The Frito-Lay's “Do Us a Flavor” campaign is a brilliant example of using contests for marketing and product development. Yearly, Lay’s gives the public a chance to create their own potato chips flavor and then allows everyone to vote for their favorite flavor. The finalists get their entries made and sold in stores. (Thus, the results are truly measurable by sales – people literally "put their money where their mouths are".) The winning entry is made into an official flavor and the winner gets either $1 million or 1% of net sales for one year. The company increases their social media, consumer interest, and sales. Think of the data that Frito-Lay acquires including, e.g. segmentation – are there regional differences?, trends – are more entries for spicy flavors? Would Frito-Lay's have gotten the same results with just traditional methods such as surveys, test kitchens, or consumer panels? Absolutely not.
Traditional VOCs (“Voice of the Customer”) methods typically have a few people visit customers and either observe and/or ask them set questions. This can have drawbacks including: 1) small sampling based on already known customers/users, 2) labor intensive - requires at least 2 - 3 people per visit, 3) travel, financial, and time constraints, 4) interviewee(s) may be unable to share pertinent information or may not give you "honest" answers.
So if you need new ideas or looking to innovate, don’t keep it to a few customers, users, or employees via some closed door meetings. Need a better design? A new product or better product name? Worthwhile product features or enhancements? Generate some excitement and reach out to the world with contests. There’s no excuse with the internet and technology today.