Brands in fast-moving industries are experiencing a shortfall between what they want to achieve through co-creation and the research industry’s ability to keep pace with those needs, according to Samsung’s European insight director Richard Bates.
Customer-centric approaches to research and development are not new. But as more brands look for cost-effective and real-time insight in order to create products, services and marketing messages for demanding consumers, co-creation methods are becoming a valuable source of knowledge.
The method involves assembling communities of willing customers, stakeholders or members of the public to perform tasks and contribute ideas aimed at creating and refining brand offerings. Often these communities are managed by agencies on their brand clients’ behalf.
However, Bates argues the opportunities are not being provided for marketers at the level they want (see Marketing Week’s Q&A with Samsung’s Richard Bates here). “The main point is that agencies and the industry don’t have the breadth of skills to deliver on what clients want to do with their communities,” he says. “I think the focus has been on the platform [rather] than meeting the client’s needs. It has been fitting the client into the [existing] platform rather than tweaking the platform to the client.”
Instead, as Marketing Week has discovered, the approach marketers are looking for would allow them to invite participants directly and instantaneously to become part of their brand, and to combine this facility with other real-time feedback methods such as social listening. It would also have the flexibility to scale up quickly and offer both short-term and long-term insights as brands require.
So what successes have brands had with co-creation to date, and what needs to happen in order to exploit these methods further?
Catch up with consumer behaviour
At a recent co-creation event organised by agency Promise Communispace, brands spoke exclusively to Marketing Week, expressing concerns over the research industry’s ability to meet marketers’ demands.
Christian Walsh, digital director at the Market Research Society (MRS) says: “It was voiced [at the event] that the research sector was playing catch-up and that is a fair comment. Like all industries there is an element of moving from a supplier mentality to a business consultant or partner approach. In-house [brand] teams are getting smaller and they need to be able to rely on agencies.”
Giles Finnemore, chair at Aura, the association for clients of research agencies, argues that the biggest challenges for many brands lie in the development process and keeping up with consumer behaviour – aspects that communities would be well placed to assist with if a sufficient breadth of service were available.
Finnemore, who is also marketing and insight consultant at the British Video Association, says that “to put something into research and say it will be back in six weeks just doesn’t wash in fast-paced, technology-led industries.”
As examples only increase of brands using co-creation, the shortcomings are an issue the research industry urgently needs to address. Brands such as Lego and Adidas are among recent high-profile converts to co-creation, for example.
Lego’s strategy to involve fan-generated content in its marketing was evident in a recent campaign that saw a series of documentary-style videos launch on Facebook showcasing the reactions of children in their own homes when they are challenged to “build something that doesn’t exist” – or as Lego calls it, a ’Kronkiwongi’.
In March, Adidas outlined a commitment to what it calls ‘open source’. This is essentially co-creation with customers, athletes and other partners, which builds on designs, products and services created in collaboration with people and brands such as Stella McCartney, Kanye West and Google in recent years.
At the time, head of global brands, Eric Liedtke said: “In the future, we will not only talk to but talk with our consumers. We will be the first sports company that invites athletes, consumers and partners to be part of its brands. We will open up so that they can co-create the future together with us.”
One of the techniques used to implement collaboration with consumers are online communities. At the Promise Communispace event, brands including Samsung, Orange, Tesco and Twitter came together to dissect the current state of play of these communities.
The value of online communities are clear for these brands. The speed of response from consumers, including getting real-time feedback on business issues and campaigns or products, is just one of the benefits they name, and would like to see research agencies deliver more consistently.
Balance internal and external ideas
Research and insight teams are a staple in any organisation, as understanding the needs and desires of consumers is key for brands striving for relevance in their offerings but, as with many other marketing disciplines, digital is changing the game in market research, requiring instant results.
However, there are challenges in using online communities. Brands need to find the right balance in co-creation between internal talent and the external voice of the consumer. Using this method also needs to be sold to the wider business through proving a return on investment in co-creation.
“Technology is a fast moving business,” says Bates. “Samsung is always keen to be faster than everyone else, so for us having a community that is on 24/7 is perfect for that.”
He adds: “Innovation is a combination of listening to consumers and the technical, scientific and engineering [aspects of development]. It’s a different balance in FMCG and other sectors, but in technology the advancements are about the technology itself and exploring how you can turn that to the best advantage, rather than just designing something in response to what consumers say.”
Orange also believes in a combination approach and that innovation must certainly come from from internal sources, but head of segmentation and insights Richard Clarkson admits that when development teams work alone, “in some cases they could be thinking only about what they need and that might not be what the customer needs”.
Orange recently used its online community to understand roaming offers, which led to including roaming minutes in some countries in its core tariffs. He adds: “If you don’t engage with the customer, there’s no reality check as to whether your idea is good or not. There are many famous examples of people coming up with ideas without engaging customers but equally there are bad ideas.”
Demand a flexible offering
Clarkson believes that communities should also be capable of being combined with other methods of co-creation and customer insight, such as social listening.
The brand used social listening to gauge feedback and attitudes to 4G mobile internet services, which Clarkson says was an expensive project Orange carried out as an experiment. If agencies could provide a more cost-effective way to combine communities with social listening at scale, it would almost certainly appeal to brands.
Clarkson argues that the good thing about communities is that “you can be specific about what you want to ask and show them your idea”, while with social media, ideas come from listening to consumers’ problems. “They can work in tandem,” he says. “Use social listening to hear the problems, come up with an idea and feed it back to communities.”
For financial services brand Legal & General, online communities serve quick, tactical business needs, where the brand might need an answer to a quick question, but also provides long-term learning.
“A community works as a continuous insight system and it’s not necessarily a structured format of research – it can be both structured and unstructured,” says Arun Mylavarapu, Legal and General customer insight manager. However, customer-led innovation through communities is key for the brand.
He adds: “Customers tend to identify a need that is not served by the existing set of products and services. [For example, because of changes in pension laws] last year we understood that there was going to be a need in the market for a product that wasn’t an annuity but that gave customers an income, so we used feedback to deliver a new product in pensions.”
Prove the ROI internally
It is not only a lack of agency offerings that can hold brands back from achieving co-creation ambitions. Internal cost barriers are also present.
“It’s a big challenge when you start off,” says Clarkson at Orange. The key, he explains, was to show within the organisation that digital research was the right approach to reach the right demographics, given the way they use technology.
Clarkson says demonstrating other benefits such as speed of response and the range of options for accessing the service helped to show the return on investment.
“It’s not a focus group where you speak to people once. You could speak to them over several days or go back over several weeks or months. You are getting a considered answer rather than two hours on a Thursday night,” he explains.
Having online records of conversations from a community,and figures showing the cost-effectiveness, are also other selling points for Orange. They are also plus points for Aura’s Finnemore.
He says: “The benefit of communities, as opposed to doing quantitative research, is that the stakeholders outside of the insight team can observe what is going on over a longer period of time rather than viewing one focus group out of [for example] 25, and the end result not matching their experience of that one group they viewed.”
The wider the access that brand teams get, therefore, the higher co-creation’s return on investment. Finnemore also believes that it can aid the new product development process, as feedback can be turned around much quicker than with other research methods.
Samsung’s online community, which it calls Smart Lab, has been running for almost two years and in 2014 the brand calculates it spent 13,000 hours engaging with consumers via the lab. The brand also claims that two-thirds of the conversations in the community were customer generated, rather than being discussions that marketers brought to the table.
Samsung’s biggest problem with communities is that it needs more of them. Bates says the brand has demonstrated the value of the community approach to the wider business and therefore “everyone wants to use it”.
Evaluate existing methods
To some extent, Walsh at MRS claims, “any type of research these days is focused on an ethos of co-creation” and that “it runs through all methodologies to a degree”.
With that in mind those brands that focus on market research may already be investing in a kind of co-creation, and could harness data they are already collecting to achieve more relevant customer-centric propositions.
The MRS recently launched a beta version of an insight tool that evaluates existing insight methods used by brands and can be used to plan, looking at where a brand currently stands with using insight and what it needs to focus on.
However, as Clarkson at Orange warns, the deep level of participation required for co-creation means specifically designed community methods cannot be replaced easily.
“Maintaining engagement is key for communities,” he says. “Access through mobile and tablets helps [and brands could] make communities interactive by adding video.”
But as more communities come into existence there will be a challenge to keep participants engaged as many research subjects are likely to become members of more than one.
The current challenge in co-creation, therefore, is two-fold – the research industry needs to address the pace of change in what brands can and should expect to achieve through online communities, while brands need to ensure participants’ ideas are not exhausted.