Co-creation and value co-creation

Conversations that I had with some of my students revealed a certain amount of confusion in the understanding of the concept of co-creation and value co-creation especially when the terms are looked from the perspective of the service dominant logic (SDL). Since SDL did not differentiate between services and products, this post will refer to service to mean both.

Co- creation in the literature has been used to mean that users/customers 'come together' with the providers of the service ( subsequently termed providers in this post) to co-create a service. Participatory methods, ethnography, contextual design, personas (see earlier post) and even living labs are examples of the techniques of co-creation (there are many more with differnet levels of complexity). In fact co-creation is sometimes replaced by the terms co-production or co-design to differentiate the stages of the service life cycle. It is obvious that not all users/customers will be involved with co-creation. In my opinion these activities were undertaken by the providers so that they can present a value proposition to future users of their service.

Now, the term value co-creation in  SDL has a different meaning altogether. In the explanation on SDL by the reknowned authors on the subject, it was stated that although the users/customers might not be  involved in co-creation (as expalined above) they do not have that option in value co-creation. Value co-creation is something that is experienced in the users/customers' space. They are the ones who will ultimately co-create the value of the value proposition. That is the reason why value co-creation is synonymous with value in use.

The fact that value co-creation is determined absolutely by the user presents a certain amount of ambiguity and variability. Obviously different users/customers will have or experience different value in use of certain products because or several factors like availability of resources, situational and environmental conditions (see post on value in use). This variability is difficult to anticipate and obviously it is quite impossible to cater for all of them in all value propositions. This presents a difficult problem for the designer of the service. This problem is elaborated by Ueda et al (2008) in his paper on the relationship between value-co-creation and the class III problem of emergent synthesis. A similar sentiment is expressed by Patel and Heckney (2008) in relation to designing information systems that will cater for emergent processes.

However, there are frameworks in the literature that can be deployed to aid in the design problems mentioned above. For example, Prahalad and Ramaswamy's DART model can be operationalized to aid value co-creation and so do the models provided by Gronross (2008) and Payne et al (2009), to name a few.

Once we have the service in place, the next question that boggles some of the researchers is how do we evalute or measure the value in use. That is another area worthy of research. Perhaps we can refer to Macdonald et al (2009) as a starting point.

Ref:
Macdonald et al (2009), Towards the Assessment of the value-in-use of product-service systems: A review, Proc for PMA Conference, Uni. of Otago, NZ.
(The rest of the ref can be easily googled :) )