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LEAD Innovation Blog

Read our latest articles on innovation management and innovation in a wide range of industries.

Date: 30-Apr-2018
Posted by: Angela HENGSBERGER
Category: Innovation process

Co-Creation: How to integrate your customers into the innovation process

 

Customers have more and more know-how, are more critical and demand simple solutions that can be implemented immediately. Innovations that meet these needs cannot be provided by isolated R&D departments. Read this blog post to find out how you can use co-creation to involve your customers in the innovation process.

"The product of the future is conceived by the customer himself", says Thorsten Posselt, head of the Fraunhofer Center for International Management and Knowledge Economics and Professor of Innovation Management and Innovation Economics at the University of Leipzig in an interview. This statement not only reflects the spirit of the age in innovation management but is also very conclusive: The consumer is the one who should buy the product later. He knows best what he wants and what he's looking for. It is therefore only right and proper to become part of a team that develops precisely those ideas into products.

 

Structure prevents co-creation

Of course, the economic practice is different. The proportion of innovations in which companies let their customers participate actively and substantially is now very manageable. LEAD Users, or even lead users who developed prototypes themselves, brought them to market maturity and created cash cows for an entire industry, are always there - just think of the inventors of mountain bikes. With such large litters, however, the inventor with his idea was in the foreground and the entrepreneurial structures had to subordinate themselves to both. When established companies are looking for the geniuses among their customers to develop innovations together with them, the biggest obstacle is the operational structure. The phrase that working life would be quite bearable if only the customer did not exist is certainly never meant to be quite serious, but still more relevant than just a stupid joke. With such an in-house mindset, any co-creation program that involves customers in the innovation process is doomed to failure from the outset. But what possibilities are there in theory to involve customers outside of observations, surveys, focus groups or serious complaints management? Among a multitude of possibilities, we have selected 3 formats that seem to be particularly interesting.

Handbook 500 Ideas in 4 months

 

1) Communities: Customers become fans who want to help shape the community

Advertising has the task of turning people into buyers. But sometimes consumers find certain brands so attractive that they turn into real fans. And fans can't be disappointed a) and want b) to be employed. The most popular topic is the brand itself, its future and the possibilities of being able to influence it. Lego shows how such a community can work with Lego Ideas for. Whoever has an idea must promote it to the community. If the brainwave is supported by more than 10,000 community members, the idea is also produced and marketed after an internal examination. A completely different, at first glance stiffer form of customer communities is the so-called customer advisory council. Here, a company gathers selected customers in a committee. These customers can stimulate product or service improvements or accompany a company's change process. Many transport companies have customer advisory boards. However, this form of co-creation is suitable for every industry: for example, the Ergo insurance group also maintains such an advisory board.

 

2) An innovation contest generates good ideas and strengthens customer loyalty

We all think we have good ideas and we all love competitions. With an innovation contest you can now use both human inclinations for your own purposes. You can read about how this format works in this blog post. If you advertise an innovation contest among your customers, your company will not only benefit from the many new approaches you could develop into innovations. No less important are the following advantages that this format generates:

  • The ideas submitted will give you an impression of where your customers really put their shoes.
  • An innovation contest among your customers generates enough content that you can distribute in the media. Your company is thus automatically in conversation. In addition, you can position your company as an institution that really cares about solving its customers' problems.
  • The format is also suitable for making contacts with high potentials. Whether it is wise to entice good employees away from one's own customers must be considered.
  • An innovation contest strengthens customer loyalty immensely. You give your customers the opportunity to present their ideas to the public. This is a very positive experience for all participants - even if you are not at the top of the podium at the end.
  • You also strengthen your internal innovation culture through an innovation contest. This is simply because many employees feel challenged by the external "competition".

 

3) Proactively search for co-creation partners who will become your customers

With this method, the customer with whom you want to co-creation does not yet exist. At least the partner is not yet your customer, but has to become one. How this works is best explained by an example from practice: The smartphone is already an all-rounder today. But in one, two or three years' time it will have functions that we do not even dare to think of today. The consequence of this is that the consumer simply no longer needs certain devices. At least not in the form in which these devices are offered today. The camera is something like this. More and more Austrians are shooting their pictures in everyday life with smartphones rather than cameras. This change in behaviour naturally has a major impact on a manufacturer of high-quality cameras such as Leica. The management became aware of this and was looking for a way to do justice to this changed consumer behaviour. Building their own smartphones was out of the question, which is why the traditional company was looking for a partner to develop an innovation. This should satisfy the customer's wish to shoot really good photos - just pictures in Leica quality - with the smartphone. After a kind of bridal show, the Chinese smartphone manufacturer Huawei was found to be a suitable partner and consequently also a customer for the optical components. Commenting to the press, CEO of Leica Camera AG, Oliver Kaltner, said:"The technology partnership with Huawei offers Leica Camera an excellent opportunity to integrate its proven optical expertise into new product segments and open up exciting business areas in the field of mobile devices. Of course, this third method is very individual and usually requires a business model innovation. But what isn't everything you do for a new regular customer or partner?

 

How to find the right customers for co-creation

In order to develop an innovation together, the choice of a partner is naturally decisive for success. Not every company will be able to proceed as strategically as Leica has done. Depending on the co-creation format, a company may also have to deal with many partners. How you get to the perfect co-creation company also depends very much on the chosen format.

In an innovation contest, for example, it is important to promote the competition in precisely those media that your customers trust. With communities, you have relatively few choices. Members who do not help you with your innovation projects can only be excluded by means of safety loops (e. g. to check the idea for its feasibility). However, if you don't make the reasons for exclusion plausible, you can go back in time and find yourself in a shitstorm - as Henkel and Pril have impressively proven. If your company has only a few customers with whom you are closely connected, your knowledge of human nature should be sufficient to find the right partner. However, many companies have reservations about asking their customers for advice - because they want to offer them ready-made solutions. Experience shows that this fear is in most cases unfounded. After all, who doesn't like to be asked for their opinion? Especially when he helps to improve products he uses himself?

 

Conclusion: Co-Creation: How to integrate your customers into the innovation process

So many companies have already promised to put the customer at the centre of their attention that we all can no longer hear this assertion. But there is still a deep gulf between assertion and action. And unfortunately, in too many companies the customer is still unconsciously regarded as the most important disturbing factor. Thanks to globalisation and digitalisation, we are increasingly dealing with companies in Central Europe in markets where customer orientation is more important. Anyone who wants to be economically successful will therefore have no choice but to take the customer seriously. Co-Creation is not only an innovation method, but above all a customer orientation proven by actions. That's why you should deal with it.

500 Ideas in 4 months

Angela HENGSBERGER

Born and raised in Vienna. Since 2012 she has been in charge of Business Development at LEAD Innovation with the functions marketing, sales and communication.

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