Imagine you are leading a very successful charitable organization with deep ties to the local business community. You have strong brand presence both with businesses and individuals. Most of your contributions come from the employees at the region’s largest employers choosing to continuously donate a percentage of their paychecks to your organization until they retire or consciously decide to stop giving. This allows you to concentrate your fundraising efforts in other areas of growth, while this cornerstone of your charitable revenue rolls along, needing only scheduled maintenance.
Then the environment changes, seemingly overnight. Millennial employees start filling the ranks of these employers. They are likely to hold a dozen or more jobs by the time they are in their thirties. Your charitable organization, long reliant on relationships built on workplace connections, has no way to sustain a relationship with donors as they move in and out of employers. And you don’t have a way of connecting with donors directly in the ways other brands do through social networks and with consumer-grade mobile experiences.
What would your relationship with your donors look like if you had a direct connection? The answer is that customers require continuous, two-way exchanges of value to be engaged. What value will the company exchange with this new type of donor once the warm glow of a monetary donation wears off? Here are some ideas: What if donors were empowered to create their own giving campaigns? Would they see value in the ability to share common causes amongst their social graph, encourage friends to donate and to volunteer together? What if the organization provided the tools for donors to react instantly to a need they identified in the community like a flash mob? Would the organization increase the share of engagement if donors and volunteers were given more power? Would more causes, large and small, be served?
In our work with the United Way where we studied the millennials’ professional mobility and social behaviors, allowing the donors to create their own giving opportunities will provide a way to engage this new workforce while not alienating the existing donor base. The United Way’s executive leadership is forward-looking and culturally ready to pivot to this new business model without leaving those with traditional giving behaviors behind.
Whether a company's customers were consumers or business partners, customers have always wanted to modify products and services to fit their individual need better. Customers modified products or worked with service providers to adjust a service to their needs, but they toiled in isolation. This made these customer-driven innovations hard to find and easy to ignore.
Times have certainly changed. Every customer now has enterprise-grade hardware in their pocket. 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 and we will talk about the co-creation culture an upcoming blog post. 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.
As we previously discussed in the Four Imperatives of Customer Engagement, co-creation is an essential practice for companies who want to create a fiercely loyal customer base. Unlike the other imperatives, 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.
Stay tuned for our next post on why executives need to build a culture of co-creation within their organizations.
