Customer Co-Creation Is The Secret Sauce To Success

Customer co-creation is one of the building blocks of the interactive, participatory and collaborative information distribution web model ‘Web 2.0’, which is being exhaustively used by marketing firms to empower their consumers to share their personalised experiences on the web and hence, democratizing the online content and harnessing the need for social affiliation among them. This CRM strategy allows the end-users to actively research, compare and review products and services as part of firm’s business model and enables both the positive and negative customer experiences to be shared on the public forum as a ‘social proof’. Not only this co-creation leverages the customer engagement by providing more customised services but also taps the users’ creativity & feedback for increasing purchase or consumption rate.

Online reviews are one of the best type of user-generated content (UGC) that forms a key part of the Consumer decision-making model as – Pre-purchase information search, Evaluation of purchase alternatives and Post-purchase evaluation. While it’s one thing to conduct primary research among consumers which often fail to generate real and usable insights for analysis purposes, co-creation involves two-way interaction from the very beginning which provides a valuable, accurate and meaningful amalgamation of consumer first-hand experience and preferences.

Source – Consumer Behavior 11th Edition, Leon G. Schiffmann, Joseph Wisenblit, S. Ramesh Kr.

 

From the firm’s point-of-view, there are three crucial contributions which enhance the competitive effectiveness namely – streamlined innovation, brand loyalty and cost reduction at large. Though co-creation, marketers incorporate creative ideas, suggestions and best practices on real-time basis without suffering any loss of having missed them. A better and more streamlined customer experience and feedback ensure delivery of products and services that fulfil consumer needs closely and promotes brand loyalty for a leading competitive advantage. From the cost accounting point-of-view, a significant chunk of the budget earlier allotted for market research and surveys is saved for production process rather than any hit-or-miss efforts in primary research.

Let’s look at a customer review given for a restaurant called ‘Barbeque Nation’ in Lucknow on ‘Zomato’ webpage –

Source – Customer review section of ‘Barbeque Nation – Lucknow’ Zomato webpage.

The above exhibit is a vivid illustration of how a user experience and online content i.e. pictures and comments used to co-create a positive aura about the services offered at Barbeque Nation, Lucknow, which not only contributes in deriving business insights for the owner, but also plays a powerful information search tool for thousands of potential customers of Barbeque Nation in and around the city. It is very important to keep this fact in mind that – Barbeque Nation itself is also a brand and in order for the reviews to continue to be effective, the brand name itself has to remain trustworthy. Self-reviews, anonymous or bogus reviews take the credibility for a complete toss which is very difficult to re-gain. Therefore, firms are paying due attention in attaching each review to a social media profile for authenticity – e.g. Facebook profile, which allows other to have an idea as for who and what are the things they follow, like or dislike.

In return, firms get a very rich demographic and psychographic data about the taste and preferences of the individual customers based on what other restaurants he/she visited and what were his/her ordering pattern, frequency of visit, preference of cuisines and most importantly – what kind of services are appreciated by the user when he/she visit any food joints.

As more and more consumers are getting empowered with the rise of internet, social media and electronic discussion forums like chat-rooms, newsgroup or online communities provide newer opportunities for geographically dispersed individuals with similar interests to come together virtually, culminating newer forms of interactions for purchase and post-purchase decision making.

A strong degree of product involvement is required for co-creation because consumers not only use their knowledge, sharing their experiences, but also invest significant time and data resources. So, consumers compare the monetary and non-monetary costs involved to gauge the benefit & engage voluntarily only if they find it rewarding. Co-creation drivers originate from the intrinsic motivation to interact and cooperate, purely from a sense of altruism. Also, extrinsic benefits e.g. social incentives – reputation within a desired in-group, enhanced knowledge and economic benefits also relate to the consumer motivation behind ‘co-creation’.

In these virtual forums, marketers and users co-exist to produce as well as consume information in voluntary and democratic manner, at virtually no cost, contributing to firm’s financial gain and reputation. In place of the firm, consumers itself help in acquiring new customers or influencing other customers’ perceptions. Consumer insights are a crucial source of knowledge, contributing in designing, developing or upgrading new product or services – hereby improving the firm’s offering through a collaborative innovation. That is why co-creation is considered to be the secret sauce to success for businesses.

Subhra Pratim Halder

This article is written by Subhra Pratim Halder, PGDM (Marketing & HR) IIML, batch of 2018. He was the head of elected Senate, IIML and worked for the branding & public relations as part of Media Cell of the institute. A two-time National level winner of essay writing by NHRC, he is keen into developing insights on consumer behavior and brand management in Marketing.

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