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Executive Interviews: Interview with Roland T Rust on Co-Creation
March 2010
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By Dr. Nagendra V Chowdary
Roland T Rust Distinguished University Professor and David Bruce Smith Chair in Marketing at the Robert H Smith School of Business at the University of Maryland, 
It’s a competitive necessity.
Embracing the relational co-creation
viewpoint enables far more
personalized service. Again, it is
information and communications
technology that is driving this.
We have to be careful, because value
means two things in the literature.
Customer value typically relates to the
lifetime value of a customer to the
company. Value to the customer
implies the utility that the customer
derives from the company. Your
question seems to relate to customer
value, as in customer lifetime value.
Customer value arises from
expanding and extending customer
relationships. For example a bank
may start out with a customer with a
checking account, but over time sell
that same customer loans, certificates
of deposit, debit cards, and many
other possible products. The ability
to expand customer relationships
depends critically on obtaining,
storing and analyzing customer data.
How is it that consumers have
become a new source of competence
for the companies? Are there any
companies that have leveraged on this
new found competence?
Customers are experts about
themselves. So once the customer is
involved in co-creating the service,
the job is done better. Some of the best
and purest examples of this are social
media, such as Facebook and Twitter in the US where the customers
actually create the content.
In what kind of industries do you
think co-creation is highly desirable
and possible?
The most appropriate industries are
those in which products/services
tend to be easily personalized. The
best examples are information service
companies that create personalized
products. I use the term “adaptive
personalization systems” to describe
this. For example, my colleagues and
I recently created a system for
personalizing digital music
downloads.
Many argue that co-creation can at
best work in B2C companies. Do you
think co-creation can work equally
well in B2B businesses? And more
over, how can co-creation be adopted
in such industries as steel,
petroleum, airlines, pharmaceuticals,
electronics, etc., where the industries
are either stable (from the viewpoint
of their value propositions) or their
primary job is to preempt any latent
customer need?
Co-creation can actually work better
in B2B, because a customer is
typically worth more, and therefore
the company can afford to spend
more to collect customer information
and build customer relationships. In
traditional mass market goods
industries, co-creation is harder to
employ. But even in some formerly
mass industries, co-creation can be
employed. For example, many
airlines now let the customer design
their own in-seat experience,
personalizing it through their
interaction with the entertainment
system.
What is the difference between
personalization and customization?
Can it be construed as the difference
between buffet system of dining and
a-la-carte system of dining? Do you
think in the new world of co-creation
these boundaries get blurred? What
would be the implications for
different set of companies of this impending change?
Different people use these terms
differently, and sometimes
interchangeably. I think the key
distinction to bear in mind in
personalization/customization is the
difference between
- having the user proactively make
the choices that personalize the
service; and
- having the service make the
decisions about how to personalize. It
is the latter that the term “adaptive
personalization systems” refers to.
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