What if your product development team was hundreds strong? The promise of customer co-creation

Some product categories are so wide-ranging that it can be tough for brands to choose a direction for the next product launch. It’s even tougher when everybody wants something a little different.

Take LEGO, for example. A new LEGO set could be basically anything. Out of the infinite options, how do they choose what designs to make?

You’d probably guess that they’re getting their fan base involved, and you’d be right. LEGO crowdsources new set ideas through its LEGO Ideas platform and lets customers vote on their favorites. Winning creators get 1% of the total sales of the set they helped design.

Today, many companies in the CPG, fashion, and other industries are starting to let regular people in on the product development fun. Some are even developing a tight partnership with customers—a strategy known as customer co-creation.

What is co-creation in product development?

Customer co-creation is a subset of what’s known as “open innovation,” a strategy that involves getting outside participants to help spark new ideas. In co-creation, a company will open up its product development process to input from outside stakeholders—its customers or clients.

This is in contrast to traditional product development, where only internal stakeholders are authorized to give feedback on ideas and designs. Essentially, you’re looking at the market as a collaborative space, rather than seeing your brand as a closed-off entity that hands down new products to the masses every so often.

Co-creators are typically highly invested customers, often the types who might be voicing their opinions and wishes frequently on a forum linked to a brand. If you’re a brand thinking of getting some out-of-the-box input from people who really care, consider engaging a group of people with a proven passion for your company’s products and an ability to come up with unique, nuanced ideas.

How does brand co-creation differ from crowdsourcing? The main differentiating factor is the extent of collaboration. In crowdsourcing, a large number of individuals from outside your company each present one-off ideas for you to consider at one point in your process. In co-creation, a smaller group of highly motivated people works closely with you throughout an iterative process of product brainstorming, concept creation, and design.

Benefits of customer co-creation

Perhaps your company is finding that food for thought is getting stale, and fresh ideas are becoming few and far between. Maybe you’ve had a new product drastically underperform when you’d thought it would be a big hit. These are a few reasons people turn to co-creation, but they’re not the only benefits you can reap.

• You’ll get marketable ideas that are truly based on people's needs. Even better, these ideas will require less reworking, since they’ve been already vetted by the people most likely to buy them. Essentially, co-creation doubles as market research, where you get to explore various market research questions while collaborating with internal and external stakeholders on your next product launch.
• You’ll suss out problems before you sell your product far and wide. Product development teams can be so close to their own product that they can’t really step back and see how they might come across to someone who’s less familiar with it. Co-creation can help you get wind of issues that could hamper customer perception.
• You’ll build community and deepen loyalty. People love being included. The customers who contribute most to co-creation will feel special, and they’ll become more loyal to your brand. The buzz around your co-creation opportunities will also create more awareness about your products, so you’ll have a leg up on your marketing.

How does customer co-creation work?

Choosing to implement a co-creation strategy requires you to determine which point (or points) in the product development workflow you could use the most outside input in. Once you know where you’re in need of insights, you can figure out which co-creation models will work best.

There are two main categories: agile co-creation and correction co-creation. If you’re interested in being proactive and incorporating idea-rich customer feedback throughout your entire process, that’s the agile version (“agile” being a project management word describing a flexible, adaptable, and iterative teamwork strategy). On the other hand, if you’ve noticed that your recently launched product is underperforming or getting bad reviews, you may opt for correction co-creation.

Here are a few co-creation models to consider.

• Crowdsourcing. This is the lowest-commitment form of co-creation, but it can be super helpful. Ideas pouring in from a wide variety of sources will give you rich material to innovate with.
• Customer advisory boards (CABs). Your most invested customers could serve as a group of advisors who can either give you focused recommendations toward a specific issue or more generalized feedback on a continuous basis.
• Co-design. Your product designers can invite customers to work alongside them as equal partners in the design process. With an emphasis on shared decision-making, this methodology helps promote maximum alignment between internal and external stakeholders.

Potential pitfalls of co-creation

You’re letting regular people peek behind the curtain in co-creation, meaning that the traditional barriers between brand and consumer are getting fuzzy. It might feel disorienting.  

Without good communication and concrete expectations, co-creation could theoretically get messy. Here are a few concerns that companies often have about the process:

• Too many stakeholders could lead to decision fatigue. There’s always the possibility of it becoming a “too many cooks in the kitchen” sort of scenario, particularly when you get a lot of highly contrasting opinions and ideas. Getting the right people involved can help—you want to make sure that anyone participating in co-creation is truly passionate about your business.
• Lack of transparency can prompt confusion and perhaps even hurt feelings. You need to communicate well to all stakeholders and make sure they know what to expect. If people get inflated expectations regarding compensation for their input, it can be hard to walk this down.
• You might have some concerns about intellectual property. If your co-creators are definitely going to be accessing your company’s version of the secret Coca-Cola recipe, and that worries you, then you’ll probably want to limit the extent of your open innovation.
• It might be challenging to keep customers engaged. How do you motivate people to keep submitting their ideas and feedback? If you’re running your crowdsourcing like a competition, you probably won’t have any issues. But some co-creation models need a bit more effort to update people regularly on how you’re using (and appreciating) their ideas and input.

Strategies for making customer co-creation successful

There are ways to mitigate the challenges of co-creation and gain some peace of mind about opening up your product development process to innovation from the outside. Here are a few things you can do:

1. Be very clear about what you’re trying to accomplish or solve. You can dramatically reduce the complexity of the process by directing people’s efforts where they’re really needed.

• Be extra clear about the rules and the compensation (if there is any). Don’t leave any doubt about how you plan to arrive at your final product decisions or compensate people for their work.
• Really put yourself in your customers’ shoes. As you get feedback from external stakeholders, don’t settle for simply knowing what they want. Ask them deeper questions to get a sense of why they want those things.  
• Figure out how to measure the results of co-creation. Did you get more quality ideas than you would have otherwise? How has the co-creation changed your organizational processes and culture for the better? If you can measure these things, you can make a case for continuing along that road.

How IHUT can help you ace your first co-creation experience

There’s an easy way to start opening up your brand to ideas from consumers, and that’s in-home usage testing (IHUT). By having people from a variety of demographics interact with your products in the comfort of their own homes, you can crowdsource ideas and even get detailed insights into what customers might like to see from you in the future.

Most brands think they need sample sizes in the thousands for effective crowdsourcing, but Highlight's highly screened community of engaged consumers delivers more reliable data with smaller, targeted groups. This means that you’ll get better customer insights analysis on a faster timetable without the noise that comes from casting a wide net.

You’ll also have a bunch of people who might be excited to see your product show up on regular grocery shelves!