25 Co-Creating Experiences of Value with Customers Building Experience Co-Creation Platforms enhances value creation and fosters innovation. SETLabs Briefings VOL 4 NO 1 July - Sep 2006 By Venkat Ramaswamy I n an era of ubiquitous connectivity, active, informed, networked, and empowered customers are challenging the traditional firm- centric process of value creation that has served companies so well over the past hundred years. Prahalad and Ramaswamy (2004) argue that we are on the cusp of a profound shift in the way value is created – from a firm-centric process to a co-creation process jointly by the customer and the company. In a co-creation process, customer value emerges from the space of interactions between the customer and the company, and the quality of customer experiences associated with those interactions and their outcomes – outcomes that simultaneously generate business value to the companies that facilitate them effectively. The traditional view of value creation and its dominant logic are shown in Figure 1 overleaf. This dominant logic of the modern corporation that has served us so well over the past hundred years is now being challenged as never before. For starters, individuals today are far more informed through the Internet and connected with each other than ever before. The mere fact that there are over 1.6 billion cellphones, not to mention countless ways of “voicing” and “self-expression”, and communicating with other consumers (e.g., e- mail, instant messaging, SMS, Blogs with RSS, etc.), enable individuals to learn about others’ experiences with products and services much more rapidly. Firms were assumed to have more information and knowledge than individuals. Individuals now have a “new found freedom” that liberates them from being “targets to be had” by institutions. As individuals increasingly have the motivation and the means to take more control of their experiences, companies can no longer act autonomously, designing products, developing production processes, crafting marketing messages, and controlling sales channels with little or no interference from consumers. Customers now seek to exercise their influence in every part of the business system. For instance, there are currently over 30 million blogs, over one-third of which were created in the first quarter of 2005. Further, over half of