The idea is of course not new and the importance of dialoguing with customers (and other stakeholders) is widely acknowledged (Ballantyne, 2004).

Co-creation research makes extensive use of dialogue and different stages can be recognized which represent a steady evolution from the early 90’s until today.

Whereas interactions were merely seen as a way to convey satisfaction, employee satisfaction and eventually increased loyalty in the 90’s, it has evolved into a dialogue of equals. At a later stage, with the customer entering the playground, a more active involvement within the firm’s internal processes was made possible. Today’s view on customer dialogue is based on an active participation of the customers. One could speak of participative marketing and some companies think that their success is based on their ability to make customers participate.

The example of software companies letting customers test their product is an evidence of the benefits of customer’s participation: the company can improve its products, the voice of the customer is heard and listened to, the buyers’ community enjoys a better product.

My Take :

Customer involvement seems to me so obvious and necessary that I still wonder how managers can rely on their own thoughts only to develop their business.

However what I don’t say is that customer involvement will lead to success. This is not true and too often consultants and marketing agencies try to convince their customers of the contrary. It is NOT because you’re doing focus groups, interviews and the like that your products will necessary be better. It is NOT because you talk to customers that they will necessary significantly more satisfied.

A long time ago Henry Ford said that customers could order from him any Ford T as long as it was black. The automotive business has since then changed a lot and has recognized that customers want to be treated individually. This shift was supported by the new possibilities offered by automation and IT. Today the customer can co-create its car among thousands of combinations.

In automated hotlines too the customer has to participate and navigate among a pre-defined menu to eventually find (or not) the solution he was looking for.

The common point of the two above examples is however that the search of a custom-made solution is limited by the firm itself which decides on the options made available to its customers. This process is therefore firm-centric and the customers are forced to choose within a pre-defined framework, not allowing them to unleash their full creativity.
Kalaignanam & Varadarajan’s (2006) example of the GE platform represents certainly a step forward in the mass-customization willingness of the firms. Although the customer must choose from GE products in this process, the possibilities seem to be less limited in that the customer is allowed to design his own experiment. Whereas in the automotive example the customer was intervening at the end of the R&D process (all components of the car had been designed, all manufacturing processes were set), in the example of GE the customer is empowered at a prior step in the process.

My take:

Don’t decide for the customers. Let them decide what best suits their needs within the limits that your business allow. Standardization and customization are not incompatible. It’s just the most extreme part of customization that ruins your standardization efforts and will prove unprofitable.

Have you actually every thought about what you can do to allow your customers to customize your products?

What is the common point between the Mercedes SLR Stirling Moss, the new fragrance launched by Unilever and a Raidlight backpack? All those innovations are the product of co-creation processes.
Co-creation processes begin to attract the interest of big companies as suggests a recent article published in Business Week (Wong, 2010). Co-creation is however not a recent concept as our research will show. It is about 40 years old and has evolved dramatically and taken many forms in the last 20 years.

The wording itself (“value co-creation”) is the recent evolution of an older wording used from the late 1970’s onwards: “value co-production”.

However there is no real agreement on what co-creation really is. I reviewed 40 years of literature and eventually divided co-creation processes in five categories. I will deal with those five categories in five posts on this blog.

Let’s begin with the first.

CO-CREATION PROCESS #1 : DO-IT-YOURSELF

The customer is in charge of the last step(s) of the process and is willing to play an active role.

Low-cost businesses (but not only) have these active co-creation steps rooted in their DNA. IKEA asks customers to pick up and assemble furniture to ensure that costs are kept minimal, most airlines are proposing (if not requiring) that customers check online, supermarkets are giving impatient customers the possibility to scan and check out themselves.
Examples are numerous and customers’ sensitivity to prices will only ensure that this trend goes further.

This co-creation process is the most ancient one and paved the way in the 70’s under the name “co-production”. It was a firm-centric view of how to collaborate with the customer and we will see in the next posts how it has evolved.