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Johnnie Moore is a marketing consultant and facilitator based in London. As well as 20 years of marketing experience he's trained in psychotherapy, NLP and Improv. Find out more at his blog.

Andrew Lark's more than 18 years experience of all facets of marketing, branding, sales and communications spans technology, Internet, telecommunications and consumer sectors. There he has led award-winning programs and teams for brands such as Dell, Sony, SBC, IDSoftware, Nortel, Microsoft and Sun. He is a thought leader and innovator on the convergence of brands, communications and social networking technologies. Find out more at his blog.

Jennifer Rice is a strategist and evangelist for relationship-centric brands. She brings 15 years experience in brand strategy, customer insight and marketing communications, and has worked with companies such as Microsoft, Verizon, Alcatel and Corning. Her current passion is exploring how brands are being impacted by blogs and other social technologies. Her company blog is What's Your Brand Mantra?

John Winsor is the author of Beyond the Brand: Why Listening to the Right Customers is Essential to Winning in Business and the Founder/CEO of Radar Communications, a consumer-centric consultancy. You can find out more about him at Beyond the Brand.

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« Sorry I'm Late! | Main | More on co-creation... »

February 09, 2005

What is co-creation?

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Posted by Jennifer Rice

Alright! We're already getting into some juicy conversation in John Winsor's recent post. There's a comment that I'd like to bring to the forefront because it's an oft-misunderstood idea: co-creation.

"...good products are good products, they don't need transparency or co-creation. Co-creation is what people on the outside want when they want to associate themselves with cool products. You don't let the slimy masses in to medocritate the product, you keep them striving to be a part of the clique."

There are different levels of co-creation; how far you take it depends on your product and industry. Here are a few terrific examples of deep co-creation:

1. Open-source software. No explanation needed.

2. Google's new API for online ads. An article in eWeek reports:

"There are a lot of things Google hasn't thought of that people could do with their ad campaigns," said Nelson Minar, a Google software engineer. "One of goals is to enable advertisers and third parties to create tools for their own purposes."

3. Lego's Lego Factory, where kids design new Lego models using a Digital Designer and submit them to competitions. This is a primary source of ideas for new Lego products.

In each of these cases, no one made assumptions about what customers wanted. Customers were brought directly into the process. In shallower levels of co-creation, customers aren't directly involved in designing products... but companies still seek to understand customers' mindsets, desires and unmet needs.

Apple is one of those anomalies where one man had an aesthetic vision, created a company and products in his own image, and everyone jumped on the bandwagon. If you think you can replicate Apple's success in this fashion, go for it; but I'd suggest that some form of co-creation is infinitely easier. BTW, I do believe that Apple's brand is a form of co-creation: the "in-crowd" that formed around the Apple brand was created by customers, not by Apple.

Companies who view customers as "slimy masses" can never be successful in the long run; it is those customers who make corporate existence possible. Customers smell arrogance like a dog smells fear. Microsoft is a great example of a company who became incredibly successful based on following their own vision... which ultimately resulted in customer resentment. Now with over 1200 Microsoft employees participating in the blogosphere, the company has actively, publicly entered into dialogues with customers. Robert Scoble gets a ton of suggestions from customers and passes them on to the right folks internally. Microsoft is beginning to co-create.

Does this mean we should always do what customers say? Of course not. But we should always be listening to them to ensure that our products and services maintain relevance in today's rapidly changing environment. We design products and services that people will buy... and we find out what people will buy by listening, observing and participating in dialogues. There's a terrific example of this in the book "Hardball" that discusses how Whirlpool co-created their new line of appliances by deeply understanding the life of a woman named Gail.

If anyone has other examples of co-created products and services, I'd love to hear about them. This is a tidal-wave trend; customers want to be heard, and they will buy from those companies who demonstrate a willingness to listen. Sure, we could say that co-creation is just pig lipstick for customer research... at the shallower end, perhaps. But the concept of co-creation goes much deeper and farther than the traditional idea of research. In co-creation, customers truly feel like they are a part of the company (family, ecosystem, etc.) and that their voice is heard.

Comments (19) + TrackBacks (1) | Category: Co-creation


COMMENTS

1. PXLated on February 9, 2005 12:46 PM writes...

Hmmmm...still seems like just a new buzzword. Will be interested to see this fleshed out more. I think the "family/ecosystem" concept may work in some industries/products. Not sure how broadly it can be applied is all. :-)

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2. Okay, that's better... on February 9, 2005 03:14 PM writes...

First, let me provide apologia for my ascerbacity of ealier remarks under the nom de plume "Too smart for this BS". I like to be controversial and I thought I'd stir up the pot a little because I know the Apple story VERY well. And, if anything, it is the exact opposite of co-creation.
iPod/Tunes/Life are the brainchild of an organization that extends the credo of a founder (and singular personality): Steve Jobs. Jobs' genius lies in being able to *really* stich technology with human interaction at a level that isn't duplicated elsewhere in the advanced consumer electronics space. It is precisely because Steve didn't follow the heard that Apple is regaining success. In fact, I believe that Steve is smart enough to know that customers often don't know what they really want or what they want lies outside the capacity of capitalistic economics.
Company: What would you like Mr. Customer?
Customer: I dunno, how about a computer that can accurately forecast stock prices that doesn't cost me anything.
Pfffft!!!! Whatever!
The whole *point* of a company is be an expert in its *thing*, whatever that thing may be. Apple takes its role as an expert in computer electronics and digital media very seriously. They're so good they can tell the consumer: "We have delivered the single best product that's available today that will allow you to listen to music digitally within the confines of the capitalistic and legal system."
If you were to ask the customer, the customer would say (and in fact often did say): "I'm not paying for music, I can download it for free on Kazaa."
Well we know who won that battle.
My point is that consumers are often ignorant and basing your product decisions on their studies can be dangerous.
I noticed that you've now modified co-creation to be more of a consumer dialogue. This makes sense, obviously. But if the point of coining the "co-creation" term is to tell companies to talk to customers, then I don't see much value-add in concept.
I think the real thread is developing rules for when you're customers are right v. when they are wrong. But leftover remnants of "The Customer is Always Right" still capture many executives attentions. In practice, the customer will try to get away with whatever they can. Getting the customer to agree to product that fairly rewards the company while fulfilling explicit and implicit needs seems to be much more interesting (and difficult) task.
Cheers!

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3. john winsor on February 9, 2005 06:33 PM writes...

Great comments. I agree with you that co-creation is about a deeper dialogue. The concept isn't "the customer is always right." That doesn’t work. It’s not about being customer lead, it’s about being customer inspired. What drove me to write my last book, Beyond the Brand, was my admiration for several of the companies I've worked with over the last couple of decades. Two, in particular, Nike and Patagonia, caused me to develop my thoughts about co-creating from the bottom-up.

The thing I like about both of these companies is that, while all of the buzz is about what great marketers they are and what powerful brands they have, the truth lies deeper. The magic for both companies lies in their deep connections to their customers and the focus on creating great products, first. While many people think that designers like Tinker Hatfield at Nike (the designer behind the Air Jordan and many other of Nike’s successful products) sit in their Ivory Design Towers creating magic, that's simply not true.

Tinker's real gift is his ability to get out of the office and spend time with athletes who he's trying to solve a problem for. He is a masterful listener. Yet he doesn't create products that the customer asks for. He listens, observes and then mixes that knowledge with his resources at Nike to produce incredible products.

In the case of both Nike and Patagonia, this ability to see the world through their customer's eyes and take that vision over the horizon has created their greatness. But it starts with great product driven by deep inspirations from the street. The brand comes second.

While many might think the idea of co-creation and dialogue is silly or trite the clients we've worked with at Radar, 75 Fortune 500 companies in the last few years, all struggle with creating this dialogue. It is a battle to get out of the office and experience the reality of the world.

Speaking of Apple, I thought they did a great job of listening and co-creating a solution for the battery life issue on the iPod after the Niestat Brothers released, the “iPods Dirty Little Secret” video. Many other companies fail miserably (Kryptonite Locks) at this.

I hope that makes sense and I look forward to continuing this thoughtful dialogue.

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4. PXLated on February 9, 2005 07:39 PM writes...

All good comments. But, Nike and other successful companies have been doing this for a long time. And understanding your customer, their needs/wants, has been preached for almost ever. At least as long as I've been around it and I'm old.
So, "co-creation" (I like the term by the way) is really just a new term for old methods. A new buzzword.
Now, if it takes a new buzzword to get companies to re-think, great.
I'll go lay by my dish now and just observe :-)

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5. jennifer rice on February 10, 2005 12:34 AM writes...

John, you mentioned "solving a customer problem." This is exactly the nut of the issue. The basic issue is to find out from the customer WHAT needs to be solved, not necessarily HOW TO SOLVE IT. In many instances (like Apple), companies should be the experts in the HOW TO SOLVE part of the equation. So this is the "shallow" co-creation part, AKA pig lipstick for customer research; I'll give you that. The really interesting trend (the true "co-creation" part) is when companies like Google and Lego are not only asking customers WHAT problem to be solved, but actively inviting them in HOW TO SOLVE IT. Like I mentioned in my post, this is not necessarily appropriate for every company or every industry. I think the important question to ask ourselves is, "are we confident that we know HOW TO SOLVE this problem better than our customers?" It might be worth a shot to open up a dialogue, start a competition, open up part of your software... whatever... just to see what happens. You never know; your customers just might surprise and delight you.

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6. jennifer rice on February 10, 2005 12:41 AM writes...

Another thought on this topic: when we believe we know the answer, we box ourselves in. If we assume that we're the experts, we automatically constrain our learning. I had assumed that I knew everything about branding until I had drinks with Johnnie Moore when I was in Europe last year. He approaches the topic from a completely different perspective than I do... I thoroughly enjoyed the conversation, and I walked away with a much broader, richer perspective on the topic. It's this type of open mind that I'd encourage companies to have when they deal with customers. Great ideas come from surprising places.

Are you willing to be surprised by life?

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7. john winsor on February 10, 2005 11:04 AM writes...

Right on, Jennifer! It is about being open to learn. It's so easy for us, as companies and individuals, to develop habits that constrict our ability to learn new things that might shake our world view. As the world changes quickly around us, it is the acceptance that we don't have all of the answers and that we need to engage with others to learn that is important. And it's the same thing whether that's you engaging in a conversation with Johnnie about marketing or Lego engaging with their customers how to solve a problem. Learning and engaging in co-creation gives all of us, companies and individuals alike, the ability to grow and change.

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8. Parker Smith on February 10, 2005 01:18 PM writes...

It sounds like "co-creation" is an attempt to encapsulate the old, boring principles of good design into a fun, new word I can use at work to impress my manager.

The examples listed earlier in the thread (Jobs, Open Source, etc) represent good design whether brought about from the prodigal designer (Jobs) or from a true users forum (Open Source). Where Jobs intuits needs, Open Sourcers report them. In both cases, the good design that results is driven by an express understanding of the user's needs.

Hasn't this always been a principle of good product design? Is co-creation just another (albeit cooler) word for user-centered design?

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9. jennifer rice on February 10, 2005 04:53 PM writes...

IMO, open-sourcers do more than just report needs; they contribute directly to the product design. Same with the Lego Factory. Same with the Google API. Think of it like outsourcing your product design to your customers. Scary thought, but you don't necessarily have to use what they come up with.

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10. PXLated on February 10, 2005 09:14 PM writes...

Oooops...looks like my dish is empty :-)

>> It might be worth a shot to open up a dialogue, start a competition, open up part of your software... whatever... just to see what happens.
Narrow focus.

>> I had assumed that I knew everything about branding until I had drinks with Johnnie Moore
Oh Oh...how many drinks did you have? Did that spawn the "co-creativity"?

>> It sounds like "co-creation" is an attempt to encapsulate the old, boring principles of good design into a fun, new word I can use at work to impress my manager.
Bingo! And nothing wrong with wanting a fun new thing.

>> IMO, open-sourcers do more than just report needs; they contribute directly to the product design. Same with the Lego Factory. Same with the Google API. Think of it like outsourcing your product design to your customers.
You keep using very narrow-scope examples. If a company doesn't produce Legos, or open source software, or an API, then this whole "blog" doesn't apply?

:-)

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11. Bruce DeBoer on February 11, 2005 12:24 PM writes...

I've spent a fair amount of time lately reading about Open Source Marketing and trying to contain my laughter and tears. Co-Creation is a much better discussion point since it doesn't have the feel of a proprietary buzz word yearning for a guru to emerge.

Us marketing types love buzz words. Let’s revive a horse we haven’t beaten in a while to see if we can’t get a new perspective. It’s very provocative, sexy even – I possess no immunity from its allure. I cope by asking myself, “what’s new this time”.

Co-creation feels new because we have tools that are new and powerful. I remember an old marketing principal that defined design to standard (benchmarked quality), design to need (market driven) and design to latent need (innovation). All three are based on customer feedback, although the third is a more visionary (enter Steve Jobs). We now have a larger scale capability to tap into our market for innovation. It’s design to latent need using a large collective brain and the wisdom of crowds [not to be confused with design by committee].

There is some fear. Is this the end of marketing as we know it? Nope. Is it cool? Yup. Will there be Guru’s that make us laugh and cry? Yup. My plan? Learn all I can about the new tools and innovative approaches and apply them to good sound marketing and business strategy that my mentors have taught me.

Oh yea – and participate in some really great web discussions. On a much larger scale, I have co-creators of my wisdom (open source wisdom?). Thanks.

Permalink to Comment

12. jennifer rice on February 11, 2005 12:29 PM writes...

Bruce, terrific comment. Thank you. To spring off of your last sentence, it seems that we're all co-creating this idea of co-creation. Pretty cool.

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13. Dan Alsip on February 11, 2005 02:20 PM writes...

So far this thread seems to have focused on "co-creating solutions." I believe that there is another side of this issue (at least for complex business to business products and services).

Many companies that sell complex products and services don't do nearly enough to help their customers to "co-create value" after their solution is sold and implemented.

By this I mean that all too often in the business-to-business environment, a company's focus on the customer drops off dramatically after receiving the purchase order. Yes, many companies offer implementation services, training and after-sale support, but many don't truly help the customer to achieve, sustain and measure the value they were promised.

Would you consider this to be a part of co-creation? Or is this a quirk of business-to-business marketing?

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14. Steve on February 11, 2005 03:06 PM writes...

Co-creation is a powerful trend in product development that has been around for quite some time, but has recently started to gain traction. Alvin Toffler used the term "prosumer" (a contraction of production - consumer)in his 1979 book "The Third Wave" to describe consumers that produce their own products - with or without the help of traditional companies. The word "prosumer" has since taken on a different meaning in the tech world, but Toffler's original description of co-creation is still pretty relevant.

For recent examples and a deeper analysis of this trend take a look at CK Prahalad's "The Future of Competition - Co-Creating Unique Value with Customers" (available on Amazon). This book covers a range product development examples and methods "in which the distinct roles of the firm and the consumer converge and sources of value creation change dramatically". It has lots of examples of products that have been built using some form of customer co-creation.

On the open source side if you haven't seen Steven Webber's "The Success of Open Source", it is an excellent source of information on the open source co-creation process. Webber's book is also available on Amazon.

Co-creation is also closely linked to customer self-customization. Consumers increasingly want products that can be easily customized to meet their exact needs and provide a unique, consumer-specific experience.

Starbucks has tapped into this trend, as have music industry through the selling of ringtones (a $4 billion market in 2004), and the auto industry through the sales of aftermarket parts for customizing cars (a $28 billion market in the US in 2004).

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15. jennifer rice on February 11, 2005 03:56 PM writes...

Dan,
Hmmm, interesting question. To co-create after-sales value would presume that the customer is partially involved in the solution. I like this idea because too often the customer is forced to pay a great deal of money for after-sales support, when often they'd prefer to handle it themselves. Perhaps there's a customer forum where customers can trade information and tips about how to manage the software? Or, as Steve points out, the vendor can provide tools that enable the customer to customize their own apps.

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16. Chris Lawer on February 11, 2005 04:34 PM writes...

I am aurprised that that the E-word- experience - has only been mentioned once. As I see it, Co-creation is about the customer creating personalised value / contextual experiences for themselves. The firm enables this customer value-extraction to take place by providing an experience environment that can flex in-line to the customers specific location, event, time, need etc. e.g. On-Star. Therefore, both customer and firm are co-creating - mutually to meet their needs.

This differs from co-creation FOR the firm exclusively - i.e Toffler's Prosumer or Von Hippel's "lead consumer" concepts - where the customer is involved more explicitly in new product development - not much benefit for the customer at the end of the day other than a shot of ego boost.

For more on co-creation see my recent blog on comparing it to Buyer-centricity - now theres another whole debate!! Cheers CL

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17. Chris Lawer on February 11, 2005 04:56 PM writes...

P.S re IPod / ITunes - in my view, this is a perfect co-creation example. This is because the Apple "experience environment" allows me to create personalised value in the form of my own extended take-anywhere jukebox which I can adjust my listening experience according to my mood, I can rate and sequence my favourite songs, I can create my own personal folders, I can review and prioritise which songs I play most often, I can get recommendations from other users who like what I like, I can create my own I-Lists etc etc...

In essence, Apple creates the environment - I create the personalied experience = that adds up to co-creation.

By contrast, Let's say I was asked to co-create the Sony Walkman. I may have said that I would like it a bit smaller, or to be able to play it in the shower, to have a snazzy grey design or a faster fast-forward mechanism that didn;t run the battery down in 30 mins (remember that!) The difference is that all are "surface" or "cosmetic" feature enhancements that do not allow me to personalise the value / experience I get when I use the product. I would still have to buy standard issue cassetes with the same track sequencing and so on. In this respect, the value is inherently still in the product - the plastic and metal screws and colour and size - not in my ability to personalise this value.

Er, I think!

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18. John Ounpuu on February 11, 2005 05:00 PM writes...

My two cents:

I think co-creation is closely tied to another buzzword idea -- customer experience management.

It's less about designing a product than it is about designing an amazing experience around a product or service.

The perfect example is Amazon. What makes Amazon great is not what they sell but how they sell it. And this has everything to do with the way they co-create value with their customers. I'm thinking specifically of user reviews and other recommendations.

Amazon's great stroke of genius, which we take for granted now that we have become used to it, was to post negative reviews of books they are selling. When they started doing it, people thought they were nuts. But it works. It brings people to the site. It engages them. It lets them recommend things to each other. It lets them share expertise and see what other people think. And all of this value is created by customers without interference from Amazon. They just created the framework and stepped away. To my mind, this is the perfect example of co-creation.

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19. James Cherkoff on April 1, 2005 03:35 AM writes...

What type of company does not want to listen to its customers?

Co-creation and open source marketing (you know you love it really Bruce ;-) are new techniques to carry out old-fashioned tasks. Inspired by a whole new set of technologies we can listen to the marketplace in new ways, at a micro-level.

As with lots of progress the greatest barrier is people's mindset which is perfectly illustrated by the 'slimy masses' notion.

As ever, those companies which listen closely to the marketplace are more likely to succeed than those that don't. Or put another way, there's a competitive advantage for those companies that listen at a micro-level using new technology and then respond to what they hear.

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Community intelligence from What's Your Brand Mantra?
I've been thinking a lot on community intelligence and co-creation, and a number of stories have caught my eye recently: A couple days ago, Reveries had a great article on the 3 stages of evolution in search. You can look [Read More]

Tracked on December 17, 2005 12:10 AM


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