Co-Creation

Production Through Co-Creation

Co-creation describes a production process in which the creation of a product is achieved through the cooperation of a company and private individuals. Since consumers are actively involved in the creation of products they also become the producers. Consumers can create products themselves, write reviews for example for hotels, or design products individually (also known as mass customization).

Co-creation can be used in many areas of a companies business. Examples include: Design, marketing, education, research and more. By becoming part of the process some customers can really bring valuable skills and ideas to the floor at little cost or effort to the company. However, there is always a fine line between encouraging customers and making them feel used. Making customers feel valuable and thanking them for their efforts will always go a long way, this includes small incentivization and having a mutual understanding before any effort is expended.

Benefits for Customers and Companies

Customers benefit from co-creation through the optimization of the product, more trust and reliability. This can be assured by customer ratings. The companies benefit from improved customer loyalty and simplified customer information. There will also be reduced costs in the development of new products. This collaboration between customers and companies enables a seamless design of products and services as both are usually wanting the same things. Allowing customers to have a large amount of input benefits companies by having instant market research. Customers benefit from feeling heard and creating a product they actually want. Co-creation will therefore result in more sales due to the market already desiring the product or service.

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Potential Challenges

Whilst co-creation is beneficial to companies and customers its not free from challenges. A company must be clear on these challenges before entering into any kind of co-creation with their customers. One risk is that by having customers consider current products or methods they may uncover some aspects of the company that seem negative or lesser than. This may make customers lose faith in the company or sour the brand image. Co-creation consists of two main steps: Submissions where customers submit their ideas and selection where the company chooses the best contributions. Unfortunately, some the of submissions will often be poor and the company will have to find a way to reject these ideas without upsetting customers. The company will also need to ensure the customers are incentivized, otherwise engagement could be poor.

Types of Co-Creation

Professor Aric Rindfleisch categorizes co-creation in marketing into four different types:

Collaborating: This is where there is open contribution that is customer-led. Examples of this would be open-source software like Linux. Whilst open-source software isn’t usually used in a commercial sense it can be used by some companies. In these cases, the companies have little control but pay others to improve their systems.

Tinkering: This type has less open contribution than collaborating. Customers can “tinker” with products and ideas but only to a certain extent and here the selection is company-led so they get the final say if their contribution is used or not. Examples would be things like mods in video games.

Co-Designing: This is usually where customers can submit their ideas within very specific rules or parameters set by the company. So whilst submissions can be made they have to meet strict standards. A good example is “Lego Ideas” a platform where people can submit ideas for Lego sets to be produced. If an idea is liked enough by the community Lego will produce and sell it.

Submitting: This type is the closest to standard product development. Selection here is all done by the company. Submissions can be extensive and again must be within certain guidelines. Those who have their ideas chosen are usually paid for their efforts.

The History of Customer Participation

It’s believed that the first study of customer participation in production (aka co-creation) dates back to 1979. In the 90’s those who studied this way of working saw a lot of value and beenfit within it. The actual term “co-creation” was coined in the mid to late 90’s in an article where the value of co-creation was studied. By 2000 the term was popularized in books and studied in even more detail. What became apparent was how co-creation could be helped even further by technology. By the mid-2000s co-creation was being popularized and adaopted by many companies.