In the last months, my colleague Tom De Ruyck and I did some research on structural collaboration between companies and customers. We’ve interviewed 17 C-Level executives working at 17 organizations, operating on a global scale. We wanted to get a clear view on the new evolution of structural collaboration in 2012 business live: in this article you can read our most important findings.
We all know that collaboration is not only possible with clients, but that it also can be done with employees. The focus on the research we discuss now, is on the collaboration between a company and a customer. Collaboration is one of the 4C’s I’ve introduced in my new book, The Conversation Company. This research is done, to fully understand this important dimension.
Co-creation, crowdsourcing and open innovation
Co-creation is hot. The last years, we’ve seen a lot of very inspiring and successful co-creation cases getting a lot of attention in the public sphere. Doritos allowed consumers to develop a commercial for the Super Bowl. Lay’s chips asked consumers for new flavors and snack manufacturer Mora produced a new croquet together with consumers. Co-creation has reached, at this point in time, the checklist of many marketers. And yes, it’s smart to experiment with this new way of working. But… we think and feel that it should go further than just campaigning, as is the case in the examples I’ve described above.
In a recent survey, we found that 3 percent of companies have experience with the developing of new products together with consumers. In most cases, this collaboration started as a pilot project. When the project is a great success, collaboration efforts are being intensified. We also saw, that only 8 percent of the companies that are actively co-creating is involving their clients into the launch of a new product. The focus on co-creation is in most cases the developing of new products. But even if consumers are involved in continuing co-creation processes, we can not say that there is a structural collaboration process taking place.
Structural collaboration is the type of collaboration in which customers are involved in ALL decision processes within a company. It’s the brainstorming about new products, it’s actively giving input about new consumer trends in the market, it’s the mapping of touchpoints and giving feedback on how to make them more conversation worthy, it’s the participation in a content strategy, it’s the co-creation of a new advertising campaign. And…. Structural collaboration can also be the involvement in price-setting. Not by you, but by your customers!
In a recent Harvard Business Review-article the author stated that all company questions can be better addressed by companies who have a willingness to collaborate with their customers (Scott Cook, ‘The contribution economy’, Harvard Business Review, 2008). And in a recent research done by the University of Wageningen in The Netherlands, it was proven that a product that says it’s been co-created on it’s outside packaging, is sold better than products that don’t say they’re co-created by consumers. Consumers have, in other words, more faith in the judgments of other consumers than in the judgments of companies.
From co-creation to collaboration in three steps
Structural collaboration with customers: it’s not a matter of technology. It’s the mentality shift that is needed within a company that is really important: allowing the consumer to have a real voice and a real say within the walls of a company. One of the goals is to add a real “consumer feeling” to your companies’ decision processes, and not just relying on your gut feeling(s).
If a company tries to take the step towards structural collaboration in one time, it might get to deal with a lot of barriers: change is going to fast for everyone in the company to keep up with. Our research found, that every company we interviewed started the structural collaboration on a small scale. Step by step, they’ve developed themselves and they learned, day in day out.
The three steps:
1. A try-out: Collaboration starts with a first “sensing” project. You have to check and investigate in what way(s) and to what extend consumers can be involved in your company’s decision processes. For a lot of companies, this is a test to get to know the added value a consumer can possibly have.
2. When the try-out is a success, project based collaboration is next. In this phase, the customer is involved in new and strategic projects. More and more a customer centric attitude is developing within the company: the involvement of customers gets internalized.
3. Structural collaboration is the final step. In this phase, the voice of the consumer is fully integrated in every decision a company is taking.
5 pillars for structural collaboration success
Based on the findings of our research, we’ve defined 5 pillars for successful collaboration with your customers.
1.Company fit & culture
On of the most frequently heard arguments NOT to start with collaboration, is the existing company culture. Managers are troubled by this, so the only way to get started with co-creation is to choose a try-out that fits with the existing company culture. Don’t change the company culture at first, but adapt it, is our advice. If you have a very cost-centric company culture, find a co-creation try out that will increase your efficiency.
If you are in a company in which new ideas always come from one genius brain, leave it that way, but involve your customers in the marketing campaign that is introducing one of the genius’ ideas. We think that there are plenty possibilities to involve your consumers in a way that is in lign with existing company culture, always. By choosing a try-out, you will be in action much sooner and results will be accepted much earlier and faster. In the future, culture will change with the increasing involvement of consumers in your companies’ decision processes.
2. Choose the right people
Not every customer can be of added value in a collaboration process. Choose people that have an intrinsic motivation to help. They have to be very dedicated to your company. But next to this dedication, relevant knowledge is also very important. It’s far more useful to work with people with sector-specific knowledge and experience, than with people that don’t know anything about your companies’ industry. It’s better to work with people who have experience with your products, who also spent money on your product. These people can be seen as employers who are not on the payroll…
3 The active involvement of C-Level people
It’s not sufficient that C-Level is only supporting collaboration projects. Support is too much without obligation…. You will need the active involvement of your organization’s management. Your goal with structural collaboration is, to let customers participate in your companies’ decision processes. When your companies’ C-Level is not actively involved and is not following what customers are saying about your company, chances are that they carry on taking decisions without taking account the voice of the consumer. At that moment, the collaboration process is killed: it has become just a fancy pr-tool for some parts of the company.
4. Break the boundaries between internal and external communication
A collaboration platform is in most cases an internal company project. Most companies don’t want to allow competition to join the party. But when collaboration sticks behind company walls, you will never reach maximum impact. There are two advantages in the external sharing of your collaboration efforts: the first is that it will increase credibility for your products and services. It will allow participating consumers to develop themselves towards external brand ambassadors: we see this as an activation effect. The second advantage is the image of the marketer. When a marketer can tell his colleagues, friend and competitors that the consumer is part of his decision process, he will be seen as an innovator by many: they all have seen the power of the consumer using social media in their daily lives….
5. Measure impact
Furthermore, it’s very important to measure the impact of the structural collaboration efforts. This will make future investments in this kind of projects far more easier. Here are some KPI’s to take into account:
- Success of innovation and feedback on services: By involving consumers you will decrease the amount of product launches that fail.
- Cost reductions: When the amount of failed product launches drops, costs will be reduced. And: you will also reduce costs for traditional market research. Small, more ad hoc market research projects can be stopped: the voice of the consumer is now everywhere in your company!
- Consumer-feeling: Measure the increase of consumer feeling among your employees and marketers. The more they listen to consumers, the better their consumer feeling will develop and the more the gap between company and consumer is closed.
- Brand perception: The overall brand perception of your company can change. When the market knows that consumers are actively involved in the way your company is developing, the perception of your company might change. Consumers will see your company more as a client-centric company, this will lead towards positive conversations about your brand on social media and it means a boost for your companies’ image.
Changing mentality and company processes
The research we did found, that the evolution towards structural collaboration is a very impactful one for a company. Companies that are taking steps towards structural collaboration, are very positive about this process But they all conclude: it starts with a mentality change, but it ends with the adaptation of your companies’ processes. When you truly want to structurally integrate your customer’s feedback into your company, you HAVE to adapt your processes to this new context. When you don’t adapt your companies’ processes, your co-creation and collaboration efforts will stay occasional campaigns: they never become structural.
We hope this article is giving you a good view on the main conclusions of this study. All details can be found and downloaded in the SlideShare paper you can find below: