Get ready for a co-creative economy

Value co-creation as a customer engagement strategy

In an increasingly dynamic marketplace – characterised by demanding customers, increased competition, and economic downturns – companies are starting to engage their customers in innovating their services and creating value. Katrien Verleye has written a doctoral dissertation that provides insight into the conditions under which firms and their stakeholders can benefit from value co-creation. In addition to reporting 3 empirical studies that address different aspects of value co-creation, Dr Verleye provides a unifying value co-creation framework and presents the implications of this framework for business practitioners who are interested in value co-creation as a customer engagement strategy.

In value co-creation, a company engages its customers in the creation of value through shared inventiveness, design, and other discretionary behaviours. For example, a company can encourage customers to share new ideas via online platforms (consider www.MyStarbucksIdea.com); or it can encourage customers to design their own solutions (such as www.ShoesOfPrey.com, where customers design their own shoes).

These behaviours – through which customers aim to benefit the firm – are also called customer engagement behaviours (CEBs).

Practical implications of the value co-creation framework

  • First of all, the value co-creation framework shows that customers who do not directly consume a firm’s products or services, but who are embedded in the broader network of customers and/or other stakeholders, can also engage in CEBs. Therefore, business practitioners might well benefit from taking the broader network of customers and/or other stakeholders into consideration.

    The framework helps business practitioners evaluate the degree to which customers are engaged in the creation of value and to identify new opportunities to engage customers in value-creating CEBs.

  • The framework helps practitioners manage CEBs by showing the importance of three managerial processes: (1) customer encouragement, (2) customer socialisation, and (3) customer support.

    The framework offers suggestions about how to incorporate these managerial processes into the design of service interfaces that can allow for customer encouragement, customer socialisation, and customer support in value co-creation situations – thus providing suggestions for innovating service interfaces for value co-creation.

  • The framework also holds that the best way to encourage, socialise, and support customers depends on situational characteristics (e.g. the level of emotionality in value co-creation situations, or the degree to which value co-creation involves a broader network of customers and/or stakeholders) and customer characteristics (e.g. the expected benefits in value co-creation situations).

    Therefore, the framework suggests that, to design compelling service interfaces for value co-creation, business practitioners need to have a good understanding of the characteristics of the value co-creation situation and of the customers who engage in the creation of value. The framework suggests that business practitioners might benefit from having multiple service interfaces to engage different customers in the creation of value.

  • To benefit from opting for a value co-creation strategy, business practitioners should also evaluate whether service interfaces account for customer heterogeneity in a cost-effective way. In other words, practitioners need to assess whether service interfaces that account for customer heterogeneity also generate productivity and efficiency gains for the firm.

In sum, the value co-creation framework helps business practitioners gain more insight into the implications of opting for value co-creation as a customer engagement strategy. Specifically, the framework provides insight into the potential benefits and costs of engaging customers in the creation of value.

Source: “Ready for a Co-Creative Economy? Implications of Customer Engagement in Value Creation for High-Contact and Technology-Based Service Interfaces” by Katrien Verleye. Dissertation for the degree of Doctor in Applied Economics. Advisor: Prof Paul Gemmel. Co-advisor: Prof Deva Rangarajan.

About the author

Katrien Verleye obtained her Master’s in Educational Sciences degree at Ghent University in 2007. She then started working at Vlerick Business School as a researcher for the Healthcare Management team, after which she joined the Department of Management, Innovation & Entrepreneurship at Ghent University. In 2009, she was granted a 3-year I.C.M. doctoral fellowship, which included one year at the University of North Carolina at Chapel Hill (USA).

As a member of the Center for Service Intelligence at Ghent University, Katrien’s research interests include service management, service innovation, and value co-creation. Her research has been published in the Journal of Applied Management and Entrepreneurship (2010), the Journal of Management & Marketing in Healthcare (2011), and the Journal of Service Research (forthcoming).

In addition, Katrien is co-author of the textbook Service Management voor Zorgorganisaties (2010) and she has written chapters for two international textbooks: Service Management: An Integrated Approach (2013) and Customer experience management: enhancing experience and value through service management (forthcoming). 

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