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Saturday, July 30, 2011

Top 3 Co-Creation Benefits that Companies Experience


Based upon my own observations, as a beta test user of the original Dell IdeaStorm platform four years ago, I witnessed three primary benefits from customer co-creation activity -- new product or service concepts, existing product or service enhancement, and business process or marketing related suggestions.

eMarketer reports that those three scenarios are still valid. Customers want to form meaningful relationships with a select few companies that they care most about. Given today's consumer culture of increased online participation, savvy business leaders are rising to the challenge, realizing that customer collaboration can be very rewarding.

"Co-creation begins with focusing on customers," said Jeffrey Grau, eMarketer principal analyst. "Companies tend to take an inside-out approach to co-creation, but those that take an outside-in approach -- by listening to and observing customers -- are in a position to discover ways to create mutual value."

Customer co-creation initiatives typically focus on the early product development stages, as seen in a 2011 Frost & Sullivan survey mainly of B2B technology companies. Idea generation was the most common application of their crowdsourcing activities.

Many companies restrict their co-creation engagement to discrete moments in the product life cycle -- from product creation and refinement through the end of the sales cycle. Each interaction is a opportunity for customers to build peer-level community relationships and develop meaningful brand loyalty.

At later stages of the product life cycle companies can harness the power of co-creation to help customers make greater use of their products or services -- and in some cases create totally new applications.

Some companies already have active communities where customers can ask product questions and find answers to common problems. This provides a direct benefit to users who need help with a question, but it also builds community among power users or brand advocates.

Survey respondents to the December 2010 "Social Customer Engagement Index" from The Social Customer and Society of Consumer Affairs Professionals revealed that Facebook and Twitter were the most effective customer service channels for engaging customers.

The reason these sites were most frequently chosen is likely due to the fact that some problems can be addressed in short messages. To provide a deeper level of customer support, however, companies still rely on company-owned online platforms that allow for more substantive interactions.

The greatest untapped opportunity for ongoing customer co-creation, in my opinion, is in the areas of business process enhancement and marketing or sales related evolution.

As an example, managers in customer service roles can learn where they are alienating their primary stakeholders with bad policies and practices. Marketing managers can discover the key stakeholder segmentation clusters that have unique needs and wants, or new ways to make it easier for customers to find and buy best-fit offerings.