As customers and consumers, we want to be included in the creation of many of the things we buy.  And the more expensive the purchase, the more involvement we want. Maybe it’s because we are control freaks, maybe because we have a fear of failure or maybe it’s because of FOMO (fear of missing out). Whatever the reason, we want to stamp our mark on important purchases.

Today, there are two techniques commonly being used to include the buyer in the whole process; personalization and co-creation.  Personalization is somewhat easier and, as would be expected, does not produce as great an experience (or as much customer value) as co-creation, but also does not require as many resources.

Personalization

Personalization is also called mass customization.  As part of the product or service development process, the supplier defines a number of items that have different attributes but are interchangeable.  The customers order the item to her preference and the item is then “custom make” on an assembly line or equivalent.

For example, I am sure that almost everyone at one time or another has gone on a car website and “built” their dream car to find the cost.  The output list can also be used as the input to an order and you get exactly what you want and never feel you had to compromise because you took what was on the dealer’s lot.  If you have never enjoyed that experience, start here.  (I like to dream.)

Co-creation

This is a very different beast than personalization.  Here is my own story.  In 2011, the Framingham Public Library saw an opportunity to get a State grant to build a new branch library.  And, since I was Chair of the Library Trustee’s Building Committee, I was in charge of the whole process.

The process started with the agreement to move ahead with the grant request (2011) and ended in February 2016 with the grand opening of the new Christa McAuliffe Branch Library in Framingham, MA.  This is what we built:

© Damianos Photography

The Library Director and I were involved with every major decision, and most of the minor ones as well.  We found the land, guided the architect with our vision for the building, and selected the furniture, wall colors, landscape design, and even the signs.  Also, we helped with fundraising.  I can proudly say that we co-created the building with the whole team of design and construction professionals.

What is co-creation?

“Co-creation is the practice of developing systems, products, or services, through collaboration with customers, managers, employees, and other company stakeholders.”  (Ramaswarmy and Prahalad)

This is different than personalization because, with co-creation, customers and company stakeholders work together to develop new products and services while personalization is just selecting minor changes to a basic design.  There is much more give-and-take with co-creation than with any other business relationship.

An example of co-creation when developing new services.

One of the services that Middlesex Consulting offers is the development of new revenue streams for the aftermarket service group of capital equipment manufacturers.  Our methodology is centered on interviewing a cross-section of customers, identifying what they like and dislike about the client’s current services, identifying the business outcomes the client’s customers expect from using the client’s products and finally looking at similar serviced being offered by our client’s competitors.

We combine the insights from all these sources into a set of services geared towards unique segments of our client’s customers.  When our client’s service sales people explain to prospects how the services were developed, they feel as though their opinions were heard and they immediately feel comfortable with the offers.

Other sources of co-creation inputs are:

  • Crowd-sourced funds
  • Key account advisory boards
  • Roundtables at users group meetings
  • On-line community engagements and interactions (Think Starbucks and their My Starbucks Idea website.)

The topic of co-creation is complex and has been well documented.  One of the best sources that I can recommend is:

Summary

I think this photo summarizes the key points in this post very well: