Co-Creation of value is an organizational mindset. Although traditionally thought of as occurring between the organization and the customer co-creation of value can happen anywhere there is an interaction between people.

Before we go any further lets define co-creation of value. Dr. Venkat Ramaswamy of the Ross School of Business at the University of Michigan defines co-creation of value as follows.

Co-creation of value is the use of engagement platforms and an experience mindset to create mutual value.

There are two main ideas in this definition that need to be explored in more detail. The first question is what is an engagement platform? The engagement platform is the environment where the organization meets the customer. In the physical world this can be a retail store, a call center or anywhere two way communications can occur between the organization and the customer. In the digital world a similar definition applies anywhere your organization connects with its customers is an engagement platform. This could be your website, message, boards, cell phone application, blogs, email, facebook, and twitter just to name a few. A few large corporations like Nike with its Nike+ system have gone so far as to develop their own digital environments to collaborate with consumers. Co-creation is not only about developing the environment for the customer to interact with our organization but also developing and environment for customers to interact with each other.

The second question is, What do we mean by an experience mindset? An experience mindset starts with the voice of customer and takes it to the next level. By looking at the environment from the customer’s point of view but also from our employee’s point of view we can develop and engagement mindset. This mindset requires us to develop the user experience from all sides of the interaction to maximize engagement between the firm and the customer and almost as importantly the customer and the customer. This simple definition is the key to success with social media marketing. Historically marketing has focused on leveraging the core competency of the organization to craft a message and deliver a product to the consumer at a price that maximizes the economic benefit to the organization. This is still a valid goal of marketing but with the rise of social media, marketing can do so much more.

Dr. Ramaswamy work on co-creation which this post is based has had a major influence on the thinking of the Maple Seed marketing team. We highly recommend his book with C.K. Prahald, The Future of Competition where the idea of co-creation was first discussed.   In addition look for The Power of Co-Creation by Venkat Ramaswamy and Francis Gouillar to be released in October 2010 for great case study’s on the power of Co-creation.