Collaboration and Co-creation: Incentives Are Important

Customer collaboration and co-creation rests on a few key assumptions; that customers are passionate about the collaboration objective(s), and are willing and able to offer their time and creativity. Notice the deliberate usage of the word “offer,” not donate or contribute. Why? Why should customers offer their time and creativity? And what do they get in return? We know how the company or organization inviting collaboration benefits. But how do the collaborators benefit; what’s in it for them?

A cardinal mistake companies make is to assume that customer passion and goodwill alone can fuel collaborative innovation programs. Customer passion notwithstanding, collaboration and co-creation is a formal business process that requires contracts and incentives if it is to function effectively.

In his very interesting book, We-Think, Charles Leadbeater reminds us that collaboration is not some outpouring of sixties-type hippie love. Collaborators need incentives and promises to part with their effort and time. Even Clay Shirky makes the same point in Here Comes Everybody when he declares that the promise of some reward or recognition is the essential piece that convinces a passive customer to become an active collaborator.

Everyone already has enough to do, every day, and no matter what you may think of those choices (“I would never watch that much TV,” “Why are they at work at ten p.m.?”) those choices are theirs to make. Any new claim on someone’s time must offer some value, but more important, it must offer some value higher than something she already does, or she won’t free up the time.

Consequently, the naïve belief that collaborators are driven by altruistic motives needs serious refinement.  Incentives are important and they do matter. Which incentives?  Trying to nominate a few, given the diversity of human motivations, is always risky business.  However, three types of incentives have been extremely instrumental in motivating customers to part with their time, energy and creativity.

  • Recognition and Self-worth:  There are very few human beings who don’t have the need to be acknowledged, heard and appreciated.  They want to feel important, not just to themselves, but to others as well.  Being recognized and experiencing a boost in self-worth is a significant reward for them.  Hallmark has provided this incentive in ample measure to its customer community members.  They have never paid a cent for participation.  Additionally, participants in Hallmark’s communities sign away rights to any and all ideas that are generated from interaction within the communities.  So, why do they collaborate so willingly with Hallmark?  In the words of one customer – “because when I walk into a Hallmark store, I feel very happy and proud; I feel a part of it; I feel I have contributed in creating some of their valuable products, and that makes me very happy, and makes me feel very worthy.”
  • Causes: Today’s customers have strong convictions, beliefs and values.  Not only that, they are willing to spend their time and resources in support of causes that are important to them.  The environment, cure for cancer, women’s rights, micro loans for the poor, and protesting against child labor are just a few examples.  Organizations, like Susan G. Komen for the Cure, are extremely successful in generating and sustaining collaboration with their members.  The reason is the cause – breast cancer.  The organization and its collaborators are unified in their passion to find a cure for cancer.  The reward is elegantly simple – everyone who collaborates feels she/he is making a difference; they are helping ease someone’s pain, and bring a little more joy and happiness to people’s lives, the lives of both sufferers and care givers.
  • Money:  It is so easy to discount the power of money to motivate collaboration.  But that would be incorrect.  Money has been and continues to be an important motivator for participating in collaboration and co-creation activities. Companies like TopCoder, that helps co-create software programs, offers prize money to its winners, as does Electrolux, to the winners of its annual Electrolux Design Lab contest. Even companies like Hallmark, where the rewards for collaboration are mainly psychological, offer some form of monetary rewards in the form of coupons and sweepstakes prizes.  Frito-Lay, who so successfully used collaboration to topple the previous King of Super Bowl advertising, Anheuser-Busch, relies heavily on prize-money to stimulate the creative juices of its customers.  The prize money pie for creating eye-popping, chart-topping advertising is $5,000,000 (see below and visit www.crashthesuperbowl.com to learn more).

So, next time your company plans a collaborative innovation program, don’t discount the power of incentives in mobilizing the time, effort, and creativity of potential collaborators.  Collaborators are after all regular people, living busy lives.  Don’t assume they will queue up to participate in your collaborative innovation program.  Ask yourself why they should participate?  What’s in it for them?  Then design the appropriate incentive structure to invite and reward their participation.

About the author:

Gaurav Bhalla is a strategy, innovation, and marketing professional with global experience, having worked on three continents and with companies in over 20 countries. He is also owner and CEO of Knowledge Kinetics. The company focuses on the practice of customer-driven innovation and value co-creation.Gaurav previously was the Global Innovation Director, at Kantar-TNS, one of the world’s largest market information and insight companies. Additionally, he held positions in corporate strategy, brand management, sales management, and market research at companies such as Nestle, Richardson Vicks, and Burke.

Dr. Bhalla holds a BA (Hons.) degree in Economics and Mathematics from Delhi University, an MBA with a concentration in Marketing and Finance from the Indian Institute of Management, Ahmedabad, and a PhD in Business from the University of Kansas. He has published research papers in leading technical journals dedicated to marketing, marketing research and statistics, and has presented before professional and academic societies in the USA and abroad. Dr. Bhalla has also served as an adjunct professor at Duke University’s Fuqua School of Business. He is currently associated with the University of Maryland’s Smith School of Business as a member of the Department of Marketing’s Corporate Advisory Board.

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    Money and/or prizes that reflect the customers interests or needs.

    Prizes could be from the company and/or from partnering firms where reciprocity occurs. That is the prize provider also has a customer-involving offer and those who participate get prizes from the other business or businesses in the partnership

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