What is co-creation and how can it help your business?
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In a nutshell, co-creation is when different parties work together to produce a mutually valuable outcome. It can have any of these 10 business benefits.
Although there are a lot of definitions of co-creation out there – one study finds 17 different definitions, each of which is slightly different – there is a general agreement that co-creation of value happens in a dynamic shared space where multiple stakeholders converse.
But how exactly does co-creation generate value for businesses? New research, published in the Journal of Consumer Marketing, answers exactly that question.
Drs Eric Kennedy and Francisco Guzmán from the University of North Texas interviewed 42 key-decision makers in marketing departments from the USA, South America, Europe, and Asia. The research participants described ways that co-creation has helped them to achieve a number of organizational goals (#1-5 below), and brand goals (#6-10).
These are the benefits they described.
Co-creation helps organizational goals
1. Increased return on investment
Sharing power and co-creating with consumers helps firms to grow sales and profit in the long term. Research participants stated that engaging with consumers enabled them to stay relevant, increase sales and insights, as well as reducing churn, and gaining a higher shareholder value.
2. Improved customer insight
Engaging with consumers helps firms to better understand their consumer needs and validate learnings from formal market research. Managers have also found that keeping lines of communication open with consumers impacted sales, and that this sort of informal research could help to drive concept development.
3. Expanded intellectual resources
Engaging with consumers increases the intellectual property of a firm, and aids its competitive position in the marketplace. Marketers who participated in the research commented that co-creation enables firms to make sure that they are both providing the right content, and evolving the product to the market’s needs.
4. Alignment with mission statement
An organizational culture built around the importance of the consumer is a prime factor in co-creation with consumers. The researchers note that by embracing co-creation, many firms are simply delivering against a key part of their mission statement to work closely with customers or put the customer first.
5. Better quality of service
Co-creation enables firms to enhance the service that they provide. For many firms, personal interaction with customers is a core part of the services they provide, and therefore essential to providing a better brand experience.
Co-creation helps brand goals
6. Stronger brand
Co-creation helps to enable the alignment of brand perception and brand identity, increasing the value of the brand. Research participants noted that engaging with consumers enables brands to create better, more relevant content, which builds equity and improves ROI. One participant commented that consumers are an extension of the brand – without them, a brand loses relevance and market position.
7. Increased brand loyalty
The more communication a consumer has with a brand, the more loyal they will be to that brand. Marketers who participated in the study noted that engagement keeps brands fresh, connected, and relevant. In order to create long-term relationships with customers, engagement is simply key.
8. Greater brand awareness
Co-creation leads to increased brand awareness, especially when a brand is attempting to change their image or move into new markets. Research participants noted that brands have an advantage if they are top of mind for consumers, helping them to feel confident in the choices they make.
9. Improved differentiation
Co-creation is a way that brands can differentiate themselves from competitors. Marketing managers noted that the closer relationship with consumers that is enabled by co-creation helps brands to garner a competitive position.
10. Enhanced brand experience
Brand experience is enhanced by co-creation. Research participants noted that co-creation with consumers leads to better experiences, in turn leading to greater customer satisfaction, more referrals and word-of-mouth, new customer acquisition and repeat business.
Read more! This listicle is based on "Co-creation of brand identities: consumer and industry influence and motivations" by Eric Kennedy and Francisco Guzmán published in Journal of Consumer Marketing.