Today, the distance between a company and its stakeholders has reduced to such an extent that boundary lines demarcating suppliers, partners, customers and employees have almost disappeared. With the advent of Web 2.0 technologies and social media marketing, customers are demanding a bigger role in the value creation process. In a traditional enterprise, value creation was concentrated heavily inside the organization. Even the most customer focused companies engaged with customers only during specific moments, commonly known as ‘touch points’. Inputs to the product design came from customers during these moments of interaction which consisted mainly of market research surveys, focus groups or customer feedbacks. Based on insights developed within the organization, potential customers were targeted, segmented and marketed to.
What’s great about doing business today? Three words: Real Time Feedback. Thanks to Facebook and Twitter, you know about the success (or failure) of your product instantly. Whats even cooler? You don’t need to pay some marketing firm to dispatch surveys to your clients to get their feelings. People love to talk and do it freely – that is freely and for free. That’s where the co-creation model comes in. When you view your clients as ‘stakeholders’ of your brand, you can take their input and translate that right back into creating a better priduct. Enterprises who are willing to involve all stakeholders in the product design and production process would be able to derive several benefits such as:
- Get More Meaningful Insights: Unlike a market research exercise, which would be aimed at obtaining information about specific aspects of customer behavior, a co-creative enterprise would always have its ears to the ground. Insights obtained from social media platforms such as Facebook and Twitter would aid an enterprise in learning directly from the customer’s experience and behavior patterns.
- Innovate Better: When an enterprise is willing to open its doors to ideas from outside, it aids in the innovation process. Creative and value adding ideas may come from stakeholders not only about products, but also about other areas in the value chain such as product packaging, sales channels and even raw materials used. As the world becomes a global village, the idea of co-creation helps enterprises to incorporate global best practices into its processes at a much faster pace.
- Create Customer-Centric Products: Co-creative enterprises do not wait till a new product is designed and launched to obtain customer feedback. Instead, beta versions and prototypes are released to customers and other stakeholders for suggestions which are then evaluated and incorporated into the product. This helps to easily experiment with new product offerings and also to make the final product as close to the customers’ needs as possible. By allowing the customer to participate actively in the product design phase, it becomes easier to reduce the number of product variants that are produced. It also makes the selection process easier for the customer, as he has already invested his time on the product from a very early stage and developed an emotional connect with it.
- Generate Brand Loyalty: As customers start ‘owning’ the product from the ideation stage itself, the enterprise is able to build strong bonds and deep relationships with the user community. It also helps immensely towards developing a loyal user group for the brand. These brand loyalists would in turn become very strong product evangelists for the company. Another name for this point may be the ‘Look, I Made That’ premise.
- Cost Reductions: With talk of recession still looming, cost cutting is ahuge focus area for most companies. Co-creation as a philosophy of doing business makes good financial sense as well by helping to reduce the cost of marketing and the cost of product creation. Thus co-creation ensures that the company does not lose out its creative and innovative edge even when budget freezes are announced for marketing and product development activities. In short, your entire audience is your new 5 star marketing group.
- Risk Mitigation: Co-creation also allows firms to mitigate risks associated with product development to a large extent. As all stakeholders contribute ideas to creating the product, the chances of a product becoming a total flop is mitigated to a large extent. However, while sharing the risk of product development, enterprises must remember that, ultimately, the product ownership resides with the company and therefore, care must be taken to evaluate each idea and decide which ones would go into the product.
So let’s pretend you are reading this post and are completely jazzed about the above points. So how do you turn your old stoggy business into one that embraces co-creation? In order to transition smoothly into being a co-creative enterprise, firms need to fine tune their internal processes such that they are able to do the following:
- Listen Carefully: While most firms today have a presence in social media platforms, they often do not use them to listen carefully to the consumer. If you are a small business, I’d be willing to bet you either don’t have a Facebook / Twitter page or set one up because you ‘thought you needed one’ and they are basically dormant. It’s time to use these avenues for a greater marketing goal. These platforms can be used to push ideas and to talk about events and contests. However, if designed properly, social media platforms can really engage customers. Don’t neglect phone conversations either. If you are answering your own calls or outsourcing your inbound calls to call centers, make sure the receptionists are trained to ‘listen’ to your customers and not just act in ‘problem solving’ mode. Setup scripts where you get client feedback when you have them on the line.
- Analyze Effectively: Often, departments within an organization work in silos, thereby missing out a lot of the advantages of working together. Stakeholders may provide inputs to different departments based on whom they interact with. For example, a young customer may provide inputs to the social media marketing team or a supplier may provide inputs to the procurement team. It is necessary to develop a culture within the organization, which allows these suggestions and inputs to be collated and analyzed periodically, so that these form effective inputs to the product design team. So go order some hoagie trays, call a meeting, and get your creative minds working together.
- Prototype Often: In order for co-creation to work effectively, it is necessary that prototypes of the product or service are offered for feedback on a regular basis. This will help to incorporate the philosophy of continuous improvement into the design and development phase itself. And don’t think prototypes are reserved for actual ‘products’ as anything can be prototyped.
- Create Communities: Ultimately, co-creation is also about selling an experience and not just the product. Therefore, it is important to create platforms for interaction among all stakeholders. Creating strong communities and user experiences around your product is a great way in which you can generate brand loyalty and revenues, as customers discover new ways in which to use your product.
Are you ready to get co-creative? I hope this post got you at least thinking about the possibilities of growing your business my pooling resources outside of your own office. If you have experience with the above model, please drop some comments below & help start the conversation.
Recommended for YouWebcast: Sales and Marketing Alignment: 7 Steps To Implement Effective Sales Enablement