Today, co-creation is gaining the attention of Australia’s CEOs as a model that emphasises mutual organisation-customer value. Its time is more than welcome and it will be a key business advantage for those organisations who deploy with a sense of urgency in an era where consumers have more power than ever over the organisations with whom they interact.
Co-created value arises in the form of personalised, unique experiences for the customer and enhanced performance such as retention, acquisition, yield and customer advocacy for the organisation.
It sits within the Vendor Relationships Management field which argues that customers and organisations should share, combine and renew each other's resources and capabilities to create value through new forms of interaction and learning.
Co-creation platforms are now being specifically designed to address four critical problems for customers and businesses:
Problem: Poor Customer Engagement
- 65 per cent of Australian customers state they have an average to poor experience with organisations.
- 72 cent of Australian customers state they would like to customise their own experiences.
- Organisations currently have no mechanism to tailor the whole of the customer’s experience to a Segment of One. CRM currently can only provide mass segmentation and targeted selling.
Problem: Customer Retention
- In the essential services sector, including banks, utilities and telcos, the current rate of customer attrition is about 23 per cent per annum.
- Retention processes are costly and inefficient. For telcos it costs about $600 to retain a customer which is the same as what it costs to acquire a customer.
Problem: Customer Acquisition
- Customer acquisition is costly and sales people lack effective tools to engage customers. In the essential services sector it costs on average $600 to acquire a customer.
Problem: Customer Data
- Organisations don’t know what customers actually want, they have siloed views of customer and lack data and insights related to the whole of experience for customers.
Here’s an example of a Co-creation story…
Romeo is a disgruntled or disengaged Telco customer. The telco notes that Romeo has not renewed his plan and sends a notification to the co- creation platform which then sends a personalised email to Romeo, or triggers a phone call from a Creator (employee), Juliet. Romeo is invited to enter the Co-creation Lab where Juliet meets him. The platform has already loaded into the Co-creation Lab the existing plan Romeo is on plus a number of other options across: product; communications; processes; channels; people interaction (how Romeo wants to be treated by the staff at the Telco) and the price Romeo is willing to pay for the whole of experience he co-creates with Juliet.
Juliet is able to have an online conversation in the Co-creation Lab in real-time to make sure she supports Romeo design the best experience for him and one that the Telco can deliver. Juliet can also bring in other expert Creators from the business if needed.
An ideal co-creation platform should then equip Juliet with all the options that the Telco can actually deliver. Juliet selects them from an existing menu (without Romeo seeing this part of the system) and they become live options for Romeo.
Romeo’s experience is then confirmed and the information is then automatically passed into interfacing systems such as the CRM system, the contact centre, other databases, delivery systems and product management. Machine learning then comes into play enabling organisations to predict the whole of experience that Romeo or other people like Romeo want.
So unlike the traditional Romeo and Juliet relationship in which they both die, much like how many existing customer-organisation relationships are today, in this story, Romeo and Juliet are united…. no longer star-crossed lovers…. they are Co-creators.
Co-creation today is regarded as a disruptive business model, challenging the fundamentals of the previous military and industrial models of business where customers are passively segmented, targeted, made captive, branded and given terms and conditions. For both consumers and business alike, let’s harvest the opportunity and reap the rewards.