Chewing on Customer Feedback

This article was written by Gwen Moran of Entrepreneur.com

Kiddie Rides USA is pretty much what you'd expect -- a manufacturer of quarter-fed children's rides that sit in shopping malls and outside grocery stores around the country. That is what it was -- until the owner of a children's hair salon called the Denver company in early 2004.

"They were looking for fun, creative chairs for children to sit in while they get their hair cut," says Damon Carson, 34, president of Kiddie Rides. " [The idea] to mount the ride on a hydraulic lift came about because of this [salon owner's] own genius."

That simple idea has led to a three-year deal for Kiddie Rides USA to produce chairs for an entire chain of salons. Now Carson is actively soliciting more customer feedback to help him find new ways to expand his nearly $2 million company.

Reinier Evers, founder of Trendwatching.com, a Netherlands-based trend-tracking agency, has dubbed the trend of seeking direct customer input "customer-made," which includes companies engaging consumers in everything the company does, from product development to marketing.

"Consumers are more demanding than ever, and the mantra of 'marketing is a conversation' has finally become reality, thanks to the online world, where everyone -- consumers and companies -- engages in conversations about what is good, what is bad and what needs to be done," says Evers.

As evidence, he points to bigger companies getting into the customer feedback game. Last year, Boeing (BA - commentary - Cramer's Take) launched its World Design Team, an online group of air-travel customers and aviation enthusiasts who participate in interactive sessions, message boards and other information-gathering activities to weigh in on their flying preferences, which could affect future aircraft designs. Recently, category giants like Coors Brewing Co. and Dunkin' Donuts have invited customers to share their brand experiences as part of corporate advertising campaigns.

But haven't we heard about these consumer rules of engagement before (think Wendy the Snapple Lady from campaigns in the '90s)? You bet, says Evers, but the customer-made philosophy is moving from an interesting fringe influence to a mega-trend that all companies need to watch.

That's what Brian Smith is doing. Facing fierce competition from direct insurance writers like Geico and State Farm Insurance, Smith, president of Wilmington, Ohio, insurance brokerage Smith-Feike-Minton Insurance, knew he had to connect with customers who might easily be swayed by the 10% discount that direct writers could offer.

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Gwen is co-author of The Complete Idiot's Guide to Business Plans. For bios of and stories by Entrepreneur.com columnists, please click here. For more information about Entrepreneur.com click here.

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