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Every business strives for constant innovation or finding the best marketing strategy that will make it more attractive to the marketplace. But these cannot always be found within the company. The future of innovation is in collaboration with co-creation.
“You cannot solve a problem within the same thinking that created it” – Albert Einstein
Innovation means reaching new customers, understanding their expectations, evaluating business ideas and opportunities, and accelerating the development process. This also means shifting our perspectives regarding customers and involving them in the innovation process.
With the marketplace becoming more competitive than ever because of emerging digital players in global markets and increasingly high and constantly changing consumer expectations, a customer-centric strategy called Co-Creation is becoming more and more popular in companies around the world.
But what is Co-creation and why so many businesses are implementing it?
This business strategy focuses on the customer experience. It allows an interactive relationship with the company and encourages a more active involvement from the customer to create a value-rich experience.
Customers have become co-creators of value. When a customer is able to personalize their experience, they are experiencing more than just a monetary transaction.
In reality, they are actually positioning how the product or company will be viewed among their fellow customers. This enables consumers to increase the product’s utility without the company having to change their marketing approach.
A new relationship between companies and customers
Co-creation is breaking down the traditional barrier that exists between consumers and the company in order to create a desirable outcome for both parties.
On one side, customers benefit from access to co-creation because they get better products and have a higher chance of satisfaction. Their ideas and feedback on current product and services of the company as well as suggestions for the future of the business are being considered and in many cases adopted from the businesses.
On the other side, firms are increasing their margins by earning more revenue. They’re increasing their sales and saving money from not investing capital in projects that would not have been successful. A true win-win.
By including customers in the business process, new transparency will emerge between firms and consumers. This process will benefit both parties. The process will keep your businesses honest and allowing consumers to buy products that they can trust.
Successful examples of co-creation
“If people believe they share values with a company, they will stay loyal to the brand” – Howard Schultz, former CEO of Starbucks.
The company that probably best exemplifies the power of co-creation is the famous toy production company, LEGO with its ‘Ideas’ platform. This platform allows customers to be directly involved in the invention of its products.
After facing a difficult financial situation in the early 2000s, LEGO’s newly appointed CEO defined a fresh strategy in 2004 that led the organization in a new direction. The new strategy was driven by LEGO fans.
Ideas ask Lego fans to post their own designs for new playsets, with the projects that receive over 10,000 votes then being considered for production. As well as the sheer joy that comes along with creating their own set, the winner also receives 1% of net sales, giving them a monetary incentive for participation too.
For Lego, the benefits include guaranteed positive feedback (and the ability to see what kinds of products fans like) and a continuous pool of fresh and creative ideas to draw from. This strategy brought a big success for the company.
Taking the example, many other big companies such as DHL, BMW or Starbucks are using co-creation to keep their already recognized brand, but also many smaller companies take this step to get a place on the market and increase their customer pool.
Co-creation is involving the outside world in the best way and resulting in innovation and new ideas. It is a concept where the wisdom of the crowds is used to meet the crowd’s expectations and is definitely the future of business.