“Listening to feedback makes customers feel more appreciated and part of the value creation process.” – Ray Poynter
Co-creation of value is a process in which companies and their customers work in tandem, to create, improve, and innovate, such that better ideas, products, and services are ‘born’. While a company may begin the process of innovation and creation of a new product / service, they would not be effective without inputs and insights from customers. Co-creation of ideas and products allows customers to feel in control and be part of the key processes that affect them directly from within a company. We know, and have often mentioned, that customers love working with people and companies that make them feel valued and important. By allowing them on-going participation in the form of co-creation of value and ideas, enhances the engagement levels of customers since they would be a part of the creation of something that would ultimately use. For a company this works well – not only would it already have found ready and eager customers for yet to be developed products, but would also have raving customers fans who would be more than willing to let others know of the great products / services and customer experiences they receive from a company. In the harsh business environment, this can prove to be immensely advantageous and lead to some serious profits for a company.
It would seem counter-intuitive that any company would want to resist this co-creation of value. The prudent thing for any company to do would be to go with the flow, embrace this changing customer mind-set, and harness the power of its customers and their ability to co-create. A number of companies have, through the co-creation of value, become the market leaders and highly respected in their realm of operation. They give customers what their customers want, seek their opinions, and better their services and products each time they create a new one. ‘Partnering’ with customers in this manner is perhaps the most modern and contemporary approach and forward thinking behaviour any company can display – more importantly it matches pace with the mind-set of the ‘new age’ customers, who want everything ‘now’, and expect things to be customized to their needs and expectations.
We know that top class service is among the topmost preferences of customers. This however, would not be possible for any company unless they understand every changing need, emotion, and whim of their customers – we know this is almost impossible to achieve. However, by involving customers in the co-creation of value, they would be more satisfied and engaged with the company and the brand, leading to an increase in business, profits, and reputation of the company. As mentioned before, the relationship between companies and customers should now be a two-way communication process – customers refuse to be ‘talked at’ or remain mute spectators. They want to be actively involved, and engaged in order to build a mutually beneficial relationship that would empower them and keep them in the ‘driver’s seat’. Customers demand personalized interactions, and what better way than to involve them in the co-creation of value and offerings.
The truth is that the creation and offering of value is no longer the privilege of the company alone – customers want to be part of the core process by sharing their requirements, providing their expertise and knowledge, and participating actively in the core process of the ‘construction’ of ideas, products, and services. It is the onus of companies however, to provide the opportunities and resources required for such co-creation of value with customers. A company can achieve greater heights and find a shorter route to success by enabling customers to remain involved. Of course, this means that companies must be willing to let go of their need for control and power – the more willing they would be, the better their relationships would be with customers. Companies seem to be happy to switch to a collaborative mode – where co-creation of value with customers takes precedence. This change has come about because companies see the utility of doing so given the many overriding factors such as changing markets, ubiquitous information, and methods to connect, advancement in technology, and the dramatic change in the mind-set and expectations of customers.
Companies are seeing that they can achieve significantly higher benefits through the involvement of and co-creation of value, through customers. Companies have realized the advantages of working closely with customers – it helps sustain an effective dialogue, there is transparency, which in turn paves the way for customers to trust a company and over time become loyal to it. Customers are huge repositories of data and insights. Since they have access to a lot of information are also well informed, and are happy to share their insights to companies that would listen and use the feedback to improve and make things easier for the customers. Through such co-creation of value, there is benefit for both the customers and companies since there is better utilization of resources, a huge saving on time and efforts (otherwise lost in re-work), customers get what they expect, and companies are able to keep customers happy and engaged. It is human nature to like people that ask for our opinion and make us feel important – customers are human too and hence no different.
The other benefit of co-creation of value with customers is that a company is able to achieve a lot more since they have added ‘manpower’ brimming with creative energy. The skills, expertise, competencies, and knowledge that customers may have given their experience, would not be present in any company’s workforce. Hence, by offering opportunities to co-create, what companies do is engage their existing customers, and attract a wider customer base, and optimizing the utilization of the unique abilities of these customers. Given that companies can gain a free yet invaluable ‘workforce’ through co-creation, it seems strange that not all companies have begun to do so or lack the willingness to concede power to customers. It is also strange because customers actually let companies know their particular requirements, and would be willing to apply their own skills to the fulfilment of their wants, which could translate to cost savings and elimination of waste.
Companies need to change their mind-set, and begin to see co-creation of value with customers as a tangible resource, which is an asset and one that would balance out the costs of maintaining a large customer base. Instead of spending money on hiring more staff, and investing in additional production or manufacturing facilities to overcome shortfall, it would be prudent for companies to use the knowledge and inputs from their customers. Co-creation of value not only increases the lifetime value of a customer, but also enhances this value, for the entire ‘journey’ of the customer, for the company. Creating with customers allows a company to keep pace with the changing needs and demands of customers, thereby staying in control of what they need to do and achieve for the customers and themselves, using the available resources.
Co-creation of value with customers is all about fostering, and sustaining highly efficacious and productive relationships with customers, which ultimately benefits a company in several ways. As customers get opportunities for creative release, they become more engaged. In addition, they would also be willing to take on several time-consuming and costly activities that the company would otherwise need to do in-house or outsource to an expensive third party. The premise of co-creation of value with customers is for companies to move from talking at the customer, to making time to learn from and gain value from each other. Co-creating is not easy, and requires dedication and a sustained willingness to work within a model that would be different, but a lot richer and more beneficial.
