Co-creation with customers, as exemplified by Lego, is an approach that is increasingly relevant thanks to digitalization. What are the most efficient models to implement co-creation in a digital environment? How to co-create? With whom? Why?
Pierre Dal Zotto is an assistant professor of information systems management and an expert on information and innovation management at Grenoble Ecole de Management. His research focuses on creating value through goods and services with the support of new technology. He’s also a member of the Lego Ideas community and a facilitator for Lego Serious Play at the GEM Playground.
“Co-creating value means producing a product or service with the cooperation of customers thanks to collaborative resources. This process is hardly new, but it has taken on a new dimension in the years after 2000 thanks to the advent of new information technology, which facilitates the process of uniting individuals into thematic communities. Co-creating value through digital resources has caused a disruptive change in classic innovation and marketing approaches. As a result, customers can more easily act as both users and contributors. The digitalized process has broken down barriers and facilitated interaction,” explains Pierre.
Two customer categories
There are two type of customer categories: contributors who co-create the design, applications, etc., and consumers who benefit from products and services offered by a company. “These categories offer different perspectives. The contributing customer will offer for example an evaluation. A consumer customer is one who doesn’t contribute. Both categories play different roles in the co-creation process,” adds Pierre. These categories offer companies various approaches to co-creation which can be explained through the four strategic initiatives for digital value co-creation:
- Customization initiatives: e.g., personalizing your Nike sneakers
- Reputation initiatives: relies on community evaluation and discussion tools. For example, Décathlon has committed to re-designing a product if it receives an overall negative evaluation from customers.
- Sensing initiatives: based on data analysis tools to propose recommendations for products and services. “We can cite initiatives by Netflix and Amazon whose offers are based on profiling. In 2003, Amazon estimated that 25-35% of its turnover was generated simply through its recommendation tool which relied on consumption analysis. That’s an enormous statistic.”
- Community initiatives: using open source or co-development tools that integrate customer contributors to the development process for goods and services.
“Customers are more motivated to pay for a product or service that they helped create. These products are a better match for customer needs.” Companies like ebay, Airbnb or Blablacar are examples of success built on a savvy combination of community, reputation and sensing initiatives. Depending on how you mix and match them, these initiatives are not mutually exclusive and can work quite well together.
The Lego example
Lego is a leader in terms of co-creation with customers thanks to tools such as its website LEGO Ideas. Dinosaurs Fossils Skeletons, Food Stand Diners, Queen Victoria Cruise Ship, and Playable Lego Piano are some of the latest Lego models evaluated by brand enthusiasts during 2018. Their success will be determined by the summer of 2019. The LEGO Ideas tool is based on a shared digital tool that enables customers to freely download Lego Models. The tool enables users to construct and deconstruct models without affecting the initial model.
“Instead of categorizing customers and having them test ideas in focus groups, LEGO Ideas uses a digital tool and community to unite Lego enthusiasts and receive their evaluation of new Lego projects. Once a project receives 10,000 positive votes, Lego launches the model for sale through its online stores,” explains Pierre Dal Zotto.
Customers becoming creators: how firms leverage technology and consumers for new value