Co-creation occurs when businesses co-develop products with a multitude of stakeholders (one being their clients) to produce mutually beneficial outcomes (i.e. products and services). This transparent and inclusive business approach has gained traction in recent years. Why you ask? Well, in a world where consumers have never been savvier and globalization is in full throttle, it is no longer reasonable to assume that a small subset of people within a company can fully understand what is best for a larger set of external people.
In LaunchLeap‘s case, the term co-creation can be interchanged with customer collaboration. We’re stressing the term collaboration, since our mission is to turn product development from a one-way monologue (company pushes out product to customer) into a two-way discussion (company listens to its customers and a mutually beneficial product emerges).
What are the benefits? This kind of approach is in fact a competitive strategy, since it allows businesses to create products that reflect the market needs more accurately. Risks are mitigated and less time is spent on new product development. More importantly, for consumers, it grants them access to participate in the creation of new products, giving them more control and power than ever before.
How is this different from mass customization? To be clear, co-creation or customer collaboration is not mass customization, whereby businesses create products tailored to each and every client’s specific need. Mass customization can be illustrated through Dell’s online shopping experience: different parts of the computer are assembled based on the personalized features the buyer selected.
How does this work? Co-creation of new products can, quite technically, happen in two ways: front end and back end new product development. Front-end new product development is focused on generating new ideas and concepts, as well as selecting existing ideas to be further explored. Back-end development is related to product design refinement and testing.
There are many different examples of how real businesses are applying these strategies, so tune in next week for a run-through of front-end co-creation, along with a few examples!