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18.01.2018BULBSHAREThe power of co-creationBulbshare-1

BULBSHAREExecutive summary of the keyfindings from our reportCo-creation: When brands and organisations develop products,services and campaigns in collaboration with their audiences.Our white paper on the burgeoning trend of co-creation has revealed a major disparitybetween brand perception of how good their customer connection is, and how theircustomers or audiences actually feel.In our survey - carried out with over 300 representatives from within brands andorganisations and 500 members of the public - we discovered that while brandsoverwhelmingly feel they are very good at connecting to and understanding the needs oftheir audiences, those audiences actually feel comparatively disconnected to the brands theyuse.Furthermore, our survey found that people consider brands that collaborate with theiraudiences - involving them in decision-making, asking their opinions and co-creatingcontent and campaigns alongside them - to be more authentic, more transparent and moretrustworthy.Many brands are already using co-creation to connect with their customers, democratisehow they make decisions and create products and services that better reflect the wants andneeds of their audiences - and we have included case studies of those that are pioneeringthese practices in a variety of different markets.While the brands and organisations we spoke to largely acknowledge that audiencecollaboration is key to improving business performance, they cited lack of budget, lack oftechnology and lack of capability as barriers to being more collaborative.Bulbshare has defined its own model and toolkit for implementing co-creation into businesspractice in order to better connect to audiences, with four key stages: understand, ideate,create, advocate. Our report highlights how putting agile, innovative and cost-effectivetechnology at the heart of this problem - driving deeper, more meaningful interactions withcustomers, engaging them in constant conversations and creative partnerships with yourbrand or organisation - is the key to unlocking the challenge of better audience connection.For a demo of the Bulbshare technology - showcasing how we’ve used our co-creationmodel to improve business performance for a multitude of major international brands andorganisations - contact Michael Wylie-Harris on [email protected]

BULBSHAREContentsCo-creation: The future for brands.5Our exclusive report on the burgeoning trend of co-creation and what it means for brands.The statistics.10The results of our co-creation survey, carried out with both brands and their audiences.What the experts say.13Thought-leaders and industry insiders share their thoughts on the co-creation movement.Co-creation in practice.18The brands and organisations pioneering co-creation to improve business performance.Our co-creation model.22Bulbshare’s unique model for implementing co-creation into your business operations.Our co-creation toolkit.24A practical step-by-step guide on how to use co-creation to better connect to your audience.Appendix.26-3

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BULBSHARECo-creation: The future for brands“The co-creation process gives voices to real people,empowering them to create richer brand experiences anddevelop products and services that better resonate withthemselves and their peers.”Co-creation is the future for brands. As audiences increasingly seek two-way conversations, collaboration andthe opportunity to create their own content, brands must adapt to survive. The smart ones are those that areprepared to shift the balance of power: democratise, give audiences a say, realise they need to put consumersat the heart of their brand. The brands that will own the future, are those that co-create.In an age when audiences are increasingly cynical towards brands, trust, authenticity and transparency are allkey. Co-creation is the most direct way of achieving this. For a more savvy, entrepreneurial generation of consumers – with the technology at their fingertips to connect to brands when and where they want to – the brandsto trust, the brands to love, the brands to recommend to friends are those that treat them not as customers, butas colleagues and collaborators.Co-creation is about leveraging the voices, ideas and opinions of real people in order to create better productsand services, as well as brands that are more in touch with their customers. Done right, it reduces the distancebetween company and consumer, drives brand loyalty and reduces the cost and risk linked to new productdevelopment.In Bulbshare’s exclusive co-creation survey, carried out with over 300 representatives from within brands andorganisations and over 500 members of the public, 81% of our respondents said that brands that collaboratewith their customers are more authentic, 86% of people said brands that co-create are more trustworthy, and79% of people felt that being involved in a brand’s online community would make them feel more involvedwith that brand.-5

BULBSHAREA new eraThis is the era of co-creation. Consumer attitudes have changed and marketing messages that seek to interruptand sell rather than interact and engage are falling on deaf ears. According to the Harvard Business Review2017, ‘trust in brands is an all time low’. There are currently 200 million users of ad-blockers worldwide,according to Business Insider, and 33% of online adds don’t generate awareness or drive any lift in purchaseintent (Nielsen 2016).Co-creation is all about that one, very simple idea:that working together is better.A direct reaction to this trend, co-creation doesn’t treat customers as mere consumers - it allows them to addvalue by putting them at the core of the business. Modern audiences are no longer passive, they are activecreators of content and insight with the ability to promote, market and advertise your brand on the most publicand affective of forums - so why not leverage that power? Co-creation is all about that one, very simple idea:that working together is better.The thought that when we collaborate, when we listen to each other, when we embody a community spirit, we’llcreate something far better than if we don’t listen, if we work in silos, if we resist the collaborative process. Itgoes beyond asymmetrical relationships where a brand sits on the one side and the user or customer on theother. It’s about acknowledging that all parties bring different expertise to the process, and that these differentforms of expertise are of equal value and fundamental to this collaboration.Many forward-thinking brands are already reaping the benefits of co-creation (see our Co-creation in practicesection on page 17), but while most companies consider themselves to be customer-focused, the vast majority are still yet to fully understand the importance of being truly collaborative. In our co-creation brand survey,69% of respondents from within brands said they considered their company to be extremely customer-centric,and 69% said they think they know what their customers really think about their brand. Yet 77% of respondentsfrom our consumer survey said they felt that brands do not listen to their feedback, opinions and ideas presenting a stark contrast between brand perception around customer connection and the reality of howconsumers really feel about their interactions and experiences with brands.-6

BULBSHAREA force for goodCo-creation turns your customers into stakeholders, marketeers and creative partners. Blurring the lines between creator and consumer and empowering people to influence the decisions their favourite brands makedoesn’t just lead to customer-centric products and services, it also has the potential to transform brands intoa force for good in the world. And as they begin to understand the power of listening to their audiences, we’llincreasingly see brands that care, brands with a conscience and brands with a level of transparency that waspreviously unheard of.Co-creation brands are outperforming their competitors with a return four times higher.The remarkable shift that Paul Polman has taken across the portfolio of Unilever brands is a case in point andone that signifies that this isn’t just a periphery fad – he’s made it central to the brand story of a corporate giant.Better still, it’s contributing to the bottom line. According to the Unilever Sustainable Living Plan (USLP) annualprogress report, about half of Unilever’s growth in 2016 came from its sustainable living brands, which grew30% faster than the rest of the company’s business.The recent Iris Participation brand index report also recognised that those companies putting ‘customer participation’ or co-creation at the core of their brand offer are not only increasing workforce retention, they’re alsooutperforming competitors with a return four times higher than that of the bottom 20 brands.Tech-enabledAs ever, technology has also been a driving force behind the growth of co-creation. The advent of big data,alongside the evolution of social media and mobile technology has enabled new levels of brand-consumerconnectivity and inspired heightened audience expectation around how brands behave. Social media openedthe door to facilitating two-way conversations and interactions between brand and consumer, but, with 65% ofpeople from our survey saying they do not feel that social media is a place where they can truly say what theythink, it no longer provides a deep enough level of insight. For those that want to go beyond social media,co-creation tech is already out there: solutions that allow brands to connect with their audiences on-the-move,gaining valuable consumer insights and feedback, creative ideas and user-generated content - just likeBulbshare. These platforms create closed communities of targeted consumer groups, then let brands share-7

BULBSHAREquestions, ideas and briefs to a specific community, getting responses from people they value and trust. Whilethis kind of activity has existed for a long time via social media, the new wave of co-creation technology marks atransformative shift in how brands can connect directly with their audiences in a private, targeted space.Despite the availability of this technology, our survey shows that many brands remain unaware of its existence.While 88% of our respondents agreed that collaborating with their customers drives revenue, 64% cited ‘lackof budget’ as a barrier, 44% cited ‘lack of capability’ and 33% said that ‘lack of technology’ prevents them fromproperly connecting to and collaborating with their customers.Generation co-creationIn recent years, the rise of a newly empowered, entrepreneurial and media savvy generation of consumers hasmeant brands have no choice but to co-create. Gen Z has its finger on the pulse when it comes to social mediabrand marketing, and with mounting pressure being placed on businesses to reinvent themselves for the SnapChat generation, brands must leverage those expertise if they’re to create meaning with a generation of which77% are more likely to buy through peer to peer recommendations (Nielsen 2016), as opposed to traditionalmarketing messages. Make no mistake, co-creation is being driven by consumers, not brands.This is a massive new consumer groupthat doesn’t like being advertised to.The role of the brand must shift to become that of a conversation facilitator, rather than a conversation leader;they must listen rather than speak and be prepared to be guided by the behaviours of their young audiences.Gen Z (sometimes called ‘Generation Me’) has grown up with the ability to broadcast its voice and opinion tothousands of followers and friends on social media, and brands must take heed of this. This is a massive newconsumer group that doesn’t like being advertised to and that won’t tolerate being told what to think. Rather,they expect to dictate - or, at the very least, take part in - the conversation.Results from our survey suggest that brands are aware of this shift and that they believe they are doingeverything they can to properly connect to this new generation: 94% of our respondents from within brandssaid that understanding their customers is ‘extremely’ or ‘very’ important to their overall business performance,75% said they believe their brand has a genuine connection with its customers, and 63% rate their organisation as ‘best in class’ or ‘really good’ at understanding customer needs in order to shape business strategy. Butdespite this, 65% of people we spoke to said they don’t feel at all connected to the brands they use, and 60%of people do not think that brands care what about their customers’ opinions.-8

BULBSHARECo-creation: The opportunityEssentially, co-creation is a brand’s gateway to creating better and more relevant products, services and campaigns. Companies that co-create display trust, authenticity, respect and openness, gain loyal brand evangelistsand are seen as democratic and progressive - while at the same time driving increased customer connection,increasing sales and reducing product development risk. Research firm Nielsen tells us that businesses with customer communities at their core display a 33% bigger growth rate than their peers, while industry news websiteBusiness Insider cites a 19% increase on customer spend when people join an organisation’s online community,and confirms that 97% of marketeers agree online customer communities improve business.Now is