From co-creation to collaboration

@steven_insites

@tomderuyck

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What to expect from this paper? ………………………………………….………..……………..…………………………………………………………………………………………………….

• An inspirational view on structural collaboration between your company and the market, based on 15 interviews with senior executives of (global) brands from different industries.

• Main reasons why your company should be serious about structural collaboration with your customers.

• A clear overview of what will be key, in order to succeed with structural collaboration.

• An overview of some organisational measures your company will need to take when moving from one-off co-creation to structural collaboration.

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Definition: what do we mean with structural collaboration? ………………………………………….………..……………..…………………………………………………………………………………………………….

This paper describes the success factors of ‘structural collaboration’.

When talking about structural collaboration we refer to the integration of the voice of the customer in all decision-making flows of your company.

In most companies, customers are only allowed to give feedback through traditional market research, at the very end of a decision-making flow.

This paper gives insights on how to involve the customer on an ongoing basis in every single phase of the decision-making flow. We acknowledge that collaboration can also be done with employees, but the focus of this paper is on collaboration with the market.

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The facts about crowdsourcing, co-creation and collaboration Co-creation is hot. In recent years, the world has witnessed a whole host of successful co-creation cases. Doritos allowed its fans to develop an advert to be shown during the Super Bowl. Lays crisps asked their customers to help choose a new flavour and snack manufacturer Mora produced a new croquette in collaboration with its consumers. Co-creation and crowd-sourcing are high on the agenda of the majority of today’s marketers. It is seen as a quick way to experiment with this new way of working. There is nothing wrong with this, but in most cases it doesn’t go any further than being just a trendy marketing campaign. The other problem with all of the examples above: they were all ‘one-offs’. There is no long-term vision nor an intention to collaborate with the customer in a more structural way.

Currently only 3% of all companies have experience with developing new products and services with their consumers. In most cases1, this collaboration starts with a pilot project. If the test is successful, the collaboration can gradually be increased in a more structural manner. Less than one out of ten companies that co-create with their customers also use this collaboration for launching new products. We could say that the focus of co-creation lies mainly in the initiation of new ideas2. But even if consumers are more or less continuously involved in the process of coming up with new ideas, this is still not enough to speak of ‘structural collaboration’. Structural collaboration means that the customer is involved in all aspects of your company’s life.

12011,

InSites Consulting, Social media integration survey.

22011,

Frost & Sullivan, R&D/innovation and product development priorities survey results.

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1. Getting new insights. Exploration of the target group. Listen directly to how they perceive the product and service quality in order to optimize the commercial portfolio. This also implies discovering new market trends and unmet needs from your most relevant customers.

2. The development of new ideas and fine-tuning of existing ideas. Create new commercial value together with the customer. By involving them in the product, campaign or brand development flow, you create a sort of self-fulfilling prophecy. The most relevant customers mainly decide upfront what they will buy.

3. Key role during implementation. Include customers during the implementation phase to make sure that your interpretation of their ideas is correct.

4. Continuous evaluation and optimisation. Use the customer’s voice as a continuous flow of information to improve loads of smaller, tactical issues and to reshape the future of your company with your customer as your primary consultant.

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2

Insighting

Developing

Business Objectives

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3

Optimizing

Implementing

And it pays off: a recent article in the ‘Harvard Business Review’ claimed that companies are better able to solve all their main business problems if they collaborate closely with their consumers.3 The good news is that consumers are also willing to help companies out with this: more than half of them4 want to collaborate with one of their favourite brands around one or more of these issues.

Moreover, recent research carried out at the University of Wageningen5 has shown that products whose packaging is labelled ‘co-created with consumers’ will sell significantly better than equivalent products which do not carry this label. In other words, consumers have more confidence in each other’s judgment than in the judgment of professional experts within a company. And they are probably right. In a recent study, we found that new product ideas that were co-developed with consumers score especially higher on ‘being relevant’ and ‘fulfilling one’s needs’6.

The goal of this paper is to look into the necessary ingredients for a company to structurally get the consumer on board, every single day and for almost all decisions that need to be taken. As a consequence of this intense collaboration between your company and the market, decisions will no longer be imposed from above.

And when the majority of your decisions are taken this way, following consultation with the market, you can really speak of ‘structural collaboration’. The consumer is truly represented in the boardroom. His voice can be heard in every part of your company, a voice that is every bit as loud as the voice of management and staff. You may even want to consider actually appointing a consumer as an honorary member of your board.

32008,

Harvard Business Review, The contribution economy, Scott Cook.

InSites Consulting, Social Media around the world study.

52011, MSc thesis: Van Dijk, J. (30 August 2011). ‘The effects of co-creation on brand and product perceptions’.

Faculty of Social Sciences, Wageningen University, more info: Joycediscovers.wordpress.com 62011, InSites Consulting with Heinz, R&D study.

42011,

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The objectives of structural collaboration Companies that are working at structural collaboration with their customers have four clear objectives in mind with this approach: 1. Create better products, improve the customer service and communicate in a more impactful way.

This is by far the most important objective for large brands for collaborating with consumers. By succeeding in this objective, the overall performance of the organisation will increase.

2. Become more agile. By involving customers in every phase of a decision-making chain, things move faster.

Companies can make better decisions faster and have a better feeling of what will be needed to be as successful in the future. A big plus in today’s fast moving world.

3. Add consumer feeling to gut feeling. A lot of managers rely on their gut feeling, which is wonderful.

Structural collaboration should add ‘consumer feeling’ to it. By collaborating so frequently, managers create the ability to put on the consumer’s hat during a meeting and think as the customer. Thus allowing them to make more consumer-relevant choices.

4. Marketing & PR. Companies that are listening and that involve consumers in decision-making are popular nowadays. Tell all your customers that you take decisions based on consulting other customers, and they will like you more. Leveraging the internal collaboration platforms towards the external communication has an impact on the overall perception. This is not the main goal, but a very welcome indirect effect.

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An evolution, not a revolution It’s clear that structural collaboration with consumers is not about having the right technology to make it happen. It is about a mentality shift for most organisations.

A shift from a ‘we know best’ attitude towards an open mentality. The most beautiful results of collaborating companies is the creation of what we just called the ‘consumer feeling’. Adding the consumer feeling to the gut feeling of companies is the biggest change one can achieve through structural collaboration.

To reach this situation, a given number of steps needs to be taken. Based on our research, we learned that all companies started small and evolved towards bigger and bigger collaboration projects. In the end, collaboration was really embedded in their organisation. It was a process of change, not a revolution.

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1st-time try-out

Project-based collaboration

Structural collaboration

1. Collaboration always starts with a first-time try-out. Companies organize a co-creation project in which they invite the customer to participate in one specific project. Most occurring examples are the co-creation of a new product, a new package or new marketing communication.

2. If this try-out is experienced as a success, the second step is to apply collaboration on a project-based level in the organisation. In this stage, companies have the habit of involving customers in every important new project they work on.

3. After a while, it becomes hard for them to take decisions without the voice of the customer during the process and they decide to collaborate structurally.

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Five pillars for Collaboration Based on our interviews, we concluded that there are 5 crucial pillars if you want to be successful in the evolution towards structural collaboration.

1

4

Fit with the company culture

Internal

2 Select the right participants

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3

External

C-level involvement, support is not enough

5 Measure impact

1 Fit with the company culture

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During our interviews, everyone mentioned company culture as a very important pillar in evolving from cocreation to structural collaboration.

Collaboration with employees and customers is easier if your organisation is characterized by an open and positive culture.

Culture

However, this does not imply that collaboration is only possible in certain companies. Collaboration is possible in every company, but the current culture determines where you can start. To be successful with collaboration it is important to select an approach which fits with the current culture. Don’t try to change the culture through your first collaboration projects. For example, if you have a culture where low cost is key, make sure the objective of the collaboration is to reduce the cost of other expenses (e.g. doing less ad hoc market research). If you are a company which has connecting with its target group high on the agenda, add consumer connectivity as an objective.

Collaboration

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In other words: let the collaboration objectives and the way of working (duration, intensity and level of involvement of different departments) fit with the existing culture. This approach will allow you to start. After a while, the company culture will change automatically, project by project.

Employees will be more connected with consumers. This will result in direct feedback which will allow better and faster decision-making. In the end, this will bring in more money.

As a consequence, the opinion of the customer will increase in value and your company will evolve towards an open, collaborative environment.

2 Select the right participants

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There are two possible types of customer collaboration : an open online platform where everyone can participate and a closed online community where you select the people who can join in.

In the large open communities you have little direct control over who joins in and who doesn’t. The members come together in a very spontaneous way to discuss particular subjects that are of their interest. Your role with regards to these people is simply to listen. This will allow you to discover a series of unfulfilled market needs, which may eventually lead to new products and services. Of course, you are also free to ask them questions, but you must always remember that these are open communities – anyone else may be listening to their answers!

Companies that want to involve the customer in more strategic decisions and who have a need for in-depth feedback, tend to work with a closed online community with a limited number of relevant customers. If you want to solve a specific management problem, it is better to discuss possible solutions with a smaller, closed group of 50 to 150 people with a keen interest in your category. It could also be a group of your most ardent fans, fans who you have carefully vetted and selected yourself. The major advantage of this approach is that you have everything in your own hands – and this is advisable if you don’t want the entire world to know what decisions are being taken.

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It is important to acknowledge that not every customer will be able – or is suitable – to help you solve management problems. To give your company access to the right advice on a daily basis, you need to listen to the right (and relevant) people. For your communities you should seek to attract people who can offer added value. The minimum condition is that they have a clear commitment to the company and what it stands for. They might be experts in the sector, knowledgeable and enthusiastic amateurs in the sector or just big fans of your brand. Research has shown that without this kind of emotional commitment people seldom have enough interest to contribute effectively to an online community7. In other words: you need to talk to people who are interesting and interested. If they don’t have an opinion or if the natural motivation to take part is missing, your community will not achieve what you want it to. But natural engagement alone is not enough, in order to make your community a real success you need to manage it well. A number of things are important: be open and transparent about the goals of each project, listen actively (allow participants to put their issues on your agenda too), make it a fun experience (after all people are doing this in their spare time) and give enough feedback on what you did with their answers.

72010,

Ludwig, De Ruyck, Schillewaert, InSites Consulting and the University of Maastricht.

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If you really want to progress to co-creation of new products or services with your community, you need to add the following two dimensions to your selection criteria, resulting in two complementary groups of co-creators8: • People with innovative vision and social independence: These people formulate their vision about innovation independently. They base this vision solely on their own experience and opinions, without taking account of what might be ‘popular’. This results in very pure ideas. They like to try new things and generally have more extreme views than the ‘average’ customer. As a result, they will sometimes come up with revolutionary ideas.

• Social influencers: This group discusses innovations whilst taking account of what their social environment thinks. Influencers are regarded by this environment as creative specialists, who are quick to see the advantages of new innovations. Consequently, their opinions about such innovations are frequently asked – and followed. They like to be occupied creatively with new products and think that it is important that others also approve of the products they like to use. They converse with others proactively on these matters. It is therefore clear that this is a very relevant group for collaboration purposes. It is also a group with significant conversation potential. This means that they will not only help with the initiation and development of new ideas, but that they will also start conversations during the implementation of these ideas. They have a sixth sense for the innovations that will catch on and those that will not. In this respect, they filter the ideas of the first group.

82010,

Schillewaert, De Ruyck, InSites Consulting

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3 C-level involvement, support is not enough

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One of the critical success factors is the involvement of your top executives. To implement collaboration in a credible way in the market, there is need for tangible proof of the results of the collaboration. Consumers want to see a new product, a change in service or communication. If they feel their efforts have no impact, they will drop out. Consumers participate in this type of project to get recognised by a company, not to get rich.

In order to make sure the feedback of consumers is used during implementation, the involvement of your C-level is vital. But top management support alone is not enough.

Based on our interviews, we can conclude that the most successful collaboration cases are all stories where the CEO has an active role, both internally and externally. Internally, he or she leads by example: consumer feedback is used to make important decisions. To the external world, he is the face of the company who reports back on decisions that have been made.

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CEOs who invest in collaboration want to add consumer feeling to the gut feeling of the organisation.

Many organisations haven’t a clue what the consumers think. As a consequence market research is needed for every small step. The moment your organisation gets a consumer feeling, managers can look at the world through the eyes of the consumer, which increases speed and decreases costs of ad hoc research.

4 Internal communication is not enough. Internal = External

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Sharing your collaboration work with the entire organisation and the rest of the world has a number of advantages. Next to an increase in motivation of your management, it will also increase the motivation of the participants of your communities. Furthermore, research has shown that consumers have a higher trust level towards and a better perception of brands that co-create. So there is also a commercial benefit to leveraging your efforts externally.

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Outside the company

Managers show more interest in a project or approach that gets external credits than in a project with a sole internal focus. In other words: make sure your structural collaboration is not completely taking place behind the scenes of your organisation.

Within the company

Who

Board

How

Brand / Product

Movies & infographics

management, R&D …

Workshops & reports

All departments

Consumer stories: posters, intranet…

Consumers

General & trade / niche press

Brand fans Adversaries

New & traditional media Crisis management

There are a few communication tactics you can apply to increase the internal and external impact of your collaboration process: • Meet up with participants: Collaboration occurs on a digital platform but it is an interaction between people. To increase the interaction and the emotional bondage, make sure your employees meet up with these people in the real world as well. Show them around in your company, tell them about your challenges and treat them like part-time employees.

• Go for tangible results: If you work together with your consumers on a structural level, make sure you have concrete deliverables. These results (e.g. new products, insights, advertising, packaging…) should be shared with the world to make the collaboration aspirational for the market and for the involved manager.

• Bite-size & creative reporting: Share the results of your collaboration in a short, compelling and creative way with your employees. Make sure it is easy to digest and to share.

• Apply content marketing techniques9: Don’t communicate once or twice about your collaboration, but talk about it more frequently. Use three levels of content: big content campaigns (e.g. when you have big news: launch an initiative or show the end result), content projects (e.g. a theme you talk about for a few days/weeks) and content updates (small, daily updates with relevant information).

92012,

InSites Consulting, A six step content marketing model (http://www.slideshare.net/stevenvanbelleghem/)

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5 Measure impact

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• Success of innovation, impact of communication and improvement of customer service: By involving customers early in the process, your company will take better decisions. Product launches, new advertising campaigns and so on should have a higher success rate than before the implementation of the collaboration.

To keep the collaboration flow going, there is need for evidence that the approach works. Therefore we advise to use a number of clear success indicators that you can measure during the implementation of structural collaboration in your organisation. There is no standard list of KPIs to use; they differ from company to company, as they are closely linked to the company culture and the company’s (long-term) objectives. There are a few KPIs that apply to all companies to follow up on the impact of structural collaboration:

• Cost reduction: By integrating the voice of the customer in the entire decision-making flow, the cost of ad hoc market research can be reduced. Next to that, by creating better products and services based on the input of the market, the impact of word-of-mouth will increase, which may lead to lower media budgets.

• Consumer feeling of the organisation: You can measure to what extent your management has a better feeling of the attitude and behaviour of your target market. The goal is that managers think as consumers and improve their performance through this newly required skill.

• Brand perception: Listening actively will humanize your brand and make it more popular.

Define your KPIs, measure them and celebrate success!

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Conclusion: need for a change in internal implementation processes ………………………………………….………..……………..…………………………………………………………………………………………………….

Collaboration should lead to decisions which are taken through cooperation between the market and your company. The proof of structural collaboration is in the implementation of the ideas. In order to succeed in this crucial step, there is need for a change in the internal decision streams. The challenge is to integrate consumer feedback and input in every phase of the decision cycle.

Remember that structural collaboration does not come overnight. It starts with a try-out which fits within the existing culture. Make sure that, as from the start, you know what your next step will be. In other words: it is important to start with a try-out, but it is equally important to start with a long-term view. Make sure you know where you're going. After the try-out, it is a matter of including collaboration in projects where the fit feels right. People (internally and externally) get bored rapidly. Make sure you have a flow ready in your collaboration process to keep the conversations going. Plan with room for flexibility. Once you completed a number of successful collaboration projects, the possibility to move on to structural collaboration arrives.

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Make sure that, along the way, you take these last tactical tips into account to make collaboration work: •

Have clear objectives in each collaboration project. Make sure you don’t collaborate just for the sake of it.

To get feedback of consumers in the decision flow, the objectives have to be very clear and in line with the business goals.

•

Involve all stakeholders early in the process. The more departments you involved at the beginning of the process, the better. In order to integrate the collaboration flow in the decision flow, it is crucial to have a buy-in from the relevant teams.

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Manage expectations. Collaboration won’t bring in the next big idea for your company. Customers are great sparring partners, but don’t set the expectations very high. Make sure that during the integration of their feedback in the decision flows, everybody is aware of what to expect from the collaboration.

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Have a community manager. Make sure you have somebody assigned to manage the community. This person is responsible of managing the conversation with participants of the collaboration process and of sharing the insights internally. He or she brings the consumer’s voice to life within the company.

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Create internal and external credibility. By delivering results and integrating the voice of the customer in your decision flows, you will gain credibility among the participants of the collaboration platform. Credibility among employees will also grow as they will see that collaboration adds value. Marketing your collaboration efforts is not a bad thing, but it should not be the only thing.

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List of interviewees:

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Caroline Van Hoff, Concept Development Manager, Heineken International

Charles Hageman, Research Manager, KLM Erkinheimo Pia, Global Collaboration Manager, Nokia Graham Kahr Social Commerce Product Manager, Zappos Hans Similon, Evangelist, Mobile Vikings Joella Marsman, Marketing Researcher, HJ Heinz

Marc Fouconnier, CEO, Famous Marjan Rintel, VP Marketing & Brand, KLM Martijn Van Kesteren, Yunomi Leader Benelux, Unilever Pascale Mignolet, International Market Research Director Coffee & Tea, Sara Lee Philip Rogge, CEO, Microsoft BE Piet Decuypere, CEO, Danone Pol Van Biervliet, CEO, Cisco BE Stan Knoops, Head of Consumer Insights Europe, Unilever R&D Tormod Askildsen, Senior Director Community Engagement & Events, Lego

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Steven Van Belleghem Managing Partner, InSites Consulting Author of The Conversation Company & The Conversation Manager

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Thank you & open for all feedback ………………………………

Steven & Tom

steven@insites-consulting.com @steven_insites

Tom De Ruyck Head of Research Communities, InSites Consulting

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tom@insites-consulting.com @tomderuyck

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