Organizations nowadays are grappling with the increasingly growing consumer base and their needs. In such a scenario, directly engaging with the customers is proving to be highly resourceful. In today’s blog post read how co-creation models are gaining prime importance and paving a way for a collaborative future.
What is Co-creation?
In Co-creation initiatives, businesses view customers as key stakeholders for ideation and strategizing. Keeping in mind a concrete goal, consumers with specific skillsets or characteristics are invited to collaborate with internal teams to generate ideas for new products/ services, define strategic changes, or help resolve pressing problems. It differs from crowdsourcing, which is an open call for ideas from all interested participants through an open forum, oftentimes with more noise and chaos.
Notable Co-Creation models in place today
- In-house labs: Leading organizations are creating co-creation labs using meeting rooms, virtual machines, prototypes and simulated environments to fuel innovation, where interested collaborators discuss topics and generate ideas.
- External co-creation resources: e.g. A popular cereal brand conducted its co-creation research in a school where participating students discussed and drew their choice of breakfast cereal this reportedly led to the development of a new product. Similarly, Indian companies are collating inputs from rural consumers to develop products for rural markets, using factors such as on-the-ground electricity situation as inputs for the workability of ideas.
- Co-creation initiatives on platforms like websites/mobile apps: e.g. An Indian e-commerce portal established a fashion co-creation platform where users could submit designs and gain designer credit, while the company gained unique designs for their catalogue. Similar examples are also being seen in other sectors, such as jewellery, where design is a critical factor.
- Outsourcing: Organizations not equipped to facilitate co-creation sometimes outsource co-creation activities to third-party specialists to recruit participants to conduct versions of the co-creation process.
All these co-creation platforms and models help in ideation, and provide crucial market insights into needs, trends, and preferences. They can also be amalgamated with other conventional forms of research and existing projects to provide valuable insights to create realistic solutions.
Benefits and risks of Co-Creation
Co-creation allows organizations to
- Tap into a skilled customer pool at a relatively lower cost
- Accelerate the strategizing process and explore new ideas and perspectives beyond what internal teams develop
- Generate multiple ideas, review and validate new initiatives often instantly or with reduced research and testing, eliminating incongruous ideas in shorter timelines.
This high degree of engagement helps build a strong sense of involvement, leading to more loyal customer base. However, it must be noted that, co-creation is not a perfect substitute for research. The process still requires professional experts to weave together the customers’ opinions, ideas and insights into viable and effective concepts.
Co-creation also poses certain other risks and challenges such as
- Potential loss of intellectual ownership of solutions,
- Risking the exposure of information and expertise to competitors
- Since co-creation is conducted on a small scale, solutions generated may not have expansive appeal. More than anything else, blindly pursuing co-creation without a precise goal might lead to a chaotic overflow of data.
How should companies take on Co-Creation?
There is a need for a structural alignment of organizational objectives before undertaking co-creation. The goals need to be clear and fit well with what the organization wants to achieve.
Incentivizing the customer participation should be of prime importance . It can be done using tangible modes like monetary rewards, company freebies. In other cases, acknowledgement and recognition alone might be enough, especially for the chance to collaborate and provide inputs for popular brands. It is also important to align the organization’s interest with that of the collaborator.
Additionally organizations need to address well, the risk of loss of ownership and control. The organization needs to put in safeguard after considering the value of intellectual property being created and the sensitivity of information available with its co-creators
Several organizations have already resorted to co-creation and many more will follow suit, in order to remain relevant in the dynamic consumer world. They will have to come up better strategies to recruit and incentivize customers into co-creating and innovating within the company. This will inturn lead to major market disruptions originating from this model in the near future.