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How Co-creation Differentiates Customer Experience

Paul Hagen wrote an article on the Forrester Research blog on Customer Experience and the challenges coming with it:

Here are some numbers: 86% of companies say customer experience is a top strategic priority for 2011; 76% seek to differentiate based on customer experience; 46% have a companywide program for improving customer experience currently in place and another 30% are actively considering it; and 52% have a voice of the customer program in place with close to 30% more actively considering it.

With the majority of companies focused on improving customer experience, how can a company expect to differentiate on it?

Michael Porter famously wrote that companies differentiate themselves by performing a unique set of activities from their competitors’ or by performing the same activities differently. There are few activities that set new standards in customer experience, most companies will have to create rich experiences through the same set of activities.

Below a representation of the Customer Experience Cycle:

Positioning is the part of the marketing process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organisation compared/in relation to competitors. Combining the phases of the Customer Experience Cycle with positioning and seeing it through the co-creation lense creates these unique approaches of the same set of activities shared by many organisations.

When organisations are targeting the same target groups there’s still room for differentiation, because Core Competences are different for each organisation, offering different ways to market. Secondly, each brand/organisation is perceived differently in the mind of the customer, this isn’t always the perception which marketeers had in mind, but it returns competitive intelligence and means to enhance customer understanding.

Co-creation offers ways to differentiate throughout the complete production phase, as Philips has shown:

Sense-checking with consumers along side the process, continuously adjust products (or services) based on their perceived value and need to solve a problem. After having engaged them in the production process, the same set of people can serve as highly loyal ambassadors. In a co-launch this means an increased effectiveness and more importantly a uniquely shaped perception/approach of the brand and product based on the positioning-perception dynamic.

C2B2C

“Customer understanding” is at the heart of the Customer Experience Cycle as shown above, by really listening to customers, the complete consumer pool, competitors and other players in the market, organisations have the opportunity to understand what’s needed. Not only is the inner of the Cycle measurable and analyzable, all phases of the cycle can be better understood from a customer point of view and not only from an internal operations point of perspective…. Just by listening. It can lead to actions to enhance processes, if not it has been a good and free sense-check with the customer.

C2B2C or outside-in is a fundamental mind shift that challenges even the best of organisations. Differentiate by performing the customer experience activities differently could be as organic as an organisation would want to, depending on the ratio of passive- and active co-creation.