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Consumers and the Co-Creation of Meaning in Online Settings: Practices and Implications for Online Business

To say that the Internet has changed the way in which business is conducted would be to grossly understate the transformation that has taken place in the last decade or so due to the spread of Internet technologies and the growth in online capabilities for both businesses and consumers. Price comparisons, shopping with companies around the world from the comfort of one’s own home, and a host of other consumer activities that greatly increase consumer power and thus business competitiveness in almost any industry. On the business side of the equation, Internet capabilities enable faster communication between warehouses/suppliers and factories/retailers, meaning business processes that are leaner and more efficient are now possible, quality and consistency across networks are more controllable, and a variety of other processes can be enhanced in many ways. These new capabilities are only part of the impact the Internet has had on businesses and consumers, however; the more abstract elements of business operations are also impacted by the Internet and online activities, down to the very creation of meaning in business-consumer interactions. Meaning in online settings is explicitly the result of co-creation, and this has a profound impact on the way businesses must conduct themselves and facilitate their consumers.

On the Internet, Business is Service

One of the fundamental shifts that has taken place as a result of broad Internet accessibility and capabilities is the emergence of a constant dialogue between businesses and consumers, to the point that ever business can in some ways be seen as a service provider when the online element is considered (Van Dijck & Nieborg, 2009). Even straightforward retail establishments must now contend with instant reviews form customers broadcast to potentially millions with a few clicks, internal policies and even executives’ personal views becoming matters of broad public knowledge and interest overnight, and with the added business capability of instant and constant mass-communication to consumers at a very low cost. All of this makes any business-consumer relationship into an ongoing service experience, and the study of service systems as they have emerged around Internet technologies suggest strongly that interpretations of service and the meanings created in service dialogues are the work of both businesses and consumers — that is, meaning is co-created — and that businesses must alter their perspectives and respond accordingly (Maglio & Spohrer, 2008; Payne et al., 2008; Vargo et al., 2008).

Simply put, service science asserts that the underlying basis for every exchange is ultimately “service” — the use of knowledge and/or skills for the benefit of another (Vargo et al., 2008). Internet technologies have made the underlying service of every business exchange more explicit by shifting the consumer focus away from the specific product or service provided by a business and towards the overall experience the consumer has with the business (Prahalad & Ramaswamy, 2004; Spohrer & Maglio, 2008). Businesses must respond to this shift in consumer perspective and attitude by shifting their own perspectives and attitudes, not necessarily by letting consumers take full control of the interactions and experiences of the businesses but by acknowledging and accommodating the new role consumers have in creating meaning for businesses in a variety of ways, from their effect on brand identity and image to their individual experiences interacting with a business in person or online, whether they share their experience or not (Prahalad & Ramaswmay, 2004; Payne et al., 2008; Hatch & Schultz, 2010). Most businesses have recognized the need for an online presence at this point, and have begun to come around to the new service model of doing business.

Much of service science is devoted to the concept that the consumer is an automatic and necessary co-creator of value, as the consumer experience is ultimately the test of the business’s success Payne et al., 2008). Put in the language of service science, the value of any exchange is created by the perceptions of both parties to the exchange. For the purposes of this discussion, value and meaning are synonymous — the meaning that is created in any business interaction is the value of that interaction; the nomenclature simply emphasizes the abstract aspect of this co-created substance rather than the practical and more concrete concept aspects emphasized by the term “value.” Businesses engage in the co-creation of value by engaging in the co-creation of meaning, and the Internet more than any communication technology that came before it enables consumers to demand this engagement on multiple levels, which in turn allows businesses to either shift and extend into this new territory or to fail to appreciate this new model and ultimately fold (Piller et al., 2006; Van Dijck & Nieborg, 2009).

Evidence for Success in Building Online Services

There are a number of ways in which businesses have acknowledged and attempted to benefit from the co-creation of meaning that businesses and their consumers are a part of, covering every imaginable aspect of the business-consumer interaction and adding new modes of interaction impossible prior to the Internet. The idea that brand identities, one of the most fundamental means of meaning creation previously thought be available almost solely to businesses (that is, businesses themselves were thought to be primarily if not solely responsible for the creation of their own brand identities and images), are now enormously influenced by consumer commentary and depiction is of special importance in this regard (Hatch & Schultz, 2010). Recent debacles such as the backlash against the Susan G. Komen Foundation for some unpopular political and financial views that came to light or the outcry against Chik-Fil — A for the personal views aired by one of its executives are evidence of the new power consumers hold in the Information Age, but more subtle and less news-worthy applications of this new power can actually be used to businesses’ advantage. A facebook page that actually generates daily dialogue between consumers and the business and amongst consumers themselves will begin to build its own identity as an online community, where meaning is almost entirely created by visitors (in this case consumers); a Twitter feed that updates consumers about company actions or that comments on relevant news items can generate different types of interest and potentially spark chains of conversation that bring new attention to the company from new perspectives (Piller et al., 2005; Van Dijck & Nieborg, 2009). Many businesses have recognized these potentials and tried to take advantage of them, some with greater degrees of success than others.

The degree to which technology has become customizable reflects and is in many ways related to the degree to which information itself has become customizable, and there is no greater or more obvious proof of this than the advent of the cell phone. Cell phones have become a “fashion statement” not simply because of how they look (though appearance is certainly a factor for many when choosing a phone), but also for the brand identity and the functionality that they present to peer groups (Katz & Sugiyama, 2005). Not every player in the cell phone industry recognized this with the same speed, but key players were able to attach certain identities to their phones that are part user-created and hugely user-perpetuated, such as the rabid Apple fans that purchase ach new iPhone iteration as soon as it hits the shelves. Being an Apple consumer is now an identity in and of itself, and this was only able to happen because the company realized that its consumers were part of the identity creating process. Apple has a very strong marketing force, to be sure, but the status and identity of obtaining its products is largely a consumer-perpetuated trend as they have signed on to and carried forward much of Apple’s marketing message while, interestingly, ignoring problems with the company similar to hose that caused backlash elsewhere.

Apple’s business model is not something that most companies without the computer giant’s resources could copy, of course. The company’s appreciation for the consumer’s role in the co-creation of meaning is something that every business could learn from, however. Brands are no longer ways for companies to dictate meaning to consumers, if indeed they ever were, but instead are a means for consumers to take control of businesses by shaping brand identities according to their real, direct, and increasingly constant perceptions of and interactions with the business (Hatch & Schultz, 2010). Businesses must now incorporate consumer feedback or assistance into many aspects of their business models, from direct marketing efforts to charitable layouts and even perhaps to pay structures and executive compensation schemes; as scrutiny grows ever closer and outrage ever louder. More fundamentally, the co-creation of meaning that is recognized as a part of the service exchange and made explicit through online business elements must reshape existing business models to redefine value and to reassess the means by which value is created in the business-consumer relationship. The Internet has provided consumers with the capabilities to become real partners in shaping the directions and even the operations of businesses, and though consumers do not act en masse as a single-minded and purposeful entity in this regard their influence is no less decisive (Van Dijck & Nieborg, 2009). Value and meaning are created when the business recognizes this partnership and gears its operations towards co-creating, not dictating, the types of meaning and value that consumers are pushing towards in an ever-changing and ongoing dialogue.

Conclusion

The co-creation of meaning is something that exists in every interaction, from an academic paper to a piece of advertising. The Internet has made this co-creation explicit, however, as information is now instantly available with a few keystrokes and as dialogues can be carried out — publicly and privately — across great distances between entities of any size. In order to successfully navigate the new markets of the Internet Age, businesses must fundamentally change the attitudes inherent to their business models and shift their perspectives towards treating all consumers as ongoing service customers, while also making concrete operational changes that make use of new modes of meaning co-creation.

References

Hatch, M. & Shcultz, M. (2010). Toward a theory of brand co-creation with implications for brand governance. Journal of Brand Management 17: 590-604.

Katz, J. & Sugiyama, S. (2005). Mobile Phones as Fashion Statements: The Co-creation of Mobile Communication’s Public Meaning. Mobile Communications 31(1): 63-81.

Maglio, P. & Spohrer, J. (2008). Fundamentals of service science. Journal of the Academy of Marketing Science 36(1): 18-20.

Payne, A., Storbacka, K. & Forw, P. (2008). Managing the co-creation of value. Journal of the Academy of Marketing Science 36(1): 83-96.

Prahalad, C. & Ramaswamy, V. (2004). Co-creation experiences: The next practice in value creation. Journal of Interactive Marketing 18(3): 5-14.

Spohrer, J. & Maglio, P. (2008). The Emergence of Service Science: Toward Systematic Service Innovations to Accelerate Co-Creation of Value. Production and Operations Management 17(3): 238-46.

Van Dijck, J. & Nieborg, D. (2009). Wikinomics and its discontents: a critical analysis of Web 2.0 business manifestos. New Media & Society 11(5): 855-74.

Vargo, S., Maglio, P. & Akaka, M. (2008). On value and value co-creation: A service systems and service logic perspective. European Management Journal 26(3): 145-52.