My parents faced a prosumer dilemma when my viola teacher in high school noted that for me to better compete on the national level as I had started to, that I'd need a higher quality instrument with a four-to-five-figure price tag vs. a three-figure one. In my teacher's mind, it was an investment in a future career. In my parents' minds, it was an expensive and unnecessary luxury. But my parents gave in, and purchased a beautiful viola that helped me sit 1st and 2nd chair in high school and college respectively, but doesn't help in my consulting career. My viola sits in my den now, waiting for the occasional request from my kids for me to play it.
I can't help but think that if a ZipCar for prosumer quality string instruments existed, everyone would have been better off. I spoke with Andy Fine of Fine Violins in Minneapolis, who says such a service doesn't currently exist as far as he knows. "It makes perfect sense that this service should exist, especially for up and coming students and musicians," he told me, "But I'm not aware of anyone doing it today." He confirmed that the typical model for the highest end instruments is for a benefactor to "loan" a $100,000+ instrument to a professional who uses and cares for it. For my limited music career, I would have been well-served by an intermediate option — my parents would have written a smaller check and my instrument would be employed by someone who can make better use of it now.
Prosumers are similar to super consumers in that they are a small portion of total consumers, but represent a disproportionate level of category profit, though at an even more extreme level. The main distinction is that a prosumer has either some professional training or career/economic interest in the category.
Prosumers can be the guide to finding unmet demand on the price/value curve. By finding distinct buyers who are willing to pay more, accentuating your product's cachet via the right professional endorsements, and finding key upgrades with minimal cost of goods or delivery system, you can command much higher prices. For example, UnderArmour provides athletic gear used by professional athletes to the masses. Almost Family provides professional hospital nursing care in the comfort of your home for a tenth of the cost. Costco and Sam's Club allow consumers to buy great quality and a better bulk price like a business wholesaler. Roche allows you to monitor and manage your own diabetes like a doctor.
Prosumers help unlock at least three different kinds of demand. First is when professional products are far superior to its consumer versions. Both UnderArmour and Roche are great examples of this. The average consumer did not have access to the quality of equipment that professional athletes and healthcare providers had, until breakthrough innovation created higher quality yet affordable options.
Second is when there the profession has badge value and cachet. Professional athletics certainly fits the bill with the emergence of professional race car driving schools ($2,000 for the day) and professional athlete fantasy camps (Michael Jordan's basketball camp cost $15,000 in 2010). Professional chefs have also grown in cachet, and hence so have professional kitchen brands like Viking and Sub Zero.
Third is when there is latent demand for do-it-yourself (DIY) vs. paying a professional. This can be when there is dissatisfaction with the professional quality or cost, or when there is inherent enjoyment in DIY. Home Depot and Lowes can describe both of the above. As might retail investor services, which has led to the rise of Schwab and E-Trade.
These last two areas of demand are key to why Prosumers are great for category creation, which I've previously defined as the intersection of breakthrough product innovation and breakthrough business models. Specifically, they're not just interested in the breakthrough product, but also have demand to be involved in the delivery of the benefit. Sometimes they want to be involved in manufacturing ("how you make it"), so they can customize it to their needs. They also want to be involved in distribution ("how you move it"), as BMW/Audi Prosumers who love to travel to Germany to pick up their cars from the factory for extra immersion before shipping it back home. They also are finicky about marketing ("how you market it")...sometimes the badge value comes from the product not being mass marketed, but rather endorsed by those in the know. And they are far more receptive to innovative pricing/profit model ("how you make money from it"). Subscription, service and other innovative pricing/profit models are very much in play, as it often increases the access to the benefits prosumers seek.
My experience is that Prosumers are usually lost in the shuffle, as companies focus on the vast consumer market or the big ticket big business/B2B market. But Prosumers can be a profitable, and innovation-driving, segment of your customer portfolio.
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