What do Heineken, Ikea, Starbucks, Lego, Unilever, and Taco Bell all have in common? On the surface level, all of these companies are very successful in their category but offer very different experiences to their respective customers. The red thread connecting each is their strategic use of co-creation to help develop new products and customer experiences at pivotal times in their history. If you want to learn more about how this method can spark innovation and growth at your company, keep reading.
What Is Co-Creation?
In the past, the development of new products happened first, with consumer feedback gathered at the end to see if the solution tested well. If it passed, the product continued down the gates to a market launch. The results weren’t exactly positve. According to Harvard Business Review, about 80-95% of new products failed in the market. (“Why Products Fail in the Market,” 2019) But why?
Co-creation is fundamentally different to the traditional product creation process. The shift involves embedding customers early and often into the process (and before a solution exists.) This structure assures that both parties can help identify the most meaningful problems to solve and prioritize the most valuable ideas for the consumer and also the business. Both have to align on an execution, while one another’s value proposition might be different. Only then, can the collective parties iterate on the experience until it creates enough shared value, usability, and scalability for both parties to be successful into the future.
The opportunity around Co-creation is that it’s application is not limited to the launch of successful physical products. Co-creation can also be utilized to launch disruptive business models, high-grow tech platforms, and also category-defining communities like Glossier. It requires a mindset shift around how innovation can be defined together over time, rather than a one-off creative workshop.
Four Types of Co-Creation
While Co-creation traditionally occurs between customers and a company, it is not limited to that. It can also occur in open or closed settings and involve external suppliers, industry influencers, experts, and (gasp) your competitors.
There are, in general, four types of co-creation. Each style is a little different when it comes to the approach to collaboration and the desired end state.
This gets referred to as the “Club of Experts.” In this style, the individuals who contribute to the project have to meet participation criteria. The individuals are also often chosen based on a selection process.
The club of experts is all about the quality of input and the chemistry between the individuals participating. The people involved will be highly knowledgeable on the subject matter. This is a great style to use on projects that are time-pressured, very specific, and that need expert-level contributions and ideas.
This gets referred to as the Crowd of People. There are no limitations on who can join the process for this. With a crowd of people’s co-creation style, online platforms are great tools. Suggestions can get made on the platform of your choosing, and then others involved in the process can rank the idea.
With crowdsourcing, you can also pull in a marketing angle. The drawbacks to crowdsourcing include that it takes longer, and you may or may not get the best people wanting to contribute.
This also gets referred to as a Coalition of Parties. In this style of co-creation, different parties work together in order to share ideas and investments. In this situation, each party involved will bring a specific skill or asset to the group. In coalitions, you may often find yourself working with competitors or other industry influencers.
In order for this style of co-creation to be successful, parties involved need to create a common competitive advantage and share knowledge. One example of a coalition of parties is co-branding. Co-branding involves two brands working together to create one product. This product will represent both brands involved. With co-branding, both brands will have a give and take relationship. While both brands should benefit, they should also each bring something to the partnership.
One example of co-branding is Taco Bell and Doritos. The Doritos Locos Taco (linked here in case your hungry) made waves and is still on the menu. This coalition was successful because both products have a similar target market and because it’s kinda tasty 😋.
The fourth style of co-creation is community. This form of co-creation has historically worked best in the software development industry. In community, people who have similar interests and goals come together in order to create. This usually works best when seeking to develop something that is for the greater good.
Often the people you find in this group are ones who have complementary areas of expertise.
Guiding Principles for Co-Creation
There are four principles to consider when you look at the co-creation process. Each of these principles will help with the participation, sharing, and ownership in the end result.
1. Value – What’s in it for me?
What is the value of participating in your co-creation process? While people may participate, even if they cannot define how it benefits them, they may not necessarily give their best. Value does not only refer to monetary value. Maybe your project will provide psychological value. For example, seeing ideas of theirs pulled into the process can increase self-esteem.
Or maybe the value of participating is economic. For example, maybe participating in the group helps build skills that allow for later job advancement.
2. Experience – What can I take away from this?
Another critical component of a co-creation process is the experience. A rewarding experience for individuals involved often leads to a successful co-creation.
You create the experience by allowing the individuals involved to have the ability to design their interactions. There must be a set strategic direction and boundaries that are implemented to allow for this. This gets determined by the company.
An example of this would be teams that are given power over scheduling. For example, the company can set guidelines or boundaries such as you must work so many weekends or days a week, and there needs to be x number of people scheduled for this shift.
However, beyond that, the team can work together to essentially set their own schedules and work with each other on covering when one employee needs time off.
3. Interaction – Who can I meet and engage with?
Successful co-creation requires that participants have the ability to interact with each other and the company. Communication that gets limited also limits the ideas that come out of the co-creation process.
If you truly want to solve a problem, you must allow people with different experiences and knowledge base to work together. While one person may have an excellent idea, another person may be able to look at that idea and suggest tweaks that will make it even better.
This interaction can occur through in-person meetings or even online forums.
4. Platforms – How can I express myself and be inspired?
This ties into number three. In the co-creation process, there must be platforms that allow for individuals involved to interact and share experiences. For example, many gaming communities that are involved in co-creation utilize a chat app called Discord. Because Discord is a platform that gamers are already using, it allows developers to meet their customers (gamers) where they are at and involve them in various processes.
Vurvey is a platform that allows your co-creators (i.e. internal team members, customers, experts, suppliers, etc.) to express themselves through video interviews, concept feedback loops, and inspiration boards. To see how this could work for your team, check out the Adidas Case Study and the launch of GLITCH that challenges the traditional product creation methods.
How Co-Creation Works
How do you work together with customers, competitors, or other individuals to create a successful project? There are a few key components of a successful co-creation process. The following looks at five different features of co-creation, from driving participation to continuing onward.
For your co-creation process to be successful, you must have the ability to inspire participation. Why do people want to join your endeavor? What is in it for them?
Your challenge should be interesting and inspire people to want to join. You can also inspire participation through a personal benefit. For example, Lays Chips in the past have held flavor competitions called “Do Us a Flavor.”
The competition challenged consumers to come up with the next great chip flavor. The winner got awarded one million dollars. While your incentive does not have to be as grand as one million dollars, some incentives can encourage participation.
In addition, to inspire participation, you should be transparent with what you are seeking. You can do this by first showing participants who you are, then explaining why you would like their help, and finally sharing what is going to happen with any results.
Creating an Environment of Participation
However, the most important thing in encouraging co-creation is the environment you create. If participants feel judged or demeaned, they will not be willing to share their ideas.
Creating an environment that fosters innovation and creativity comes down to effective leadership. Leaders cannot be seen as individuals who are scary or will judge you.
It should be the job of a leader to champion ideas and help explore them. Just because an idea is not used or does not work, it does not mean it’s a bad idea. A leader who can convey openness to all ideas and help draw out the best in the people involved is what you need to encourage participation in the co-creation process.
Creating the Team
You want the best people for your team. The best people will provide the best ideas.
In the various types of co-creation, this will look slightly different. For example, in crowdsourcing, where there are a large number of people and ideas, it will be necessary to screen the best ideas.
For example, anyone could pitch Lays a new chip flavor. However, the pitches were narrowed down, and a judging panel chose finalists. It was then that Lays developed the flavors pitched by the finalists and shipped them to market for the final vote by consumers.
If Lays attempted to create every flavor pitched, that would take a lot of time and money and make the co-creation process less successful. So they took the best ideas from the best people.
Another way to do this is from comments and ratings online. When you are using a club of experts co-creation process, it will look different. You are already screening applicants who want to be part of the process.
You have set criteria, and the goal is to choose the best people who meet the criteria for the project. Part of putting your team together in this instance comes down to the ability to determine what makes the members of your team special and why that will benefit your team.
Finally, when you build your team, consider chemistry and diversity. If your team is unable to work together because of bad chemistry, you will not accomplish much.
In addition, diversity means you will get many different thoughts on the subject at hand. This could mean various genders, professions, interests, nationalities, etc. However, a diversified team will help you get great results by looking at your project from multiple angles.
Connecting Creative Minds
In order for your co-creation to be successful, you must enable creative people to work together. It is your job as the person leading a co-creation effort to listen, be interested, and be receptive.
Through doing this, you are afforded the opportunity to unlock potential and see moments of revelation. This requires you to build a relationship with the contributors in the group.
It will not be an us vs. them. You are literally bringing these people into your team and creating a space where they belong.
What does this look like? You are able to learn from each other. And you learn from each other through sharing experiences, dreams, strategies, failures, successes, ideas, and information.
At the end of the day, with co-creation, your company has the potential to develop something great. However, how do you share the results in a way that gives back to the people who helped you?
Above we talked about co-creation and Lays a bit. Lays in their contest offers a one million dollar prize. However, not every company has the ability to offer rewards at that level, and that’s okay.
Giving back to your co-creators is good, and a monetary reward is not the only way to do this. You can also give back through recognition. You can list key contributors; this reward would fall under status.
You would essentially be giving your contributors bragging rights that they were key in developing a product. You could also invite the individuals involved to join other projects.
This allows for recognition that their feedback is valuable. When someone helps you feel like your ideas and creativity are appreciated, it makes you feel good about yourself and builds the desire to want to continue to participate.
The worst mistake that can be made is forgetting about your co-creators. Making sure that they feel valued and as if they are part of the project through updates on progress and developments will help with further positivity.
Continued creation or development is required even after the technical co-creation process ends. The ideas that get created within a co-creation process are not always completed during that time.
During the time you continue developing the ideas, you want to keep open communication with the team that helped. What is happening with the project? What is the outlook?
This type of communication helps individuals that participate feel as if you respect the contribution they made.
The Steps of Co-Creation
Are you ready to begin your co-creation journey? To simplify things, there are a few steps to co-creation that you should be aware of.
Step One: Objectives
In the co-creation process, you want to define clear objectives. These objectives should be defined before the process even starts. You are unable to share your objectives if you do not know what they are.
Step Two: Participants
The next step is to figure out who you want to be involved in the project. Is your project better suited to a club of experts? Or would crowdsourcing be a great way to co-create with your customers?
Part of figuring out who you want as your participants involves completing step one and fully defining your objectives.
Step Three: The Work
The third step involves the process of working together with your participants. In this step, you are going to work to identify the needs and wants of your customers.
Step Four: Design
In this step, you are going to design the actual product based on the ideas and feedback you have gathered. This step’s about creating; this is where you will begin to give the participants updates about the progress and what is happening.
Co-Creation and Marketing
Co-creation has the potential to be a part of a marketing strategy or a marketing strategy by itself. Companies that utilize community marketing can easily use co-creation as part of their community marketing strategy.
In addition, co-creation can be used as a collaborative marketing technique, taking a step closer to results and sharing the results with the individuals who were part of the co-creation process.
When you recognize and make the individuals who contributed feel valued, they will be excited about your product. This will lead to them sharing their experience and talking about your product.
As they are talking about your company and your product, you are receiving word-of-mouth marketing. Word-of-mouth marketing is powerful. Around 92 percent of customers trust recommendations from their friends, and 6 trillion dollars of annual spending is driven by word-of-mouth marketing.
Benefits of Co-Creation
You know what co-creation is and different co-creation features. However, at the end of the day, why should you choose co-creation for your company?
The process of co-creation leads to the creation of better products. When you create in a vacuum, the amount of experience and ideas going into your product are limited.
However, with co-creation, there is no need to wonder what your customers want. With co-creation, your customers get the opportunity to tell you their needs and desires when it comes to your product.
This means it’s no longer a guessing game. You just have to take the time as a company to listen.
The Bottom Line
As a business, you understand that sometimes you have to spend money to make money. However, you also understand that what you are bringing in should surpass what you are spending.
When you are creating a product, you are likely to spend money on research, development, and marketing. However, through co-creation, you can reduce the amount you are spending on these.
You can also reduce customer churn by utilizing co-creation. When customers continue to return to your company, you continue to be able to provide them value, and your bottom line is ultimately improved.
Do you want new and unexpected ideas for your products? Co-creation gives you the opportunity to create these ideas.
This is not to say that your in-house team is not doing their job correctly or well enough. It simply allows for new ideas and voices to become part of your team.
This can even help spark ideas in your in-house team and encourage them to think outside the box. So many times, when you have been doing something for a while, it can be easy to get into a routine.
Allowing for new voices and new ideas allows your team to step outside their comfort zone. This can help create a product that will see success.
Increase Customer Loyalty
When your customers see their ideas being taken seriously and developed, it increases loyalty. You have, at this point, taken a customer and turned them into a stakeholder.
Think about it, how much more likely are you to buy a product or use a product when you feel they value customer input? This allows your company to become customer-centric and improves the customer experience.
Happy customers are more loyal and less likely to look for other products. Especially younger generations, Millenials and Gen Z are more likely to pay extra for customer experience.
Investing time and money into a product to just have it flop is disappointing. However, with co-creation, you can reduce the risk of this happening.
This is because you are creating a product that is customer-centric. Your stakeholders or customers contributed ideas for it to get created, and that makes it more likely there will be buy-in from your stakeholders.
Improved Customer Insight
Are you struggling to figure out what your customer actually wants and needs? Co-creation can help you get a unique insight from your target customer.
It allows you to engage with them in ways that you may not have in the past. This new level of engagement allows more insight into the needs of your clients.
Increased Intellectual Resources
If you are looking to increase the amount of knowledge being poured into a product, co-creation is perfect for you. Co-creation gives you the perfect opportunity to bring in many minds who are experts in their own right.
For example, gaming companies can bring in top gamers and influencers in order to test their game in a beta stage. Because these gamers are commonly playing various games and engaging with gaming communities, they will bring a lot of insider knowledge to the product that a developer may not have had access to otherwise.
Another example, say you want to create software that solves a problem. You can bring in coders and intellectuals from many walks of life to envision the entire product. A coder would help with the technical side, while others may be better equipped to view things from a more human angle.
Co-creation gives you the opportunity to bring these people together in a new and unique way.
Challenges of Co-Creation
Just like anything, co-creation comes with its own set of challenges. When you are looking at bringing outsider perspectives and utilizing co-creation, there are a few things you need to think about in the process.
Taking the time to consider these challenges will help you think about unique ways you can address these problems before they occur.
Some suggestions are just not practical. While they may sound good in theory, for whatever reason, they just will not work for your company.
If you find yourself in a place where you have to reject an idea, you must find a way to reject the idea without hurting the participant. If the participant feels rejected, they are likely to disengage from the process.
You can address impractical suggestions in a few ways. The first way is by setting guidelines and boundaries. For example, with the Lays contest, the pitches can include up to three ingredients. This prevents people entering from going too crazy and asking for chocolate cherry vanilla cola chips (although that could be interesting).
However, even with guidelines, you may find yourself in a position where you have to reject some ideas. In this case, it is important to know how to talk to people. If you are using a smaller focus group, this can easily be done by pre-screening individuals and talking to them about how they handle feedback and what the best way to give them feedback is.
It is important to not use the word rejection. Even impractical suggestions can be modified. If someone gives an impractical idea, discuss why it would not work and potential ways to circumvent the barriers.
If you do not give your members the ability to dream, then you do yourself and your group a disservice. Taking the time to talk about the reasons it may not work and discuss possible solutions to the barriers will still allow your members to feel their idea was actually considered, and help prevent them from feeling rejected.
Focusing on the Negative
When you bring people together to better a product that is already in existence, it can be easy to focus on the negative aspects. Doing this can harm the image of your brand.
While your group may hyper-focus on the negative aspects, you need to guide them to focus on aspects that make your product great as a whole. While there will always be something that someone does not like, it is about creating a product that overall people love and benefits the vast majority.
Failure to Meet Expectations
This is especially true in the form of a contest. If you set expectations too high and fail to meet them, that will look bad on your company.
Displeased customers will spread that to their friends; negative word-of-mouth marketing can impact just as much as positive. So be sure to be realistic when you set expectations for the people involved with your project.
When you utilize co-creation, your ideas and thoughts are not kept purely in-house. This presents unique challenges, especially when going the crowdsourcing route.
To circumvent this, you can set up expectations around confidentiality. It will be important to have conversations surrounding this with your team and what kind of confidentiality you need versus what you are willing to share with the outside world.
After all that information on what co-creation is, let’s take a closer look at some examples of co-creation. Many companies have utilized co-creation without people even knowing what co-creation is.
This well-known coffee chain utilizes crowdsourcing for its co-creation in a very simple way. While this company is very well known, they benefit from co-creation by making existing customers feel valued, which keeps those customers walking through their doors.
Starbucks utilizes a special website where customers can present their ideas. This website allows customers to submit new ideas, ideas on how to improve existing products, requests for products to be brought back, and an “other” category if their idea does not fit into the above.
When you submit, you agree to their terms and conditions, which are there to help protect them. While Starbucks is a successful business, its continued success can in part be attributed to its co-creation methods and keeping existing customers happy and feeling valued.
LEGO is another well-known company that utilizes co-creation. However, with LEGO, their customers that are involved in the co-creation process have the potential to earn money.
LEGO’S co-creation story began in 2008. If you are at all familiar with LEGO, you have probably seen impressive LEGO creations. From ships to cars to planes and more, if you can dream it, it’s likely you can build it from LEGOs.
This company took advantage of its fan base and sought out ideas from its customers. Ideas were then turned into LEGO-braneded products. Over a 10 year period, fans submitted 26,000 ideas.
From these ideas, 23 LEGO Ideas sets were created. LEGO also recognizes and gives back to their creators by giving them a portion of the money made from the product.
This keeps LEGO dreamers coming back and resubmitting ideas that can continue being released to the public. These LEGO ideas are truly innovative and bring something new to the company that they would not have gotten without the help of co-creation.
Do you enjoy shopping for furniture at Ikea? They are another company that leverages the power of co-creation. Ikea targets several groups when it comes to co-creation.
They ask customers to share suggestions for product ideas; utilizing your customers is always great because it helps them feel heard and valued. However, Ikea also reaches out beyond just their customer base.
They run boot camps for entrepreneurs. By running these boot camps, they also provide value to other entrepreneurs. These boot camps are all about collaboration and co-creation.
Through the boot camps, you are seeing more of a club of experts or a coalition of parties. Ikea also works specifically with college students.
By working with college students, it allows them to focus on a core demographic for their product. They focus on creating products that benefit college students.
Finally, Ikea also works with innovation labs. This gives them the opportunity to pull in more experts and design more functional items that you can use in your home. Ikea has not stopped their co-creation with just crowdsourcing; they have really looked at various aspects that can help their products grow and meet the needs of their customers.
Unilever produces consumer goods and owns multiple brands that are well-known. Unilever recognized that the products out there were not meeting the needs of all individuals, specifically African Americans.
They used Vurvey’s video insights to help them with co-creation and solving this problem. From this process of seeking to understand the needs of diverse customers, Unilever was able to create a new product.
This product, Melé, is only a start. However, allowing customers to feel heard and as if they have not been left out is a great step for this company.
Not only are they filling a need where there was a gap, but they are showing their customers that they are valued, and they matter.
If you are a beer lover, you surely recognize this name. How does a beer company introduce co-creation?
Heineken leveraged their stakeholders by asking them for ideas about a new club or bar. This happened in 2012. Heineken used a Club of Experts.
The people on their team were designers of every type. Their job was to come up with a unique club idea. This Heineken concept club also involved a research panel with over 100 clubbers from around the world.
This pop-up club had thousands of visitors over a week. In addition, it garnered a lot of media and attention for the brand. Heineken truly used the concept of co-creation in a unique and fun way that worked well for their brand.
BMW utilized co-creation to get ideas from fans and customers. They did this for the first time in 2010.
Their idea focused on ideas for the future, and they named the contest “Tomorrow’s Urban Mobility Service.” This co-creation project had 497 users.
From these 497 people, 300 ideas were published. These ideas were evaluated and commented on by over 1000 people around the world.
This contest is not only a great way to get people talking about BMW more, but it also sparks innovation. Because of their co-creation efforts, BMW gets to hear ideas and work towards utilizing those ideas if possible.
Kanye and Adidas
Adidas has utilized co-branding by working with Kanye. Kanye is well-known for his music. However, he was able to work with Adidas to create a footwear line.
This footwear line is known as Yeezy. How did this benefit both parties? Adidas had the opportunity to build off Kanye’s celebrity status to market this footwear line. This is similar to the Glitch co-creation process that Vurvey used to help Adidas.
While the benefit for Adidas may seem obvious, what was the benefit for Kanye? Kanye is bigger in fashion than most probably know, and the partnership with Adidas gave him a platform to build his own clothing line.
General Mills is another well-known company that has utilized co-creation to its benefit. This company has used crowdsourcing by accepting ideas for new products from everyone, including employees and customers.
However, they have also teamed up with scientists and more to help with the production of these products.
This helps General Mills stay on top of the game when it comes to your favorite products. It also helps them bring in new ideas that may not have been thought of by the in-house team.
Start Your Co-Creation Journey
What is Co-creation? Co-creation is a method of creation that allows for innovation, can improve your brand reputation, and can spark word-of-mouth marketing.
Are you convinced that co-creation is the right solution for your company? After you define your objectives, make sure you pick the right platform to communicate with your users on.
Vurvey provides a unique platform with video insights. We are here to help you grow and in the co-creation process. Contact us today for a demo of our product.