Customer co-creation in innovations : a protocol for innovating with end users
Mea Marcel Weber · TU/e Research Portal · 2011
The transition into the information revolution or age has made it possible for consumers and users to interfere in the conceptualization, design, production and sales processes of firms. Consumers and users can express their needs in more direct way to producing firms, they have access to the way products and services are made, and last but not least, have access to information on competing products and services that even producers don’t know about. Consumers have become more knowledgeable and are therefore capable of designing and producing their own products and services. The success of innovations or new product and service development is highly dependent on whether they take in consideration the needs and demands of potential users and consumers. In other words, a market orientation is essential for the success of an innovation. Firms would therefore welcome the idea of consumers and users expressing their demands and probably appreciate consumers who want to participate in the new product or service development, because they would have immediate feedback on the potential success of the innovation. Question is, however, how to achieve this and how to successfully co-create with customers in the innovation process. This design research addresses customer co-creation in innovations for product and service industries. It addresses how firms should successfully activate customers or users and what process they should follow, i.e. the kind of customers or users to involve, the tools and techniques to apply, and procedures to be followed. It develops the appropriate interventions for this in a Customer Co-Creation in Innovations (3CI) - Protocol. The nature of this research is prescriptive, based on the Design Science principles, aiming to design a solution for firms that are interested in the co-creation role that customers can play in their organizations regarding innovations. The research results in a protocol which organizations that want to co-create with customers in their innovation process, can use or apply, to effectively co-create with these customers. Effectively in this sense means that the customer input will be of added value to the innovation, resulting in the outcome that the organization succeeds in bringing the innovation into the market or in use. This doesn’t necessarily mean that the innovation will be a commercial success, because this success depends on more and other factors than just customer co-creation. But, in this context customer co-creation gives the organization the necessary confirmation that the innovation fits needs and demands in the market, and thus leads to a higher adaptation than one should expect when not co-creating with customers. There is an abundance of literature that argue the benefits of involving customers in the innovation process, while other address the issue of which customers to involve, so, the research focuses itself on best practices, experiments, and such to develop this protocol. This has been accomplished by studying the diverse modes or appearances of customer involvement in product or service development, such as market research, empathic design, user-centered design, co-design, mass customization, user innovation, open source software development, user generated content, crowdsourcing, and customer co-creation. Although there is a lot of overlap and similarities among these modes of involvement, there are also many differences, indicating that customer co-creation in innovations is contingent on many factors and aspects. To reduce the confusion, a construct of customer co-creation in innovations has been developed, which has been defined as the process where product manufacturers and/or service providers actively engage with their end users or customers in (parts or phases of) innovation projects to jointly perform innovation activities and co-create value, with the aim of increasing effectiveness and efficiency of the innovation process. Effectiveness refers to (1) the result of meeting users’ and customers’ needs and demands in a better way; and (2) increasing customer loyalty. Efficiency refers to (1) the reduction of research and development costs; and (2) the reduction of development time. And to analyze differences and similarities so that the appropriate design propositions can stated, a 3CI framework was developed, covering the following topics: (1) how to determine whether a firm can co-create with its customers in innovations, which are the so called context conditions; (2) how to identify, select, and motivate potential customers to participate in customer-open innovations; (3) how to engage and involve these customers in the innovation process in an effective and efficient way, the process, procedures and methods one can follow, the tools one can use to accomplish this. With this framework the practice of customer co-creation was analyzed by means of five case studies, in which two of them, the author was an actor in designing and executing the process of co-creation. The cases, selected for their diversity, reveal the opportunities and challenges of customer-inclusive innovation. Customer involvement was at least a partial success in all cases. At the same time, it was never a ‘silver bullet’ to permanently transform the way the company worked. 3CI seems to be capable to support both incidental and repeating innovation initiatives of a firm. Another observation is that, whether a B2B or B2C type of firm, a manufacturer or service provider, small or large firms, all seem to be capable of and suited for 3CI. Common in all cases, however, is that the organization’s offerings and markets should be heterogeneous, thereby containing opportunities to either develop line extensions or really novel (radical) offerings. The technology base of the organization, however, does not seem to be a prerequisite. Another theme cutting across the cases is the nature of an ‘innovation community’, where users test, experiment with and modify or enhance existing prototypes and products, paving the roadway to innovation. As for the relationship between innovation type and type of customer, the cases undoubtedly demonstrate that ‘ordinary’ users can provide useful input to develop radical or novel innovations. The cases also demonstrate that nearly all innovation activities can be conducted by co-creating with customers, including needs assessment, ideation, the screening of ideas or concepts, concept testing, design and development, the commercialization of the innovation and even the re-innovation or use stage. So, although one could get the idea of 3CI being of particular interest in the front end of an innovation stage, we see that in all later stages 3CI can be beneficial as well. Typical across all cases is also the contingency of the channel of involvement (online versus face-to-face) with the amount of customers involved, which we have typed as the degree of openness. The more people are involved, the more open (no secrecy) the co-creation is and the more the involvement is obtained through the online channel, either with communities or on an open call. Conversely, the less participants, the more secrecy is needed and the sooner the physical presence or offline participation seems to be imminent in participation. Finally, regarding the use of tools it can be concluded that sophisticated methods for customer co-creation are a complement rather than the sole source of user information. More important seems to be the occurrence of a dialogue between firm and participating customers, implying that the quality of the interaction depends on mutual trust, appreciation, commitment and equality. Tools that support this dialogue, such as the ZMET¿, OBR, or similar techniques, seem to be important to assure effective and efficient contribution from customers. Subsequently, the design process was conducted, first by defining 16 design requirements for the protocol – subdivided in functional and use requirements, and design restrictions and boundary conditions – followed by the development of the design propositions. A grand total of 28 design propositions have been identified, regarding the context of 3CI (10 propositions), the customer requirements (10 propositions) and process (8 propositions). The context propositions reflected the context decisions to be made, i.e. the appropriate strategy, the suitability of the firm’s market, the initiator for the co-creation (firm or customer), and the type of innovation (incremental vs. radical, open vs. closed mode). Wherever appropriate we have also reviewed the appropriate methods, tools and techniques for the best implementation of the interventions. These are the first decisions the firm has to make when undertaking the 3CI Journey. Only when these decisions are made a next step, i.e. determining which customer requirements are appropriate, can be made. It has been argued that any organization can co-create with its customers in innovations, provided that they adopt and maintain a market oriented strategy, along with the necessary tools, space, freedom and transparency for customers to participate. Customer co-creation leads to at least effective incremental innovations, but when the organization applies Customer Knowledge Methods it increases the chance for an effective radical innovation. If secrecy is required, a closed mode approach of co-creation can be followed, entailing that a minimum amount and diversity of external participants are involved, provided that there is a clear scope of innovation objectives and the market it is intended for. Finally, organizations can either rely on customer-initiated ideas or initiate an innovation itself. In the first approach the organization is recommended to create and maintain a customer community, which can be observed and interacted with to elicit the customers’ ideas. The 10 customer design propositions deal with the type of customers to co-create with in innovations and