Many dotcom-era business plans based on “virtual community” crashed and burned. But some companies today have discovered that online communities for customers not only provide business value but also become a critical component of their customer relations, R&D and marketing efforts. That’s one key piece of consultant Patricia Seybold’s new book, Outside Innovation, which posits that companies need to engage customers in more innovative ways to help redesign products, improve processes and test business models.

The author of Customers.com and The Customer Revolution goes into great detail—using dozens of case studies from heavyweights such as Staples and Kraft, and lesser-knowns such as Koko Fitness—to get executives to wake up to her main point: The traditional company-customer relationship (“We develop products for our customers”) has flipped, and those who ignore this reality do so at their own peril.

This line of thinking requires a level of openness simply not found in many enterprises today—a faith that customers’ passion for your products and services will translate into revolutionary product developments and efficiency for you. In a sense, it’s R&D on the cheap.

Seybold’s examples are noteworthy for their innovations and financial returns.

Of course, companies can’t handpick customers, especially ones who want to strut their stuff for the company, so it’ll take a lot of work to vet the good from the bad, hammer out the relationship details and find suitable rewards for customers’ efforts. Much more work, it seems, than many firms are willing to put forth, Seybold says.