Over the recent years, social media has conquered its position as the most powerful and popular source of information, created by and for consumers that want to learn more about products, persons, brands, and basically everything. Social media has transformed the way we do business and the success of social media websites is highly dependent on their users. Some users may now also say that they owe their success to social media, as they have become well known celebrities due to their contributions on social media websites. Beside this highly unlikely carrier prospect, it is still debatable what people exactly benefit from social media and for what reason they would contribute.
Sustained profitability lies in understanding sources of value for customers. For that reason, it is only suitable that the value a product delivers to the customer should be the main factor for setting prices. Cost-based and competition-based methods of pricing are outdated and customer-value based pricing is now recognized as the best working approach (Ingenbleek et.al., 2003). Though, it appears that only a minority of companies (17%) have implemented this type of pricing strategy, despite the apparent benefits. One benefit example is that research shows that customer-value based pricing is positively correlated with new product success as there is a direct link with the customer needs (Ingenbleek et. al., 2003). Especially in the current market environment, where it is difficult to have a differentiating position, obtaining such an advantageous pricing position can be crucial to help you go a long way.
Understanding the value of customer participation as a vehicle to generate repeated business is often emphasized in business assessment. Just basic business logic shows that it makes sense to listen to your customers (Merlo et.al., 2013). Take “listening” to the next level and you build a situation of co-creation. When adapting co-creation, there will be a change in the current distinct roles and a situation from trying to find customer needs and adjust the product to fit, to a new dynamic of joint customer and producer effort of creation. The aim of involving the customer in the process is to restructure the value chain and obtaining a differentiated position (Humphreys et.al., 2009). Some say that co-creation might become a requirement to stay viable in the future.