Co-creation in organizations: Producing mules not hinnies

by in Marketing, Sales

pexels-photo-90915-largeStubborn as a mule, or so the saying goes.

Despite earning a bad reputation, the mule represents a most extraordinary example of evolution. The long-earned horse look-alike lucked out in the gene pool. A cross between a female horse and a male donkey, it inherited some of the most valuable traits from each of its parents. From the horse, it acquired great strength and size, enabling it to carry large loads. From the donkey, it inherited self-preservation (the penchant to protect itself from harm’s way), enabling it to evade injury and increase its lifespan. It is, in fact, this self-preservation that has given rise to the fallacy that the mule is stubborn.

It’s time to salvage the mule’s poor reputation. In actual fact, the mule epitomizes “hybrid vigor,” a term that describes the phenomenon whereby an offspring exhibits traits that are superior to both of its parents.

Corporations can stand to gain by seeking inspiration from the mule. Crossbreeding can be likened to co-creation in the corporate arena. Co-creation is a process whereby businesses join forces with their consumers with the goal to create value in the form of a new product, service, or other initiative. Like crossbreeding, co-creation can give rise to a final output that is superior than that which could be produced by each “parent” on its own (in the form, for example, of an enhanced product offering, a strengthened brand image, an improved bottom line, etc.).

Regrettably, much like the stubborn mule, co-creation is not clearly understood. Only a quarter of consumers are aware of the concept (an additional 5% are aware of the concept, but not familiar with how it works). To survive in today’s competitive landscape, businesses much become au courant with co-creation, for it can propel them with the “hybrid vigor” to thrive and enhance its “traits,” including:

Innovation potential

Co-creation entails actively involving consumers in brainstorm, design, and/or production processes. Rather than being solely dependent on internal resources, companies can expand their innovation capacity by garnering the insights, creativity, and unique perspectives of consumers. After all, they bring a different set of genes to the table and, oftentimes, know a brand best and can generate ideas that better reflect its needs.

The potential of co-creation to advance innovation has driven many firms to flirt with co-creation. 50% of Fortune 500 companies have made co-creation an integral part of their innovation strategy. In 2009, for example, Coca-Cola, launched its FreeStyle fountain dispenser. The touch-screen soda fountain empowers consumers to create unique beverage combinations from more than 100 different flavors. Flavor cartridges are strategically embedded with RFID chips that transmit supply and demand data to Coca-Cola, enabling it to collect precious data on customer consumption patterns. High demand flavor combinations give rise to the genesis of new innovative product ideas that may be commercialized.

By way of another example, Starbucks launched MyStarbucksIdea.com in 2008 as a web-based platform to solicit new product and other ideas from consumers. From 2008 to 2013, the platform amassed 150,000 submissions, several of which have manifested into real products and services, including free wi-fi, cake pops, and the Mocha Coconut Frappuccino.

Brand building

Co-creation efforts offer valuable conduits to build strong bonds with customers. Developing user-generated content (UGC), an example of co-creation, can prove to be one of the most effective means of increasing brand engagement. Because it come straight from the horse’s mouth (excuse the pun), UGC is more trustworthy (50% more so than other content). As well, it incites customers to believe they have input into a company’s strategy – that they matter.

As part of a 2015 promotional strategy, McDonalds accepted kind words, hugs, and other affectionate acts as payment for their orders. Winners were randomly selected to perform one such “random act of Lovin” in lieu of monetary payment for their order. The campaign “served” over a million people and revitalized the fast food giant’s brand’s perception from 30% positive or neutral in 2014 to 85% in 2015.  It invigorated McDonalds out of a sales slump and, in the words of Deborah Wahl, McDonald USA’s chief marketing officer, offered “a direct way for [McDonalds] to engage with [its] customers.”

Lululemon, like McDonalds, has leveraged co-creation to build brand awareness. As part of its “The Sweat Life” campaign, Lululemon created a Twitter hashtag, #thesweatlife, and encouraged customers to upload pictures of themselves performing yoga poses in Lululemon attire. Lululemon brand manager, Lesia Dallimore, explains, “We created the program as a way to connect with our guests and showcase how they’re authentically sweating in our product offline.” The initiative was a hit, garnering more than 7,000 submissions.

Improved bottom line

Co-creation efforts can also lead to increased resource efficiency. As in the case of Coca Cola’s Freestyle Machine and Starbucks’ idea platform, co-creation can empower a company to reduce its R&D spend.

Co-creation efforts can also enable firms to reduce marketing spends. Consider, for example a campaign launched by T-Mobile back in early 2014 that asked frustrated consumers to post break up letters to their current cell phone carriers on social media and switch to T-Mobile. The endeavor led to 80,000 letters being posted in the first month alone from consumers who were fed up with their current carriers, enabling T-Mobile to recruit the masses.

Chobani, the Greek yogurt company, has also leveraged co-creation to curtail marketing spends. As part of one promotion, it asked customers to submit videos and images of themselves aggrandizing its yogurt. Submissions were shared via multiple online and offline channels, including via Chobani’s website and across billboards. The company credits the campaign for a 225.9% increase in revenue between 2009 and 2010.

 

Co-creation is not without risks and challenges. Without a clear strategy, companies can easily fall short in their co-creation efforts. In 2006, General Motors, for example, launched a contest that solicited consumers to create a commercial for its Chevy Tahoe SUV. Unfortunately, the effort resulted in several “offensive and inflammatory” ads, chastising the SUVs for exasperating global warming effects.

Before engaging in co-creation, follow best practices in order to create the ideal breeding ground. First, offer the right incentives. Monetary rewards are not always best; research has found that co-creation participants are more driven to participate by curiosity and a desire to learn than by recognition and rewards (winners of the failed 2006 GM promotion were awarded trips and tickets to Donald Trump’s reality television show, “The Apprentice”). Second, ensure you have access to a critical mass of participants. This will ensure that the pool of potential ideas – your innovation capacity – is sufficiently large (according to McKinsey, 1,000 and 7,000 ideas is ideal for one product). Third, leverage social media to ensure greater virality and to heighten the potential for increased brand awareness. Research has found that each idea proposed as part of a contest is shared an average of eight times via Facebook, with the average user having 150 friends.

Although the mule has been privy to “hybrid vigor,” a close relative has not been so fortunate. The hinnie, a cross between a male horse and a female donkey (whereas a donkey is a cross between a female horse and a male donkey) has not experienced hybrid vigor. It is smaller, more feeble, and exhibits less stamina than the mule. Before engaging in co-creation, understand the processes involved and ensure you possess the right genes to give rise to fruitful offspring – mules instead of hinnies.

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About The Author

Rebecca Hinds
Rebecca Hinds - View more articles

Rebecca Hinds graduated from Stanford University in 2014 with a M.S. in Management Science and Engineering. In 2013, Rebecca co-founded Stratio, a semi-conductor company developing infrared sensors. The company was selected by the Kairos Society as one of the 50 most innovative student-run businesses in the world.