How to Put Your Customers to Work

How to Put Your Customers to Work

The pacemaker story illustrates the new value creation space: A competitive space cantered on personalized co-creation experiences developed through purposeful interactions between the consumer and a network of companies and consumer communities.

Value does not stem from the physical product (the pacemaker), or from the communications and IT network that supports the system, and not even from the social and skill network that includes doctors, hospitals, the family and the broader consumer community. Value lies in the co-creation experience of a specific patient, at a specific point in time, in a specific location, in the context of a specific event.

The co-creation experience cannot occur without a network of firms collaborating to create the environment that allows the patient to undergo that unique co-creation experience. The network, not owned by any single firm, multiplies the value of the pacemaker to the patient, his family and his doctors. The patient, by co-creating with the network, is an active stakeholder in defining the interaction and the context of the event. The total co-creation experience with the network results in value that is more personal and unique for each individual.

To see and take advantage of these opportunities, we must suspend the traditional distinction between B2B and B2C customers. In the world of co-creation, we have to imagine every individual who interacts with the company as a "consumer", whether that individual is a forklift operator, a pilot, a design engineer, a beautician, a clinical researcher, an instructor, a contractor, a paralegal or a civic worker. This perspective forces us to discard the artificial distinctions among enterprises and households. Furthermore, historically we have started with "B" - our business - and not the individual consumer. This company-centric view of value creation is deep-rooted, as it has been the very foundation of competition in the industrial era.

The New Frame of Reference

If the consumer and the firm co-create value, then the co-creation experience becomes the very basis of value. This suggests new capabilities for firms. Managers must attend to the quality of co-creation experiences, not just to the quality of the firm's products and processes. Quality depends on the infrastructure for interaction between companies and consumers, oriented around the capacity to create a variety of experiences. The firm must efficiently innovate "experience environments" that enable a diversity of co-creation experiences. It must build a flexible "experience network" that allows individuals to co-construct and personalize their experiences. Eventually, the roles of the company and the consumer converge toward a unique co-creation experience, or an "experience of one".

Notice what co-creation is not. It is neither the transfer nor outsourcing of activities to customers, nor a marginal customization of products and services. Nor is it a scripting or staging of customer events around the firm's various offerings. That kind of company-customer interaction no longer satisfies most consumers today.

The change that we are describing is far more fundamental. It involves the co-creation of value through personalized interactions that are meaningful and sensitive to a specific consumer. The co-creation experience (not the offering) is the basis of unique value for each individual. The market begins to resemble a forum organized around individuals and their co-creation experiences rather than around passive pockets of demand for the firm's offerings.

Recognizing that the traditional system is becoming obsolete, many firms are already testing new business assumptions, preparing to compete on the basis of those personalized co-creation experiences that result in value truly unique to each individual.

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