Value of co-creation in sales

Co-creation is a management initiative, or form of economic strategy, that brings different parties together (for instance, a company and a group of customers), in order to jointly produce a mutually valued outcome.

Co-created value arises in the form of personalized, unique experiences for the customer (value-in-use) and ongoing revenue, learning and enhanced market performance drivers for the firm (loyalty, relationships, customer word of mouth). Value is co-created with customers if and when a customer is able to personalize his or her experience using a firm's product-service proposition – in the lifetime of its use – to a level that is best suited to get his or her job(s) or tasks done and which allows the firm to derive greater value from its product-service investment in the form of new knowledge, higher revenues/profitability and/or superior brand value/loyalty. This is according to Wim Rampen in his book titled My Personal Definition of Business with Customer Value Co-Creation.

Well I reckon cconsumers in this 21st century have more choices of products and services than the previous century but they never seem to get satisfied with the abundance of choices available. Firms are doing their utmost best to make personalized customer experiences for their clients to the point where they afford them the opportunity to create products that best suit their desires and preferences.

Consumers can now go online and customise a certain product, this was not the case a while back. This initiative was put in place to ensure more customer satisfaction but this has not been the case because consumers think and know that they can better their ‘best’ product. Remember the phrase “More money, more problems’? that’s the case with this generation…just when firms think that they have made the best product or service for their consumers, the consumers always find something that dissatisfies them with the product or service.

This has allowed the interaction between the firm and the consumer to become the locus of value creation and value extraction. As value shifts to experiences, the market is becoming an opportunity for conversation and interactions between consumers and firms. High-quality interactions that enable individual customers to co-create unique experiences with the company are the key to unlocking new sources of competitive advantage for the firms which allow them to have one over their competitors. Value will have to be jointly created by both the firm and the consumer.

Co-creation has benefits which may create value in sales and they are as follows:

• The outcomes of a complete co-creative process, whether a product, service, brand or experience and everything around it, are highly relevant and attractive for the participants, because they themselves have worked to get the results and have been involved in every major decision

• The process creates a marketing and resonance advantage. User groups and other stakeholders will be aware of the value proposition, before the results are even tangible. Word will spread, which will lead to a ‘boost’ when introducing the offering to the market. Its relevance will also be more credible to potential end-users, because customers co-developed it. Scientific research supports this notion of enhanced relevance of co-created output for end-users.

• The other benefit is result. Co-creative processes have a strong positive impact on the quality of the result. The result takes into account the different perceptions, realities and interests of all parties. Because the results are endorsed by the user groups and other stakeholders the quality of the output is high and sustainable on all levels