a bullymight cause, it can adopt a discourage posture. Insituations in which the consequences of consumercreativity could be more severe, however, the firmmight actively resist. It is not clear why FedEx hasresisted Jose Avila, and the publicity surroundingthe case has, indeed, made the firm appear to betyrannical. It could be, though, that the firm simplywishes to avoid possible litigation that might resultfrom injuries caused by furniture that was notintended to serve that function. There are alsocases in which brand protection is paramount. Inthe case of Mattel, Inc. versus Susanne Pitt, thetoward consumer innovation, it differentiates itselfin that the firms posture is overtly active. In thisinstance, firms cheer consumer innovation andback words with deeds to actively help consumersinnovate with their products. This is very much adhands-on,T positive approach to the phenomenon,one which can be seen amongst leaders in thegaming industry. Faced with consumers hacking intothe encrypted software of their popular game,Half-Life, Valve Software took the overt, positiveaction of releasing the code to the community. Theresult was the creation of Counter-Strike, the mostplayed online game in the Internets history(Hellweg, 2005). The Ford Motor Company alsoseems to have changed its stance since the days ofthe Model T and is working with individuals such asChip Foose, who enjoyed such success modifyingFord Mustangs that he started his own business,Foose Design. Beyond being supported by Ford,Fooses modified cars are displayed by the auto-maker at motor shows and are sold throughselected Ford dealers (Sawyer, 2005).

6. Which to choose?

It would be ideal if there was done correctT stancein the matrix (see Fig. 1); that would make it simpleto follow and easy to implement. Like mostimportant and complex issues in management,however, there is no simple and easy solution.Rather than provide straightforward answers, thematrix should, instead, prompt a series of questions

becoming less common, it is still widespread.

hands-off approach or actively engage with the

P.R. Berthon et al.46Consider, for example, P2P networks. Peer-to-peer(or P2P) computer networks rely on the computingpower and bandwidth of the participants in thenetwork, rather than concentrating it in a rela-tively low number of servers. Such networks areuseful for many purposes. Sharing content filescontaining audio, video, data, or anything indigital format is very common; real-time data,such as telephony traffic, is also passed using P2Ptechnology programs. Successor to Napster, themusic file sharing program Kazaa was quicklyadapted by enthusiasts to transform the openprotocol (whereby anyone with the software couldmakers of the Barbie doll sued a woman who hadtransformed a childs toy into an adult parody:bDominatrix BarbieQ (Mattel, Inc. v. Pitt, 2002).Firms that follow the encourage stance might do sobecause, while they support the process, they donot wish to spoil the spontaneity of consumerscreativity efforts by getting too involved; rather,they would prefer to observe passively and cheerfrom the sidelines. Finally, in the case of firmsadopting an enable stance, the intention is toengage and promote creative consumers as muchas possible, and to benefit from the innovationsthat flow from this.

7. Capturing and creating value fromcreative consumers

Creative consumers comprise a more generalcategory of offering innovators than lead users.When creative consumers innovate, they eitherbenefit from their innovation in terms of newfunctionality and new applications, or they simplyenjoy the thrill and challenge of experimentingwith and altering a firms offerings. They do notmerely buy and obediently use products or watchother consumers struggle with product inadequa-cies. They have a curiosity that drives them tobecome participants in the evolution and destiny ofthe offering. Predicting and identifying creativeconsumer activity may be difficult, but a typologybased on possible firm stances and actions towardcustomer innovation can help in the diagnosis andformulation of strategy. Whats a firm to do? Wesuggest three things: be aware, analyze, andrespond.

7.1. Awareness, analysis, and response

Ironically, many firms are blissfully unaware thatconsumers are modifying their products. Although,with the advent of the Internet, this ignorance isphenomenon?QFinally, as soon as management is aware of the

phenomenon and has analyzed it extensively, aresponse is required. The response should beunambiguous and send appropriate messages toall stakeholders. Employees and shareholders willwant to know that while their intellectual capitaland other assets are being protected, they alsowould not run the risk that the firm will make apublic relations fool of itself by antagonizing themedia and appearing to be an unfeeling bully. Thepublic at large is entitled to having its concerns forsafety considered by responsible management,when technology tinkerers threaten to get out ofhand. Creative customers might want to know whentheir genuine efforts are rightfully applauded andappreciated. When their inventiveness is regardedas harmful and threatening, they also need to beinformed in no uncertain terms of the consequen-ces of their behavior.

8. Final thoughts

Traditionally, firms have paid little attention to thephenomenon of creative consumers, but we pro-pose that this can no longer be the case. Thecreative consumer is likely to be an increasinglyimportant force for change and innovation in manymarkets. Consequently, firms must enhance aware-ness of their creative consumers, analyze theirimpact, and formulate an appropriate response. Wehave provided an initial framework for carrying outthis strategic analysis. As firms have varyingsituational factors, strategies, and offerings, theirresponse to creative consumers will also vary.Managers should therefore recognize that Fig. 1 isnot a bone-size-fits-allQ set of four solutions, butlink and join the network) into a series of closedprotocols (whereby outsiders were excluded andmembership was closed). Thus arose the bDarknetQphenomenon, a burgeoning parallel universe ofinvisible networks, of which the original protago-nists of the P2P movement were idyllically igno-rant. The first task of management, therefore, isto be aware. They may take the first step byasking themselves: bAre consumers adapting ourofferings, and in what ways?Q

Once managers are aware that their offeringsare being adapted by consumers, they shouldanalyze the phenomenon. This is where the matrixoutlined in Fig. 1 is essential. Relevant questionsthe firm must ponder include: bWhat are theimplications for the firm?Q, bShould our attitudebe positive or negative?Q, and bShould we pursue a

rather a framework for (1) understanding thatcreative consumers exist, and (2) for developingan appropriate strategic response based on the

Herstatt, C., & von Hippel, E. (1992). From experience:Developing new product concepts via the lead user method:A case study in a dlow techT field. The Journal of ProductInnovation Management, 9(3), 213221.

Hirschman, E. C. (1980). Innovativeness, novelty seeking, andconsumer creativity. Journal of Consumer Research, 7(3),283-195.

Hirschman, E. C. (1983). Consumer intelligence, creativity, and

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Leyland F. Pitt acknowledges the support of anSSHRC Grant, 2005.markets, and consumers evolve, there is likely tobe a migration between stances. Responding to thethreats and opportunities of creative consumerswill require firms to manage a three-way fitbetween:

(1) A specific stance toward creative consumers;(2) The relative ability and desire of consumers to

adapt, modify, and transform their products;and

(3) The firms ability to scan, track, and controlconsumer-produced innovations.

Firms that are able to master this fit andproceed to collaborate with creative consumerswill discover an innovation and marketing capabil-ity that integrates consumers into their organiza-tion, one that presents enormous potential tosuccessfully co-develop and even share intellectualproperty.consciousness: Implications for consumer protection and edu-cation. Journal of Public Policy & Marketing, 2(1), 153170.

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When customers get clever: Managerial approaches to dealing with creative consumersWhen customers get cleverClever customers are not lead usersConsumer creativity does not equal creative consumersStances: Of Treks and WarsFirms' stances toward creative consumersDiscourageResistEncourageEnable

Which to choose?Capturing and creating value from creative consumersAwareness, analysis, and response

Final thoughtsAcknowledgementReferences