Wednesday, July 23, 2008

The Growing Importance of Cocreation

I recently wrote about DoubleClick’s effort to get users to help design their new site. That’s an application of what is often called cocreation. The current edition of the McKinsey Quarterly has an interesting article on the subject (note related articles listed on the sidebar).

Their thesis is that cocreation is in its early days and companies are trying to determine how best to take advantage of the collective wisdom of their customers. Amen to that! According to the article,

Our research suggests that 25 percent of Western Europe’s Internet users now post comments and reviews about consumer products of all kinds (exhibit). User-generated media sites are growing in numbers of visitors and participants by 100 percent a year, traditional sites by perhaps 20 to 30 percent. (p 6)

This chart also once again illustrates the importance of word of mouth as well as the importance of soliciting consumer feedback, especially by outbound phone calling. The growing number of customers who are willing to interact with companies online is obviously of great importance.

Their research into uses of Second Life suggest that 1 in 10 members is already cocreating with companies, mostly helping to design new products and services. They go on to say that most of their respondents didn’t know that was a possibility and, when informed, 60% would be willing to interact with corporate entities. I’d add ones that they trust and in situations where they see benefit from the interaction.

If you have any doubt that the same phenomenon applies in the US, download the “User Reviews a Must” whitepaper from PowerReviews. In it PetCo VP of E-Commerce, John Lazarchic says:

“No matter how many reviews they receive customers continue to add their voice. A product may already have a rating of 4.9/5 but someone will still write another positive review.”


The McKinsey article also identifies issues that need to be dealt with in creating community to participate in cocreation. They are:

•Attracting and motivating cocreators
•Structuring problems for participation
•Governance mechanisms to facilitate cocreation
•Maintaining quality

I’ve frequently pointed out that not all audiences are willing to participate (think older consumers) while some are eager to take part in collaborative efforts (think members of B2B vertical markets).

Looking around the web to see who else was talking about cocreation, I came across Cisco’s Executive Thought Leadership page and an interview with Prof. Thomas Malone of the MIT Center for Collective Intelligence. He points out that, as a result of the ability to share information at low cost, businesses can enjoy the economic benefits of large scale coupled with the human benefits of small scale which include flexibility and decision-making power. It’s a video worth watching. As you can see, there are other interesting ones on the site.

Is focused cocreation perceived to have some of the same dangers to the brand—mainly that people will say bad things—that opening to comments and ratings has? Maybe. However, good cocreation, as McKinsey suggests, directs the collective energy to making positive suggestions for the future. I’m confident it also leads to further bonding with the brand. Why not? The customer now has a stake in resulting products and services. That’s two highly desirable outcomes!

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