So far we have looked at two examples of co-creation that change only the customer’s own experience of the product (mass customisation and real-time self-service), and one example where the customer helps to change the way a product is delivered (service redesign). But when many of us talk about co-creation and innovation we think rather of new product development.
Getting insight from customers to develop new products is not new – doing market research to identify needs and trends in the market, conducting focus groups to test reactions to concepts and ideas, or asking for feedback on existing product to identify areas for development. But all of these approaches to innovation are very much held and driven by the brand. They watch what the customer does, or asks them what they think, and then go away and develop a new product that they think meets these needs.
Co-creation is very much customer-led. Brands and customers work together to develop and design new products. The results can be very powerful and brands from Lego to Xerox have worked with customers in this way to create new products. You can read the story of Lego Mindstorms here.
Involving customers in this way involves some significant changes of process and attitude at the brand. Traditionally the customer sits outside the firm – they purchase the product and their only relationship with the firm is, essentially, a transactional one. Where new product co-creation is concerned, customers are involved on a much deeper level. Working with the brand to develop and design products which they may not even want.
Herein lies the significant difference between the types of co-creation we have seen so far. In each of the previous three types, the customer’s motivation for co-creating was that their own particular product or experience would be improved. In new-product co-creation, customers are working to improve the product overall, and to improve the offering the brand has to make to all customers. This works for three reasons:
- customers want to help and work with brands they know are listening to them
- customers want to solve problems
- all to often the solution or idea you need will be really simple to somebody else
These motivations are common to anybody working in customer-led innovation and co-creation. They’re also the same motivations we see at FreshNetworks for participation in online communities. In fact, online communities are a great way to co-create new products with your customers – they allow you to work together on a problem with people who care about your brand and in a space where they can easily share and evolve ideas.
The two examples of co-creation that we have looked at so far in this series have shown how customer and brand can work together to improve the customer’s own experience of the product. Neither mass customisation nor real-time self-service impact on the product experience of other customers. They change the product one time only and don’t input into the broader design and development of this product.
Whilst many companies may not want to involve customers directly in product design, one type of co-creation can see them working with customers on how the product is delivered – on the service. You’ll often find that the customer doesn’t distinguish between product and service and so involving them in this can be a great way of bringing them inside the company.
From Amazon to FedEx, many firms have taken ideas from their customers to develop the way in which they deliver their products to them. The co-creation site MyStarbucksIdea is positioned more to services than to products and seeks to get customer input into the way they enjoy the product rather than into the product themselves. In fact this is a great area for using online communities – exploring and understanding how customers use your product and then taking and seeking their ideas on how to deliver them to you better.
Focusing on service has the advantage of directing customer efforts to how the product is delivered rather than to the product itself. It is a way of the brand improving the customer’s experience without impacting upon the product itself. It is also a way to bring the customer inside the business. Helping them work with the brand on a part of the experience that matters to them most.
Co-creating service redesign lets customers work with the brand and change the experience without changing the product itself. It goes beyond the types of co-creation that focus only on the customer’s own product or experience but does not cause lasting change to the product itself.
The next example we’ll look at in the co-creation series will look at a type that does just that.
Mass customisation is at one end of the co-creation spectrum – each product is customised for the particular customer who is purchasing it. Unlike what we often think of as co-creation, the individual customer does not influence the product for others. But they co-create their own product with the brand to deliver a customised version.
There has often been an element of mass customisation in higher-value products (such as cars or houses). But the internet has allowed mass customisation on a broader scale and for a wider-range of products. Brands can work with customers to co-create certain elements of their product or sometimes more fundamental aspects of the product itself.
Dell allows customers to customise every single product it sells. This is co-creation on a very individual stage – each customer choosing from a set of options to customise and create their own perfect machine. Whilst this approach doesn’t mean that every computer is different it does dramatically increase the options and configurations open to the consumer. And it allows the consumer to work with the brand on the final design and assembly stage of the product to create something that is right for them. Levis on the other hand does allow a customisation process by which, in theory, no two pairs of jeans need ever be the same.
Mass customisation has only become a viable means of co-creating with consumers once the process can essentially become self-serve. The design of the manufacturing process is such that the customer can guide and control the final assembly stages and influence what their product looks like. They can work with the suggestions and process that the brand has laid out to achieve this.
Of course, this is really ‘co-creation lite’. Whilst it allows for customers to work with brands to tailor and refine their own product it does not input into product design of the brand experience of others. Whatever great combinations and suggestions that people have to customise their own product there is usually no overt and direct mechanism for this design to be replicated across the brand and made available to others.
There are examples of organisations that do this. Allow people to customise their own product but then work with others to decide which are appropriate for a wider production and a wider audience. This is stronger co-creation and will be the focus of our next installment in the Co-Creation Series.
- Guide on Niche Product Creation
- Distributed Mass Customization: Is Etsy the Next eBay?
- Guidelines: One size fits all or eventual move to mass customization?
A report from the Opinion Research Corporation in the US shows just how influential customer reviews on websites can be. More details of the report can be accessed here.
Perhaps the most useful statistic in the survey is that 61% of consumers will actively consult a review on a blog or website before buying a product. And even those who don’t actively look for these reviews are influenced by them. 83% of respondents said that if they read a review online it would influence their propensity to buy.
This is a very large proportion of consumers and shows again how important it is to allow consumers to review and discuss products online. If you provide these reviews on your site you are in a position to help to influence purchase decisions in this way.
As Leah Shea, an executive at Opinion Research, says:
Businesses today exist in an era in which it’s nearly impossible to escape the likelihood of being evaluated…there’s nowhere to hide. Companies must be extremely mindful of the power of proliferating online forums and their ability to shape consumer’s perceptions about brands. Even a single negative review, when posted in a very public forum, can have a significant impact on a prospective buyer’s decision to purchase.
Looking at the sector-level, it is clear that consumers are more likely to be looking for and being influenced by reviews when making travel and tourism purchases than they are for food or personal care. But across all sectors, the influence is high.
This report adds some weight to observations we have seen with our clients, that the use of customer reviews can have a significant positive impact on conversion rates. People want to consult reviews and these reviews often have a positive impact on their likelihood to buy the product.