Customer co-creation is the holy grail for most product businesses. Co-created products by Japanese goods brand Muji, for example, have garnered higher sales than those designed in-house.
While big corporations have the resources to build programs that can connect them to customers all over the world, it's a bigger decision for small businesses. Designing, developing and maintaining these programs requires community management and buy-in from the product team, as well as clarity about how it fits into the business. Flip-flopping with strategy can backfire – in the 2000s, T-shirt brand Threadless hosted popular weekly design challenges where illustrators could win a $2,500 payout. However, when the company fell on hard times, it switched to a royalties model, which diminished the community it had built.
Yet, as people are becoming more discerning with their discretionary purchases, exploring ways to weave customer loyalty into the product design process isn't a bad idea.
When to start
Launching a company with co-created products is a gamble – it means asking customers to trust your business before they've even seen a finished product. Yet, it's not unheard of – earlier this year, drinks brand Leisure Project minted non-fungible tokens (NFTs) that allow holders to pitch new flavors.
That said, it can also be a way to build a product line that isn't typically in a brand's wheelhouse. Swedish luxury bag company Carl Friedrik was founded in 2012, but this year it decided it would launch a line of casual bags. The team realized they needed to both clearly communicate the shift to its customer base as well as understand what people needed from this type of product. Starting this summer, Carl Friedrik is offering its Creator's Club members a 40% discount on the prototype bag in exchange for three feedback sessions and the opportunity to trade in the test bag for the final product.
The key to making co-creation work is getting the right feedback at the right stage. Will it start from the very earliest product conception or will it just be to refine extra features? Will it be done using surveys, interviews or product testing? This process can be iterative: Asphalte, a French clothing company, started out in 2016 by asking potential customers what their perfect jumper would look and feel like via Facebook – today, it chooses products and designs entire collections based on surveys that it collects from 5,000 to 6,000 respondents.
Some brands go the extra mile and actually put the creation of products into customer hands. French skincare brand Nidéco asks its customers to pitch products for their unique needs – if an idea has potential, Nidéco proposes it to its community. Once an idea gets 2,000 votes, Nidéco develops it into a beta product and the creator gets €1,500 and 10% of profits.
Where to go next
Building co-creation into a business model goes beyond the product – it's about building an engaged community. Knowing what to do with that community is a crucial part of planning. When Carl Friedrik opened up applications to its Creator's Club, the company got 1,000 applications for 75 spots.
‘We don't want those 925 people that aren't in the program to completely disappear,’ says co-founder Niklas Oppermann. ‘It's not just one or two email campaigns. It's a really long program that you have to think carefully about.‘