When Customers Become Fans by Jielin Dong and Yanli Zhang

Xiaomi Smartphones China

Xiaomi Inc., whose cofounders are shown here, has actively involved enthusiastic customers — known as “Mi Fans” — in both software and hardware development processes. Image courtesy of Xiaomi, Inc.

The Chinese technology company Xiaomi cultivates a close connection with its customers through a product development process that invites user participation — as well as through social media and fan clubs.

In less than six years, Beijing-based Xiaomi Inc. has become one of the world’s leading smartphone makers. One key factor is that the company offers its phones to customers in China at lower prices than competitors like Apple Inc. — and sells mainly via e-commerce to keep costs low.

But Xiaomi has done more than just keep costs down; it has also cultivated user pride through user-centered and open innovation, harnessing the energies of enthusiastic customers known as “Mi Fans.” Xiaomi actively involves “Mi Fans” in both software and hardware development processes. For example, Xiaomi’s Android-based user interface MIUI went through a fast-iteration development process. Xiaomi put the first version of MIUI online in August 2010 and set up an Internet forum to communicate with a group of tech-savvy users. In the first week, Xiaomi got 100 users who volunteered to test MIUI. Since then, Xiaomi has been releasing improved versions weekly for a group of its lead users. Customer involvement in the product development life cycle has not only helped Xiaomi reduce R&D costs but also enabled the company to cultivate a sense of participation and pride among tech-savvy lead users. They, in turn, spread the word to other users and generate enthusiasm about Xiaomi products.

Customer involvement in the product development life cycle has not only helped Xiaomi reduce R&D costs but also enabled the company to cultivate a sense of participation and pride among tech-savvy lead users.

Thanks to such enthusiasm, when Xiaomi was about to unveil its mobile phone in September 2011, there were already 300,000 MIUI users, many of whom then became the first batch of customers for the Xiaomi smartphone. Xiaomi has continued to cultivate user participation through its online platform, which by April 2014 had more than 10 million registered users, generating more than 1 million visits and more than 250,000 posts every day.

Xiaomi turns to the Internet as a major channel to communicate with its users. When the youth version of the Xiaomi phone was launched, Xiaomi designed a marketing poster that mimicked a popular movie but starred seven company executives. This poster was put on Xiaomi’s microblog page and reposted 2.0

ABOUT THE AUTHORS

Jielin Dong is a professor of innovation and entrepreneurship and director of the Center for Enterprise Innovation and Development at Soochow University in Suzhou, China. Yanli Zhang is a research fellow at the Center for Enterprise Innovation and Development at Soochow University and an associate professor of management at the Feliciano School of Business at Montclair State University in Montclair, New Jersey.

Read the Full Article: MIT Sloan Management ReviewMagazine: Winter 2016,Research Feature, December 14, 2015, Reading Time: 3 min

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