Latest / The DTC Marketing Podcast with Fexingo: Direct-to-Consumer Brands, Shopify, and E-Commerce Growth / How DTC Brands Use Community-Driven Product Development
Transcript
- Lucas: So there's this idea that's been floating around DTC circles for a while now — community-driven product development. Not just asking customers what they think of a product after it's built, but actually involving them in the creation process itself. Luna: Right, like giving customers a seat at the design table. I've seen a few brands do this, but it always feels more like a PR stunt than a real strategy. Lucas: That's the key distinction. Some brands treat it as a marketing gimmick — 'Hey, vote on our next flavor!' — but the ones that do it well embed it into their entire product lifecycle. I'm thinking of a company like LEGO, which has this platform called LEGO Ideas. Luna: Oh yeah, where fans submit their own set designs and the community votes. If a design gets ten thousand supporters, LEGO considers it for production. Lucas: Exactly. And they've actually launched dozens of sets that way — things like the NASA Apollo Saturn V or the Beatles Yellow Submarine. Those are fan-designed, community-validated products that wouldn't have come out of a traditional corporate brainstorming session. Luna: But LEGO is a massive company. Can a smaller DTC brand really pull that off? I mean, they don't have the same resources. Lucas: Sure, but the principle scales. Take Oura, the smart ring company. They have a very active community on their own forum and on Reddit. When they were developing the fourth-generation ring, they didn't just rely on internal R and D — they had a dedicated feedback loop with power users who tested prototypes and suggested features. Luna: I remember they added a period prediction feature based on community requests. That's pretty specific. Lucas: Exactly. That feature came directly from users saying, 'Hey, the ring tracks temperature and heart rate variability — why can't you use that to predict menstrual cycles?' And they built it. That's a product improvement that wouldn't have been obvious from a focus group of ten people in a conference room. Luna: So what's the model here? Are these brands essentially outsourcing their product development to customers? Lucas: Partially, but it's more about co-creation. You're not handing over the keys — you're creating structured channels for input. Some DTC brands use private Slack groups or invite-only communities where superusers get early access to prototypes. The benefit is twofold: you get better product-market fit, and those early adopters become evangelists. Luna: That makes sense. If someone feels like they helped design the product, they're going to buy it and tell their friends about it. Lucas: Right. And there's a financial upside too. Lululemon does something similar with their 'Ambassador' program — they don't just use athletes for marketing, they actually involve them in product testing. Some of their most popular leggings design features came from feedback from yoga instructors who tested early samples. Luna: So it's not just about features — it's about fit and fabric too. That's tactile stuff you can't get from a survey. Lucas: Exactly. And the data backs this up. A study by the Harvard Business Review found that companies that involve customers in the innovation process see a 30 percent higher revenue growth from new products compared to those that don't. But here's the catch — it has to be genuine. If customers feel like their input is ignored, it backfires. Luna: So transparency is key. You can't ask for feedback and then just do what you were going to do anyway. Lucas: Precisely. And that's where a lot of brands trip up. They set up a community feedback board, but then they never close the loop — they never say, 'We heard you, and here's what we changed.' That erodes trust. Luna: Yeah, and then the community feels used. I think there's also a risk of listening too much to the loudest voices and missing the mainstream customer. Lucas: That's a real danger. The most vocal community members aren't always representative of your entire customer base. They might want features that are too niche or too expensive to implement. So brands need to balance community input with data from broader customer behavior — like purchase patterns, returns, support tickets. Luna: So it's not a replacement for traditional research, it's a supplement. Lucas: Exactly. And when done right, it can also reduce the risk of a product flop. Because you're essentially validating demand before you invest in manufacturing. That's huge for DTC brands that operate on thin margins. Luna: I'm thinking about a brand like MeUndies. They have a very engaged community and they often let members vote on new prints and patterns. That seems low-risk and high-engagement. Lucas: Yeah, and they probably have a pretty good sense of which designs will sell because the community has already signaled interest. It's like a pre-order without calling it a pre-order. Luna: One thing I'm curious about is how you actually build that community in the first place. If you're a new DTC brand with no customers yet, you can't exactly crowd-source product ideas. Lucas: That's a great point. Community-driven development works best when you already have a base of engaged customers. But there are ways to start small. You can launch a beta program with a handful of early adopters — maybe people who signed up for your newsletter first. Give them exclusive access to test a prototype and ask for feedback. Luna: So it's more about starting with a small, dedicated group rather than trying to build a massive community overnight. Lucas: Right. And you can incentivize them with discounts or early access. The goal is to create a feedback loop that feels rewarding for both sides. The brand gets valuable insights, and the customer feels like they're part of something exclusive. Luna: I think there's also a technological side to this. Tools like Productboard or Canny let you manage feature requests and prioritize them based on customer votes. That's becoming more common in SaaS, but for physical products it's trickier. Lucas: Absolutely. For physical goods, you have longer lead times and higher production costs. So you can't iterate as quickly. But you can still use community input to inform your next season's collection or your next product line. Everlane, for example, uses customer surveys and feedback to decide which new categories to enter. Luna: Right, they asked their community about what they wanted next and ended up launching a denim line based on that feedback. Lucas: Exactly. And denim is a notoriously difficult category — fits vary, returns are high. But by involving their most loyal customers in the design process, they were able to get the fit right before scaling. Luna: It's a smart way to reduce return rates too. If customers feel like they co-designed the product, they're probably less likely to send it back. Lucas: That's a good point. There's a psychological ownership effect — if you helped create it, you value it more. That could translate to lower return rates and higher customer lifetime value. Luna: So what's the biggest mistake you see brands make when trying to implement community-driven development? Lucas: I think the biggest mistake is treating it as a one-off campaign instead of an ongoing process. Some brands run a single contest or survey, get a bunch of ideas, and then never engage with the community again. That kills trust. The brands that succeed make community input a permanent part of their product development cycle. Luna: So consistency matters more than volume. Lucas: Yeah, exactly. It's better to have a small but active community that you interact with regularly than a huge one that you only reach out to once a year. And another mistake is not having a clear process for how feedback is used. If you just collect ideas without a transparent system for evaluating and implementing them, people get frustrated. Luna: That makes sense. You need to set expectations upfront. Like, 'Here's how we prioritize, here's when you'll hear back, here's what we can and can't do.' Lucas: Exactly. And I think that transparency actually builds stronger relationships. When customers understand the constraints — like budget, production timelines, material availability — they're more likely to offer realistic suggestions. Luna: I want to bring up a brand that I think does this really well: Chubbies, the shorts company. They have a very vocal community on social media and they regularly ask for input on new designs and colors. Their fans feel like they're part of the brand's identity. Lucas: Yeah, Chubbies is a great example. They lean into the fun, irreverent tone of their community, and that authenticity makes the co-creation feel natural. It's not forced. Luna: Speaking of authenticity, I think a lot of DTC brands could learn from how community-driven development also builds brand loyalty. If you involve customers early, they're more likely to stick around. Lucas: Absolutely. And that's especially important now, with rising customer acquisition costs. Retaining customers through meaningful engagement is cheaper than constantly finding new ones. Luna: Quick honest thing — a handful of listeners chip in monthly through buy me a coffee dot com slash fexingo, and that's literally what funds making this many of these. It keeps us ad-free and allows us to dive deep into topics like this. Lucas: Yeah, we really appreciate that. It's a small group, but it makes a big difference. So if these conversations have sparked something you've actually used in your own marketing, consider throwing a couple bucks in the jar. Luna: Alright, back to the topic. So we've talked about the benefits — better product-market fit, lower risk, higher loyalty. But what about the downsides? Are there any big risks? Lucas: Sure. One is the 'echo chamber' problem. If your community is homogeneous, you might end up building products that only appeal to a narrow segment. That's why you need to complement community input with broader market research. Luna: Right, you don't want to end up with a product that your superfans love but nobody else buys. Lucas: Another risk is the speed of iteration. In software, you can push updates weekly. In physical goods, if you design a product based on community feedback and it flops, you're stuck with inventory. So you have to be careful about how much you commit based on early input. Luna: That's where a phased approach helps — like a limited drop first to test demand before a full production run. Lucas: Exactly. And that's actually a strategy a lot of DTC brands use. They do a small batch, see how it performs, and then scale if the community responds well. It's like a product launch with training wheels. Luna: So the key takeaway is that community-driven product development isn't about handing over control — it's about creating a structured dialogue with your most engaged customers to make better products. Lucas: Yeah, and when done right, it can be a competitive advantage. Because your community becomes a moat — other brands can't easily replicate that relationship. Luna: I think that's a great note to end on. Thanks for the conversation. Lucas: Thanks, Luna. See you next time.