Customers becoming creators: how firms leverage technology and consumers for new value

In today’s digital business environment, both firms and consumers are experiencing a tidal shift of their respective roles in value creation. Customers have gone from being a target of firm offerings to playing an active role in participating and contributing to the firm value proposition. As individuals buying and, thus, consuming products or services, consumers are now co-creators of the products and services offered by firms. For example, Nike allows consumers to design their own shoes through a digital interface named NikeID. This represents a departure from the traditional stylist-driven offering.

Information and communication technologies (ICTs) foster value co-creation (Lusch and Nambisan, 2015, p. 168) by providing firms and consumers with a wide range of tools to enable direct and near real-time interactions. Personal computers, smartwatch applications and social media multiply customer contact points across digital channels and media within omni-channel strategies. The unprecedented information processing power of ICTs empowers firms with the ability to build, modify or adapt their value proposition according to the sensed actions and behaviors of consumers. In this sense, consumers are co-creators of the service and consequently co-creators of the value proposition (Prahalad and Ramaswamy, 2004). Consumers co-create the service value by mobilizing their resources – i.e. skills, capabilities and knowledge – jointly with those mobilized by the firm. These tools represent the building blocks for co-created technology-dependent strategic initiatives, where technology plays a fundamental role but “as part of an activity system that fosters the creation and appropriation of economic value” (Piccoli and Ives, 2005).

Despite the central role of ICTs in enabling the combination of resources that underpin value co-creation, little is known about value co-creation initiatives available to managers for business opportunities.

To fill this gap, this paper aims to provide managers a framework representing the strategic initiatives that managers can pursue to profit from digital co-creation. We identify four distinct types of technology-based value co-creation initiatives: community, customization, reputation and sense.

The paper is organized as follows: we first propose a definition of value co-creation as a service created simultaneously by both the firm and its customers through resource integration. We then illustrate the role played by technology in the value co-creation process (Lusch and Nambisan, 2015).

We advance a two-dimensional framework based on the roles...