Times have changed. Customers now have enterprise-grade hardware in their pockets. Their voice is amplified across the globe by social channels accessible by everyone. They can innovate alone or in groups, independently or in concert with a company. As part of the “know me now” culture, customers expect companies to recognize the ideation occurring amongst them, no matter where it takes place. The difference is that now these innovations are easy to find and hard to ignore. Companies ignore the innovators in their customer communities at their own peril and their competitors’ delight.
This is a significant shift involving changes to a business model, organizational structure, information systems and culture. Of all of these, we are finding corporate culture can be the highest hurdle. The change has to start with executives buying in. Sometimes the challenge for executives isn’t the decision to embrace co-creation, but understanding what it truly means so they can successfully execute it.
What is Co-Creation?
Customers innovate for many different reasons. It may be to improve a product or service to fit an unfulfilled need they personally have. It may be done to fulfill needs of others, sometimes with monetary gain in mind and sometimes for recognition alone. It may be because they simply want to show creativity in a public way. The key to a culture of co-creation is understanding it is a continuous value exchange between the company and the co-creator. The company provides the product or service and the hidden complexities of product development, technology, distribution, and delivery. The customer provides insight into hidden problems, market opportunity, organic promotion and innovation at scale.
Co-creation is done in many ways, but most can be identified at a high level by where the co-creation process is led from. The key difference here is who owns the channel, and who initiates the co-creation ideation process. Both approaches align in different ways with the concept of putting your customers at the center of your innovation process. This aligns well with a new focus on customer-centric companies, detailed in “Outside In” by Harley Manning and Kerry Bodine of Forrester.
Company-Led Co-Creation
Companies that want to publicly invite customers to create with them will take steps to lead this process with customers. This positions the company as a visible, leading brand in the co-creation space amongst their customer base.
Creating a space for an online co-creation community or a mobile application that is branded with co-creation in mind is one way to facilitate this. Starbucks is one of the more well-known success stories following this approach. Over 200k ideas have been submitted through the My Starbucks Ideas platform built on the Salesforce Ideas product. Starbucks saw an opportunity to directly tap their passionate customer base for ideas to improve their products and services. Customers provide value with their ideas for new flavors, products and services and Starbucks returns value through an open process that results in the best ideas becoming part of the customer’s experience.
Another way for companies to lead the co-creation process while leading with value to the customer is to build an app that allows customers to perform complex tasks simply. The company gets returned value through the data in the interactions between customers and the app, and customer to customer interactions within the app. In our work with PPG to create the Voice of Color Room Painter we helped PPG create a platform for customers to interact in new ways with PPG products, while PPG collects data on customer preferences and product uses. Customers can now use this platform on the web, on mobile and on in-store kiosks to visualize PPG colors on the walls of rooms in their homes. PPG has removed the complexity of visualizing colors on your walls, and customers provide their photos, color choices and sharing amongst their social graph. PPG can use the data created here to analyze how customers choose paint colors, what colors are commonly used together, what colors are trending and shared most often, etc. This allows customers to use a tool to interact with the brand and participate in co-creation in a more subtle way.
Customer-Led Co-Creation
If a company chooses not to take the lead in co-creation, the customer will continue without them. We already know that customers innovate around products and services not for the sake of providing free R&D for companies, but to modify them to better fit their individual needs. This has been going on long before co-creation was a formal practice, and certainly before the social tools of today. Making a conscious choice to allow customers to organically lead co-creation can be the right decision, but it must be clear that this decision only puts the customer in the driver’s seat; there is no stopping co-creation. This is in line with the “Outside In” approach to putting Customers at the Center of your business.
Companies that allow customers to lead the process must then also decide to go where the co-creation is already happening. These can include social networks where fan pages or hashtags are used by customers to self-organize, message boards and other discussion sites, or even within the product review sections of sites like Amazon. Companies are usually thinking about observing conversations here, but unfortunately for most companies, they stop with passive listening. Those that are seen as leaders in this space have active staff who are ready, able and given time to join these organic conversations. Companies must also be ready to join as an equal participant, remembering they are on their customers’ home turf now.
Tuning into their customers’ conversations will also help companies identify their brand champions, the leaders of the organic, online communities who other users go to for peer to peer customer service and recommendations. These leaders may run product blogs, have large followings on social networks, host podcasts or even be published in mainstream publications. Building a relationship with these champions is critical for the customer-led co-creation process to fully grow. Once this relationship is built, these champions can be used as early product testers, grassroot promoters and finger-on-the-pulse weathervanes for your customer base.
Co-creation is an essential practice for companies who want to create a fiercely loyal customer base. Co-creation has the ability to happen without the company’s involvement. However ignoring it will likely to alienate customers and brand champions by letting their passion for your brand go unanswered. It also holds great potential for making the company vulnerable from competitive standpoint since breaking this value cycle between the company and the customers can set your product and service strategies behind significantly vs your more innovative competitors.
