The Definition of Co-Creation
The Definition of Co-Creation
What is co-creation?
Co-creation is when businesses include outsiders in the ideation and development process. Most companies keep new products and processes strictly internal; some even work hard to keep them secret.
But co-creation lets companies collaborate outside the business to gather fresh ideas and break from their own status quo. They acknowledge that they don’t have all the answers in-house, and they make it easy for others to bring the answers to them.
This idea is nothing new. In fact, the term was popularized by a Harvard Business Review article in 2000. In this article, the authors focused on the relationship between a business and its customers:
“Thanks largely to the Internet, consumers have been increasingly engaging themselves in an active and explicit dialogue with manufacturers of products and services.”
And it’s true - most of the time we think of co-creation between a company and consumers. But co-creation can also include:
The goal is to approach issues from a new perspective and come away with better products and processes. And while most businesses will feel more comfortable working with current customers, there may be more opportunities available elsewhere.
How do you co-create?
As we’ll see shortly, there are plenty of different ways to make outsiders part of your ideation and development processes. In fact, many “old fashioned” research and development techniques - focus groups, surveys, and polls - are co-creation efforts in their own right.
But modern software like Braineet Crowdsourcing makes it easier to involve employees and customers earlier in the process and at scale. Social media, internet forums, and online portals mean that co-creating can occur at every stage of the development process - from the initial idea, through to reviewing products once they hit the market.
Businesses need to find the most direct way to involve customers in product innovation. In many cases, the simplest solution is to use a platform where users can suggest ideas, give feedback to one another, and stay connected to all co-creation projects.
This is a great way to build an endless stream of new product ideas. But it also builds brand loyalty and will increase customer satisfaction in the long run.
When buyers feel that they’re being heard, they naturally become more invested in the success of your business.
What are the benefits of co-creation?
A well-designed co-creation process is a step towards creating value all across the company.
Here are five clear ways that your business stands to gain value:
1. Better products based on customer desires
The most obvious (and likely best) reason to invest in co-creation is to make something new. Every business wants to be unique, to blaze a trail, and to disrupt. But with the same voices always pitching similar ideas, you’re more likely to end up with variations of what you already produce.
Co-creation brings in new viewpoints to help businesses disrupt themselves. You don’t have to predict what consumers or influencers are going to want - they’ll tell you themselves.
And the result is new products that reflect the way that real consumers think.
In one study, 61% of businesses said that co-creation leads to more successful products. It may take a little more energy than simply updating last year’s range, but the reward can be far more significant.
2. Better financial performance
This is probably all you need to hear: co-creation efforts are consistently shown to be good for your bottom line.
51% of businesses say co-creation improves financial performance. Companies save huge sums on research and development, marketing costs, and see lower customer churn.
Take DHL for example. According to Forbes, executives were initially sceptical that crowdsourcing ideas would bring any value. But “the result has been well worth it. CSAT scores are over 80% and on-time delivery performance is 97% or higher worldwide. Customer churn rates are down and revenue from new services and products is up.”
The Parcelcopter is a famous result of DHL’s co-creation process.
On top of pure revenue, 54% of businesses also say that co-creation improves social impact. Customer co-creation helps to bring your community closer to the business and builds stronger ties with fans and buyers.
Which of course leads back to more revenue in the future.
3. New and unexpected ideas
One of the biggest inhibitors to corporate innovation is specialization. On its face, it makes perfect sense that employees should be bona fide experts in your company’s products and processes. That’s why companies tend to hire staff who’ll fit right in.
But if one of your goals is to create new and exciting goods, or to overhaul your current product development, your in-house experts may be too accustomed to the way they’ve always worked.
By definition, co-creation brings new voices and ideas into the fold. These may not be the kinds of people you’d normally hire. In fact, the best ideas can come from totally alien industries, or from people with no subject matter expertise at all.
Provided you’re open to their submissions and willing to consider each on its own merit, you’ll be able to approach issues from a whole new perspective.
4. Making the consumer part of the creation process
From a purely bottom-line perspective, co-creators are truly valuable. You essentially increase your workforce without adding to payroll.
That’s exactly what Cigna has done, developing dozens of new products through a three-step process:
5. Removing barriers between industries
The “silo effect” is a popular concept in businesses all over the world. Mostly we think of silos existing between different corporate teams - your marketing team is siloed from sales or product, for example.
But the silo effect exists between industries as well. A software company doesn’t think about the latest trends in retail or delivery. It hires staff with a specific set of skills, which they narrow and refine until they’re exceptional in their area of expertise.
Working with co-creators brings brand new skills into the company. You may not even realize how a supply chain expert or mechanical engineer could help you design the next great handbag, tea bag, or sleeping bag.
The beauty is, you have access to these skills with no risk. And if their ideas are no good, you simply move on to the next one.
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