The Ultimate Partnership: Co-Creation & Crowd Sourcing

Co-creation. The concept is just as it would seem, a brand and its customers partner up to create something that will satisfy customers wants and needs, it’s innovative and less costly. After all, the most successful new products are those that solve a problem and fill a void in the market.  The idea is that it’s a win-win for both the company and the community who wish to purchase their products. Of course we can’t talk about co-creation without mentioning Linux. This is arguably one of the most visible and widely understood examples; it’s open source, and has been created and re-created by the contributions of individuals, as well as corporations like Red Hat and IBM.

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It would be unwise to assume that co-creation is as easy as asking for customer feedback or input on the next product release. These are a few things to take into consideration:

Privacy– It’s important to acknowledge that customers are concerned about their online privacy, they need reassurance they won’t be taken advantage of.

Legal– It’s easy for copyright and intellectual infringements to occur in the co-creation process.

Brand– Customers can just as easily destroy a brands reputation as they can boost it, managing any dissatisfaction promptly is vital.

Goal Divergence– The typical buyer/seller relationship needs to be tossed, trust and mutually agreeable goals need to be established.

Effort– This might be the biggest hurdle; the product of a co-creation requires more effort then the generic producer/customer interaction.

“Seeing customers as partners in the creation of value widens the horizons of companies entering the eEconomy.”

Timone and Pumbaa

Co-creation plays a central role in new product development and is centered around a market orientation. “The inability to adequately assess and fulfill consumer needs is often a key reason for new product failure (Ogawa and Piller 2006).”

So why would individuals be interested in the co-creation process? The primary reasons are typically financial [compensation], social [status], technical [product/service knowledge] and psychological [self expression] benefits. It’s important to remember that if a customer has a relatively low-level of involvement with an offering, the benefits may not appeal to them.

The impediments to the co-creation process are as follows: corporate transparency is necessary, so for products that require a great deal of secrecy before launch, this would present a problem. Also, the “ownership of intellectual” property is a constant struggle in the co-creation process- a possible legal issue, as discussed above. The business side often faces “information overload” because innovators, market mavens and lead users are EXCESSIVELY excited to be a part of the process, so sifting through their contributions can be daunting. Lastly, many ideas just aren’t feasible in production.

The natural transition from co-creation to crowd sourcing is clear: It is the process by which needed ideas and content are provided by the masses. This is one of the beauties of social media, it’s a perfect platform to make it all possible.

Heard of Quirky?:

It’s a business model that’s taking advantage of the community’s desire to contribute.

Here’s the gist of how they’re using crowd sourcing and co-creation to make millions (not to mention provide the public with some pretty innovative, and can I say? Life changing consumer goods.)

The public submits their ideas, Quirky choose the best, and builds prototypes. The community is simultaneously giving their feedback throughout this process- the winners go to production and are distributed. Now here’s the kicker, lifetime royalties are paid to the individual that came up with the idea. One of their jewels is the Pivot Power, a bendable power strip has sold just shy of 500,000 units to date and the community member that designed it has made half a million!.

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It’s genius because the process encourages community involvement through financial compensation and social benefits. The corporation keeps costs down because they don’t really need an R&D department- it’s crowd sourcing bliss. Here’s a little visual of that process:

 Quirky process

Consumer involvement in the product creation process is a game changer- Products have the potential to be more successful because they’re created out of the minds of the consumers who need them and corporations can save substantially, in this new business model. If co-creation and crowd sourcing are carefully executed, it’s successful, innovative and filled with value.

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