Insights: AMA's digest of the latest findings from marketing's top
IKEA, the innovative Swedish furniture retailer, made popular the concept of customer coproduction. Over 60 years ago, IKEA offered a flat-pack table that customers had to assemble on their own in order to save money. As explained on its website, “We do our part, you do your part, together we save money.”
Of course, IKEA is not alone in emphasizing and even increasing the role customers play in the production of goods and services. At grocery stores, we increasingly check ourselves out and bag our own groceries. At restaurants, we pick up our own food and bus our own tables. And, in categories such as barbecues, computers, and exercise equipment, we assemble our own products.
On the one hand, research shows that customer coproduction often leads to higher satisfaction. It can be enjoyable and often leads to better results. On the other hand, anyone who has ever assembled their own barbecue (Should I have leftover pieces?), swing set (Seriously, 984 steps?), or furniture (I don’t think it’s supposed to lean that way.) knows that the process is not always pleasant.
As businesses continue to shift more work onto customers, we must step back and consider how to manage the potential negative impact of difficult coproduction processes on customer satisfaction.
Managing the Negative Impact of Coproduction
In the November 2015 issue of Journal of Marketing, Till Haumann, Pascal Gunturkun, Laura Marie Schons, and Jan Wieseke of Ruhr-University of Bochum published a paper that provides important insights into this issue.
In their paper, “Engaging Customers in Coproduction Processes: How Value-Enhancing and Intensity-Reducing Communication Strategies Mitigate the Negative Effects of Coproduction Intensity,” the researchers share the results of an experiment done in cooperation with a ready-to-assemble furniture retailer.
The researchers hypothesized and found that higher perceived coproduction time and effort led to lower customer satisfaction. Essentially, when customer time and effort are higher, but benefits remain the same, customers are less likely to be less happy with the process – and lower satisfaction with the process spills over onto product satisfaction.
Essentially, the ratio of outputs to inputs between the customer and the company has gone out of balance. With every bit of extra customer time and effort, the exchange becomes more and more inequitable. This makes sense and is perhaps not revolutionary.
However, the researchers didn’t stop there. They also looked at how different communication strategies might restore equity even when coproduction time and effort are high. Specifically, 803 customers of the retailer were randomly assigned to one of six groups – a control group and one of five different communication strategies.
Before they made a furniture purchase, the customers provided background information in a survey and were exposed to an advertisement poster with informative text and a matched image that reflected one of the following communication strategies.
1. Economic Value: The poster communicated that customer effort in self-assembly enables the firm to offer lower prices.
2. Relational Value: The poster communicated that the self-assembly task could be done with family and friends to satisfy relationship needs.
3. Combined Value: The poster communicated both economic and relational value benefits.
4. Self-Service Support: The poster communicated that the firm had available a support hotline for customers who experienced assembly difficulties.
5. Full-Service Support: The poster communicated that the firm had a reasonably priced service partner who could do the assembly for the customer.
After they made a purchase, customers were sent a second survey that measured their perceptions of self-assembly time and effort as well as satisfaction with the process and product.
The results revealed that all five communication strategies worked. Specifically, the research showed that either (1) drawing attention to the customer benefits of coproduction (strategies 1-3) or (2) highlighting other inputs that the company is making (strategies 4-5) mitigate the negative impact of coproduction time and effort on satisfaction.
In other words, high coproduction time and effort has a negative impact on customer satisfaction with the process and the actual product, but the negative impact is not as strong when the company either highlights the benefits of coproduction or other company inputs.
How to Make Coproduction Seem Reasonable, Even Desirable
The results point to four recommendations for making coproduction seem more reasonable and, ideally, even desirable.
First, the results make it clear that a company should make every effort to make the coproduction process as quick and painless as possible for customers. Customers are willing to accept a coproduction role for a lower price or other benefits, but any undue burden of the process will reflect negatively on the company and its products.
Second, the research shows that highlighting benefits of coproduction reduces the negative impact of coproduction on customer satisfaction. Importantly, it revealed that these benefits extend beyond those directly related to the transaction – lower price in this case. In fact, drawing attention to relational benefits of coproduction proved just as powerful. With this in mind, marketing managers should consider what other benefits might be highlighted in communications to customers. Perhaps sustainability could be highlighted. Perhaps a sense of accomplishment could be highlighted. And so on.
Third, a more indirect conclusion of the research is that any additional benefits that directly result from the coproduction process can improve perceptions of equity and satisfaction by increasing the ratio of outputs to inputs for the customer. The ultimate goal for any self-service or self-production process is to incorporate benefits that can be uniquely satisfied by coproduction. For example, coproduction offers a unique opportunity for customers to customize – and ultimately optimize – a product for their unique needs. As another example, the company could consider creative ways to enable customers to share their accomplishments with others – or even to gain a sense of accomplishment, such as turning self-assembly into a game or competition.
Finally, the experiment revealed that communication that highlights customer benefits or company inputs to coproduction can have a powerful impact. And, amazingly, this was achieved with a single poster days or weeks before the actual furniture was purchased. A firm should certainly consider not only what to communicate to customers about coproduction, but also when, where, and how often to communicate to have maximum impact.