Every Marketer’s Dream Come True… Or Worst Nightmare

Every Marketer’s fantasy is to see their company’s customers engaging with the company, help innovate and create new product ideas that they are excited to buy, all the while, developing a deeper love and connection with the brand… Oh, and also pull off this amazing feat at a low cost, of course! This “dream come true” is the product of co-creation, which the Journal of Service Research defines in an article as a collaborative new product development activity in which consumers actively contribute and select various elements of a new product offering. The reason co-creation can be so effective is that who better understands the wants and needs of consumers than the consumers themselves? When you invite consumers to actively participate in the processes of developing a new product, the innovative ideas generated by the consumers are more likely to be appreciated by their fellow consumers, therefore increasing the probability that the new product will be a huge success. One of the biggest reasons a new product will fail is because the company didn’t have the ability to adequately assess and fulfill the consumer needs.  So co-creation results in a win-win situation, for both the company and the consumers, right?

Well, not always.

When you invite consumers to co-create, you are giving up a level of control. Take McDonalds, who had the idea of involving consumers to promote their brand image by encouraging positive word of mouth. McDonalds tried to do this by setting up a Twitter campaign using the hashtag #McDStories:

http://hbr.org/2013/09/understand-the-perils-of-co-creation/

As shown above, instead of getting those heart warming stories and positive tweets that they wanted, consumers took advantage of that control they were given and used it to tarnish McDonald’s brand reputation.

General Motors attempt to involve consumers turned into a nightmarish fiasco when they invited consumers to participate in a contest to create the next commercial for their new Chevrolet Tahoe SUV. According to a Forbes article, General Motors provided the tools for anti-SUV activists to create some parody advertisements like this one:

In order for co-creation to work, you need to be transparent with the consumers who you are involving. With transparency, there also comes the risk that the consumer will that let information slip to competitors. Now your secrets are no longer so secret, which can be detrimental if a company’s competitive advantage relies on protecting the secrecy of proprietary knowledge.

Another risk with co-creation that firms may encounter is information overload. Often co-creation can produce way more information than what a firm has the ability to sift through, only to be even more complicated by the fact that many of the ideas may not even be feasible to produce.

However, with today’s advances in technology and the rise of social media, co-creation is made a lot easier when it was once impossible to implement. And unlike the above cases, not all co-creation attempts fail. Take Quirky, for example – Quirky is a website that allows every day people submit their million-dollar ideas. Quirky will then sift through all of these ideas and design a couple hundred of the submissions. From there, Quirky narrows down the designs to a few products that it will actually produce. On top of getting the idea from a consumer, Quirky has a community of members that it asks to give their feedback on every product throughout the whole production process. If one of the member’s suggestions is used to improve the product, they will get a percentage of the sales generated by that product. The originator of the product idea receives not only lifetime royalty, but also 30% of all online sales and 10% of all retail sales. However, those percentages are split between those earlier mentioned members whose feedback from the production process was used.

As you can see, co-creation isn’t that quick and easy get rich solution. It comes with its risks and it can be difficult to manage, but it can also result in products being tailored to better meet the consumers’ needs.

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