The service-dominant logic introduced the concept of co-creation, or customer engagement. The service-dominant logic assumes that the customer is always a component of an organisation’s value creation. In recent years, the possibilities for steering and integrating the customer into value creation have increased considerably. That’s why a definition of co-creation is important for the successful use of this model. So far, however, this perspective has hardly found its way into the literature. Organisations are wrongly, or in a shortened way, regarded as solely value-creating systems that provide the customer with value, which they can obtain through a transaction in exchange for money. If the value the organisation provides meets the customer’s expectations, or is higher, the customer is satisfied and the organisation is accordingly customer-centric. Above all, the success wave of agile working has led to aligning offerings to customer needs already being misunderstood as customer-centric. This old-fashioned understanding can also be observed in many ‘modern’ start-ups. Aligning offerings to customer needs as far as possible is not only sensible, but also contributes to an organisation’s ability to survive. Aligning offerings to customers’ needs is a necessary, but not a sufficient, precondition for an organisation’s customer centricity. So customer centricity refers not only to innovation or offering management; rather, it is important to take a far more comprehensive perspective on the possibilities of value creation in the context of customer relationships. As early as the 1990s, the conclusion was reached that customer integration (co-creation) is of central importance for an organisation’s customer centricity. Customer-centric organisations therefore, in contrast to non-customer-centric ones, involve the customer in business-model, brand, experience and offering development, but also in all further processes in the organisation and its network. Here, customer centricity does not simply aim at integrating customers in the sense of relationship management. It is important to integrate customers into the processes in such a way that the value for the customers, but also for the organisation, is systematically increased.
Definition of co-creation
Co-creation is a process in which the customer is integrated as a resource into an organisation’s value creation. There can be different degrees of interaction.
Fundamentally, more and more customers are willing to bring their own resources into organisations’ value creation. The definition of co-creation therefore also focuses on the process. One example is the development of the open-source movement. In B2B industries, work has been done in this form for years. For example, suppliers usually work with their customers on new solutions over several years. In B2C industries, too, co-creation is now increasingly being used. Technological developments have given this form of interaction between customers and organisations a new boost. Co-creation is not without risk, however, especially when it is not really clear what value is to be created. It is interesting to observe that organisations provide more and more touchpoints and processes to engage in co-creation with the customer. A clear objective is, however, rather rarely to be discovered. In the simplest case, this can lead to no value being created, or the costs for the organisation not being amortised. But it is entirely possible that this aimless approach also causes harm to the organisation, when customers, enabled by the organisations, can express themselves negatively on the organisations’ own platforms. So, as always in management, a clear target system and a clear strategy are needed for how, where and to what extent co-creation should be conducted. Here, the value increase and the steering possibilities for the organisation must be taken into account. Generally, three dimensions of co-creation have so far been distinguished. The use of customer insights, e.g. based on customer surveys, is to be regarded as a kind of co-creation. Other organisations use customers in the context of co-creation workshops in the development of business models, brands, customer experiences and offerings. Still other organisations have the customers create the offering (e.g. Wikipedia). So far completely underestimated is the use of co-creation for selling. Some organisations, such as Swisscom, have recognised the added value of co-creation and use it consistently. More and more offerings have a modular structure and/or are surrounded by a ring of value-added services. Not every customer wants or needs all the services. Swisscom has established a co-creation process for selling, in which, with the help of the customer’s management, the respective offering is defined jointly in the context of workshops. In addition, organisations provide user groups to other customers as an aid for using the offering.
Few organisations yet set deeper value creation with the customer as a goal. Here it is important, as a first step, to establish the definition of co-creation throughout the company as far as possible. This underlines the statement that most of those responsible are not clear that customer centricity today goes far beyond customer satisfaction. At its core, customer centricity aims, besides continuous transformation, at integrating the customer into value creation in as value-creating a way as possible. Here, every individual organisation has different possibilities. Besides the fundamental appreciation of customers, these should be integrated into value creation as optimally as possible (co-creation).
Co-creation can be viewed from the perspective of the customer or the organisation. It is to be understood not only as the integration of the customer into an organisation’s service-creation process, but also as the integration of the organisation into the customer’s life. Value from the organisation’s perspective is defined as customer value, and value from the customer’s perspective as customer net benefit. An organisation can only provide value. The customer is always the actual creator of the value. Value creation, like the other elements of customer management, is moreover made up of planned and emergent activities. For this reason, the close connection between co-creation and customer experience management needs to be observed. An organisation can try to design the respective experiences through specifications, but due to the unplannable influence of the customer, the experiences will always have a different value outcome.
Co-creation is distinguished on four levels:
- Customers can support the organisation regarding the design of value provision.
- In addition, they can provide a greater or lesser share of the value themselves.
- Referral as a kind of co-creation in selling is also to be taken into account.
- Organisations additionally use customers to support other customers in using offerings.
Here, the four levels are closely connected with one another. A referral can comprise the sales aspect in the form of a simple purchase recommendation, but also the support aspect in the form of a precise description of using the recommended offering. Co-creation is closely connected with the manner of what reference point the customer should have in the interaction. The following forms of interaction can be distinguished:
- Customer with themselves
- Customer with other customers
- Customer with a topic
- Customer with the organisation’s network
- Customer with the organisation
The focus is usually on value creation between customer and organisation. The further explanations also concentrate on this form of interaction. It should be taken into account, however, that, despite this chosen focus, the customer always interacts more or less with the entire network of an organisation, or with its ecosystem. This network perspective is an important element of the definition of co-creation.
