The Hindu Business Line : `Creating value with customers is modern challenge for cos'

WITH the wealth of information and varied means of connectivity readily available today, companies are finding it harder to deliver enough value that pleases consumers. The modern challenge is to create value "with" the customer, which is what `co-creation' is, said Prof Venkat Ramaswamy, Professor of Marketing, University of Michigan Business School. He has with C. K. Prahalad co-authored The Future of Competition: Co-Creating Unique Value with Customers.

In an interactive session at The Hindu, Prof Ramaswamy said consumers are no longer passive beings who accept what is doled out to them as a product and service. They can now investigate information to discover the true deal they are getting by linking up with not just other consumers but entire communities of consumers. This puts traditional business models in a bind.

It also comes with challenges of customising the experience for every single consumer - most CRM programmes are companies' views of consumers, which are quite different from consumers' thoughts and expectations, he said.

According to him, it's not that interaction doesn't exist but that companies fail to institutionalise it to collect feedback.

For instance, call centres are geared to closing a call within two minutes but if they only had a system for the operators to give them information about customers' queries, they would be improving customer experience, he explained. Companies can even create new points of interaction. The opportunities are tremendous in these fields of "next practices," he said.

It's not as if consumers want to have their say in designing products - they don't; it's the user experience that needs to be enriched and maximised in terms of being more participative, Prof Ramaswamy said. Many times, consumers cannot articulate and very often, that is because the manufacturing companies don't give them the means to do so.

According to him, there is no industry where co-creation won't work, whatever be its nature. There are five key tasks for companies to go about co-creation. The first involves building infrastructure for interaction between the company and the consumer. The second is to innovate in creating the experience environment.

Next is to build experience networks - act as a nodal company that can access resources of a group of firms connected to the product or service being offered. The fourth is co-creation of processes for leveraging global resources and capabilities, such as the software, manufacturing and training and education aspects. The fifth task is co-creating the experience environment so that the customer decides how she can optimise use of the product in her own way.

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