Co-creation: A key to innovation
What is co-creation?
Innovation driven by end users and providers working together…
In value co-creation, firms benefit from increased innovation capacity and speed, reduced risk, a consistent and rich idea pipeline, and faster time-to-market with promising products and services.
Unlike crowdsourcing, co-creation uses a small group of known partners and involves deeper collaboration.
- 58% of the businesses have piloted co-creation projects to help them innovate
- 54% of businesses say that co-creation has helped improve their social impact
- 49% of businesses say they now work with consumers on a regular basis
One could perhaps think of crowdsourcing and co-creation as different aspects of open innovation. “One of the results of co-creation is that the contact between firm and customer moves away from transactional and becomes an experience.”1
The Giffgaff story
Giffgaff—the wholly owned subsidiary of O2 used co-creation as the vehicle for innovation.
Unlike the typical mobile provider, giffgaff is run by members for members.
Giffgaff engaged a community to co-create with, relying on the help of product strategists and vendors as well to unveil novel opportunities by delivering a differentiated service/product.
According to Forrester analyst Douglas S. Williams, the company did all this while sticking to its core principles of honesty, simplicity, transparency, and mutuality. (Get the report here.)
The best thing is to get real brand loyalty and people who care, because then we can do something with it. It’s a much smarter way to do business.
Ash Schofield, Giffgaff (Marketing Week, August 2017)
Founded in 2009, the Uxbridge-based company is popular for its pay-as-you-go plan. Telefónica-owned giffgaff uses no contracts and has none of the ‘drama’ that surrounds a big brand. Its ‘keeping it simple’ low-cost approach and innovative goodybags won it the best all-around mobile network tag from uSwitch.
Why is giffgaff one of U.K.’s favorite brands?
Even the name does its bit! In Scottish, giffgaff means “for mutual benefit.”
This mobile model is based wholly on the power of the community. This was easily a disruptive alternative to the more traditional contract-type plans which the digital native typically shied away from. Giffgaff offer users a SIM card; all they have to do is pick the deal they want. They can switch plans or opt out when they want. In terms of overall performance, coverage, connection speed, and reliability, giffgaff has improved remarkably over the years. (Check out a comprehensive review about the plans here.)
No better way to ensure brand loyalty, is there? A transparent business model (no hidden prices either) and a community of engaged members have propelled giffgaff, which uses the O2 network, to great heights in the last eight years. In 2015, the Mobile Virtual Network Operator (MVNO) had over £210 million revenue!
In Europe, it became the first business to offer full Lithium customer support in Facebook and Twitter. And the company enjoys an NPS on par with Apple and Amazon. Giffgaff also has a great Community Health Index.
How does giffgaff succeed in social business?
There are so many interesting case studies on how giffgaff runs on the principle of mutuality and co-creation to deliver a great customer experience. In a mature market, this company’s differentiated service made its mark.
- Would you believe that it has no call centers? Members answer customer queries (with an average response time of about 3 minutes) and in turn encourage them to become “gaffers” to offer support and bring innovative ideas to make the service better. Members also create tutorial videos and useful articles.
- The company has a PayBack scheme which gives members a chance to earn cash (direct bank deposits, pre-paid credit, or donation to charity) for bringing in friends (new customers), responding to questions on the forum, or suggesting bright ideas to add value to the business.
- The mobile telecom provider even asked the community how to decide the tariffs! Check out their ideas page. If only everyone did this. Dell’s Idea Storm, which was launched in 2007, works along the same lines.
- Giffgaff ensures it clearly communicates the progress of the ideas submitted including the number of votes garnered by an idea, in what stage of the pipeline the idea resides, etc.
- Every year, giffgaff has Run by You awards for its brilliant, hard-working members.
- Giffgaff has taken home many honors: Most Innovative Community award at the Social CRM Customer Excellence Awards, Best MVNO, and Best Telecom Services Provider award.
- The giffgaff team has no ongoing customer support costs. The company gets feedback on everything from pricing to product features, gets promoted via word-of-mouth marketing, and crowdsources interesting business ideas. Solving customer pain points and achieving business outcomes are tied together in this model. It is not easy of course to continuously convince the community or the business how important this concept is to giffgaff.
- Giffgaff, which does all its business online, is also an environmentally responsible company that outperforms month after month. Like any business, giffgaff tracks a few metrics too, such as increased sales, improved customer service, product/service development, and brand advocacy. But remember, everything is related to the community— from customer satisfaction index to number of ideas from the community.
In her book “Do Good: Embracing Brand Citizenship to Fuel Both Purpose and Profit,” Anne Bahr Thompson introduces a 5-step model (enrichment, responsibility, responsibility, community, contribution) to help companies go from “me” brands to “we” brands. Giffgaff has been chosen an example of a brand that delivered on “community.”
A brand like giffgaff, which veers away from the typical business model, is surprisingly successful and continues to evolve, happily creating superior social and financial value over the long term. The “we are all the boss” concept seems to be working, eh?
We could all take lessons on customer retention from giffgaff.
Tell us what you think of the innovative business model which launched its community first and then its MVNO service!