Coined in 2002 by García-Murillo and Annabi, customer knowledge management is the newest thing in the series of customer value management (See customer life time value management & customer network value management). Gathering, managing, and sharing customer knowledge can be a highly valuable competitive tool that companies and scholars have not yet considered to the extent possible it can be done. Today, the insights of the customers should be used right from the very beginning from the product development stage to the final stages of the product life cycle. García-Murillo and Annabi (2002) gives a pretty comprehensive framework of knowledge management, across the entire continuum, that a firm needs to practice throughout the value chain to deliver value for the potential customers.
Having customer insights and managing the same through good processes and is important for getting better and more timely design of new products and services; early warning of possible turbulence and competitive intelligence; customer commitment and loyalty; and deriving the maximum benefits from the synergy of collaboration. So how should one manage the insights customers may have effectively to draw the maximum value for the firm?
Today, a lot of informal knowledge lies in the knowledge portals available in the web. There are so many blogs and online forums where there is a high level of potential customer engagement, through mutual exchanges of information and discussions. Knowledge management through the mining of such unstructured data is one of the surest way to capture the customer sentiments and knowledge. If the insights can be successfully incorporated into the processes while the firm is developing a product, it may be a sure gateway to success.
Today many companies are incorporating a higher degree of customer engagement activities in their relationship management strategies. It is being felt that active voice of a customer can have an effect beyond the customer’s lifetime value and the customer’s network value. The insights can be actually incorporated within the product finalization stage itself, so that the customer can be engaged and bound into a relationship, even before the product is formally launched into the market. Not only this tactic draws higher brand recognition, it paves the path for a higher relationship development of the firm with its customers. Gibbert et al. provides an excellent framework for managing the knowledge of customers through three focused strategies, namely, Prosumerism, Team based co-learning and mutual innovation.
- Alvin Toffler (1980) first used the expression “prosumer” to denote that the customer could fill the dual roles of producer and consumer. The CKM process transforms the customer into a co-value creator, endowing them with new competencies and benefaction opportunities. It liberates the customer from the platform of only past, accumulated knowledge by stimulating the knowledge within them for the co-production of value.
- In team based co-learning, the inter-linkages with the customer base and their interactive joint learning with the customers require a higher level of engagement of the firm with the customers. Customer may be actively involved in the product refinement itself.
- Mutual innovation is possible when the firm actually starts incentivising the potential customers for the mutual creation of value. This is often feasible only if custom made products are being manufactured, and less feasible for standardized products.
In all the three cases, it is evident that there is immense benefits that can be reaped if customer knowledge management can be done to co-create value with the customers. The insights of the customers can be of extreme significance to sustainably market a product throughout the product life cycle. Hopefully, in the future, a higher degree of customer engagement will be available while developing the product itself and throughout the PLC curve.