Innovating with Customers: How You Can Unlock Untapped Creativity and Build Brand Loyalty

Key Takeaways:

• ‍Empower customers as co-creators: Actively involve them in creative and decision-making processes to drive innovation and loyalty.
• ‍Establish a structured & transparent process:  The co-creation process must have clear guidelines, structured feedback loops, and meaningful incentives to engage customers and ensure quality control.  ‍
• Balance customer creativity with practical constraints: Companies consider resource constraints and ensure customer ideas align with brand strategy.

Our ongoing series on customer co-creation has explored powerful strategies for developing products that truly resonate with customers. In our first two articles, Innovate with Your Customers: The Key to Continuous Improvement and Market Leadership and Innovating with customers: How you can use MVPs to create successful products, we examined level 1 and level 2 co-creation, showcasing how different levels of customer-centric innovation, as seen in Unilever and Slack respectively, drive product improvement through feedback.

However, co-creation encompasses more than feedback. In the final part of our three-part series, we will explore how level 3 co-creation is a transformative strategy for businesses seeking to drive innovation while strengthening customer loyalty. It takes customer collaboration to a new level by having customers actively involved in the decision-making and creative process. This direct partnership invites customers to suggest designs, contribute ideas, and influence brand direction.  

At this level, the relationship between customer and business is more dynamic and can lead to customised innovative solutions that align with customer desires and needs. We’ll delve into how LEGO utilizes level 3 co-creation to crowdsource ideas and create a devoted following of customers.

How Lego’s Co-Creation Strategy Propelled them to Greater Heights

A prime example of level 3 co-creation is LEGO Ideas, a community-driven online platform that was instrumental in reviving the LEGO brand. By creating this platform, LEGO transformed customer engagement and made their fans co-creators, leading to both increased innovation and loyalty.

Here’s how LEGO implemented Level 3 co-creation with LEGO Ideas:

1. User submissions: LEGO Ideas is an online platform where fans can submit their own set designs. This transforms customers into active co-creators, turning product development into a collaborative experience. This platform not only empowers customers and deepens engagement but also cultivates a powerful sense of ownership among users.
2. Community voting: Once a design is submitted, the community can vote on the ideas they like. They can also leave comments and suggestions on submitted designs. This feedback helps designers refine their ideas while generating excitement around potential new products. This way the community actively shapes which ideas get recognized. When an idea reaches 10,000 votes, it is reviewed by LEGO’s internal team.
3. Review and collaboration: Once an idea enters the official review process by LEGO's design team, the designers at LEGO work closely with the creator of the idea to ensure it meets LEGO's standards in terms of functionality, safety, and marketability. During the review, LEGO assesses the feasibility, brand alignment, and market potential of the idea. While only a few designs are selected each cycle, the open process builds trust within the community. This transparent approach keeps the community informed and invested in the evaluation process. Crucially, it provides LEGO with information on genuine interest and popularity before committing to production.
4. Crowdsourced success: In some cases, LEGO has worked with fans on tweaking designs or making necessary changes to bring the concept into a fully realized, market-ready set. Fans are involved not just at the ideation stage, but also in refining their ideas.
5. The Final Product: If a customer’s initial idea becomes a product, the creator not only earn a percentage of the sales revenue but are also credited on the product packaging. They are featured and their story is promoted, giving the creator a sense of accomplishment. This recognition significantly strengthens community bonds, as it inspires others to participate by making the creators feel valued. The financial reward also further incentivises high-quality submissions.

This collaborative and iterative process ensures that by the time an idea reaches production, it has been optimised and shaped by both the community and the company resulting in products that align with customer desires and brand standards. It fosters a powerful sense of ownership among participants as they become emotionally invested, which translates into heightened brand loyalty and greater willingness to pay. The resulting products improve commercial appeal as they more closely fit costumer preferences which ultimately increases purchase intention.

Many of LEGO’s most popular sets such as Women of NASA and the Beatles’ Yellow Submarine are due to LEGO Ideas. It has revitalized the brand by enabling Lego to tap into the creativity of its fan base, and empowering customers to be a part of the brand’s development.

Utilizing Level 3Co-Creation

This level of co-creation also requires a high level of trust and open communication which is why an effective level 3 co-creation strategy should include the following:

1. Co-creation platform: This platform should be intuitive and easily accessible to share and submit ideas.
2. Transparent idea evaluation process: A clear, structured process for evaluating ideas should be visible to users, outlining each step from submission to potential development.
3. Incentives to motivate participation: Incentives are essential to encourage ongoing participation.
4. Feedback loop for iterative development: This allows the company and users to collaborate on refining ideas, creating a sense of shared ownership.
5. Celebrate co-creators: Publicly recognising contributors by highlighting their role in the final product builds community pride and reinforces loyalty.

Key Considerations

While there are many benefits to utilising level 3 co-creation such as increased innovation and brand loyalty. Businesses must also consider several key factors when implementing this strategy:

• Resource constraints: Level 3 co-creation requires responsive, even dedicated teams
• Intellectual property rights: Having clear IP guidelines is essential to prevent copyright infringement and avoid conflict over ownership of ideas.
• Balancing customer and brand goals: Companies must ensure that customer-driven ideas align with the brand’s goals and mission to maintain consistency and quality.

For businesses seeking to leverage the power of co-creation, it is essential to establish a clear process, allocate sufficient resources, and ensure that customer contributions align with the brand’s vision.

Conclusion

Level 3 co-creation represents a significant shift in how businesses engage with their customers. It goes beyond the valuable feedback loops of Level 1, where companies like Unilever refine existing products based on broad consumer insights, and the crucial prototype validation of Level 2, exemplified by Slack's user-driven MVP development. By creating a structured, transparent platform for collaboration, offering incentives, and celebrating co-creators, companies can drive innovation while deepening customer loyalty.

Companies like LEGO have demonstrated how effective this approach can be in creating products that resonate with customers while driving continuous innovation. By embracing Level 3 co-creation, companies can unlock new opportunities for innovation and build stronger, more loyal communities around their products.

At Binomial Consulting, we specialise in strategies that help companies develop innovative solutions that engage customers just like Lego’s success story. Ready to transform your customers into active co-creators and unlock a new era of innovation and loyalty?  Contact us today to unlock the power of collaborative creation and build a thriving community around your brand!