How to Win Customers for Innovation and Co-Creation

Any company that offers products and services directly to the end-user will set up an appealing customer journey to build lasting relations and attract new target groups.

Ever since big players like Amazon or 3M put customer-centricity at the core of their business strategies, people’s expectations towards interacting with a company have significantly changed, establishing a new standard across all industries.

That is even more, the case with technological and digital advancements like social media and mobile apps, which have made it easier than ever to communicate directly and personally with many customers. But with the promise of such immediacy, entirely new challenges arise.

Simply asking customers for their opinions and ideas via Facebook or Twitter does not make for an efficient, controllable addition to a company’s innovation or product development processes.

What is needed is an approach to customer engagement specifically shaped to utilize the sweet spot between manageable structures and creative collaboration.

The best way is to set up a dedicated infrastructure for hosting and conducting a broad range of innovation and co-creation projects. In digital times such an initiative comes along with handling huge amounts of data and customer interaction.

Therefore, companies should look for a solution that can consolidate all this information to a manageable outcome that can be used for innovation initiatives right away.

Ultimately, this leads to implementing a process whose most important purpose is to bridge customer relations with relevant contact points inside a company’s organization.

Setting up such a framework is one thing. Filling it with life and motivating target groups to actively participate in the other. This article will offer some guidance on …

… why customer innovation is relevant for running a successful business

… what needs to be considered when collaborating with end-users

… how a customer project should be designed to deliver valuable results


Why Companies Should Interact with Their Customers

Of course, some obvious reasons are rooted deeply in the customer journey. Talking to the customer always supports building sustainable relations through establishing trust and familiarity. When done right, this eventually leads to a company image, which is perceived as very customer-friendly by the public, attracting more and more people.

But many benefits go far beyond marketing and branding activities. Accepting the end-user as a valuable source for insights and ideas opens the door for developing better products, services, and business models.

Identifying needs, trends and requirements early on, not only gives companies the advantage of understanding the customer’s perspective resulting in perfectly tailored solutions, but it also helps to minimize the risks of failing in the market with wasting time, money and resources.

While interacting with end-users, companies can validate their assumptions and generate a resilient market survey. They can gather ideas for new business, get instant feedback on pressing topics and existing offerings, or even test and optimize prototypes with future users.


How to Foster the Motivation to Participate

Co-Creation means letting the customer in on the ground floor of innovation and developing new products or services. Customers become partners and advisors, not just end-users – companies must treat them accordingly.

So, the first order of business is to take the customer seriously. Customers are now included in areas where they haven’t been invited in the past. Companies need to make sure that their employees understand this challenge and the added value that customers bring to the table.

There is nothing more demotivating for the users than having the feeling their voices are not being heard after they made the effort to sign up for a co-creation project and expressed their opinions or ideas.

Everyone involved must keep an open mind, especially when the needs and wishes of the user community contradict the company’s course of action. It’s also important that the community gets some guidance on how they can participate along every step of the process, what the exact goal is and what happens with their input.

This already helps manage expectations on the user side and creates a positive vibe within the community. In addition, decisions should be made transparent and based on user feedback.

Companies should always remember that the aim is to establish a sustainable and active community for customer innovation. It’s there to turn otherwise unfiltered, unstructured, and often negative input into actionable and positive suggestions. Everything else has to be subordinate to this goal.

As said earlier, integrating customers in innovation activities comes with the challenge of setting up a matching infrastructure that enables large-scale collaboration and transforms the big amounts of input into manageable results for further processing within the organization.

Although the customers will likely never know about this internal challenge, they will notice if their suggestions and ideas never lead to any tangible outcome.

So, it’s very important that the infrastructure covers all relevant areas and spins the right connections – and ultimately really creates user-centered offerings that make it to the market.

The infrastructure must create an interactive and intuitive environment on the front-end side. It should be as easy as possible for the user to create a profile, give input, and communicate with other customers or the company.

Even better, if the solution also offers additional information about ongoing and past projects, provides technical context for projects, or makes existing data and considerations visible – which is often a good starting point for a lively and fertile discussion.

Customer co-creation projects usually don’t demand a big investment in price money. The motivation of customers to participate in such innovation projects is often intrinsically anchored, which means that they are interested in creating better products, services, or business models themselves.

These users also express a special relationship with the company, which reinforces their role as lead users, making them even more valuable to the company. They act as a catalyst for attracting other individuals to innovation projects.

Nevertheless, small incentives and bounties are never a bad idea to award particularly committed community members and strengthen their relationship with the brand even further. Companies should use these lighthouse incidents to create more awareness for the initiative by making the successes and contributions of the users known via their communication channels.


How to Shape and Structure Customer Innovation Projects

A customer innovation initiative can quickly backfire without the right framework and methods. One way to avoid this is to use certain elements from the design thinking approach, which lay the foundation for truly user-centric innovation. The focus is on identifying and understanding user needs before pursuing further iterative development steps.

First, the goal must be broken down into several consecutive steps. Asking the customers to pitch elaborate, production-ready proposals will not deliver any usable results.

And even if it does, the responses will very likely go in different directions, leaving the challenge of picking the “right” one to pursue. Breaking a project down into multiple consecutive phases introduces the necessary structure.

Gaining this understanding initially allows one to address more specific questions in the subsequent phases. With each step building upon the preceding one, the process ensures that the outcome addresses the important points raised by the customers during the earlier steps.

Like the widely used innovation funnel or stage-gate process, a collaboration project with customers can follow the logic of alternating between objectives and quality checks.

While early phases can broadly address a topic to gather as much input as possible, phases further down the path will have to be formulated to solve a specific objective. The further a project progresses, the narrower the scope of the individual phases should be to ensure an actionable outcome.

As for the quality gates, the transition from one phase to the next allows for full control of the subsequent trajectory of the project by filtering out undesirable elements from the discussion and bringing the relevant ones to the foreground through expert evaluations or other mechanisms.

The point of funneling large-scale collaboration towards relevant results ties into an important success factor: the interplay of exploration and consolidation.

When engaging with such a broad audience, all the contributions and discussions will inevitably be narrowed down to a manageable size.

As part of each stage, some form of consolidation is the best way to advance the relevant ideas and information along the funnel. Once the subsequent stage requires additional input and explorative freedom, the field opens up again for free collaboration.

Consolidating or extracting the information is not a simple task of merely picking what works best for the company or putting everything up for a jury vote. Even fully transparent, democratic voting by the customers reaches its limits when there are too many available options.

Within an appropriate digital environment, large discussions or collaborative ideation can generate valuable data beyond the content. Data which can be used to identify what (or who) is really worth looking into more closely.

How many users interact with an idea? How much time on average do users spend reading or commenting on a suggestion? Are users with a specific profile or expert status flocking around certain contributions? Is an idea able to maintain an active discussion over a longer period?

Data points like these can consolidate large-scale collaboration to more manageable sizes, not just as part of a subsequent step but throughout the entire discussion itself.

With existing technologies and algorithms, the possibilities for such data-assisted consolidation are extensive. The things that will be possible with further advancements in artificial intelligence and machine learning are nearly unimaginable.


Further Readings

For more information on realizing customer innovation projects with specialized software solutions, look up our innosabi Community offerings or learn more about how other innosabi customers collaborate with their target groups.

If you are looking for insights into why now might be the time to invest in innovation management software and how to prepare your organization for digital tools, follow our blog.