Empirical evidence of customer involvement forms

Empirical studies suggest that different forms of customer involvement have their own advantages and are suitable for different conditions (Cui and Wu, 2017; Witell, et al., 2011). Traditional market research techniques are commonly regarded to function better when customer needs are not latent but are spoken and clear (Witell, et al., 2011). In practice, considerable knowledge related to existing offerings is accumulated through customer involvement (Blazevic and Lievens, 2008). Thus, utilizing customers as an information source tends to drive incremental changes in the offerings. Collaborative approaches, in contrast, have been found to produce more innovative ideas and knowledge than traditional market research techniques (Blazevic and Lievens, 2008; Mahr, et al., 2014; Witell, et al., 2011). Empirical findings also demonstrate that co-development can serve as an effective means to foster relationships between the parties and develop capabilities in customization (Hsieh and Hsieh, 2015). However, it has been claimed that a firm cannot achieve double pay-offs using customers extensively as information sources and active

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participants in the development process (Cui and Wu, 2017). Thus, choosing either approach is recommended.

In general, customer involvement that emphasizes dialogical co-creation of knowledge is found to be an effective means of gathering valuable information (Hsieh and Hsieh, 2015). Co-created knowledge can be highly relevant, and it can be obtained at a low cost when the relationship between the focal company and customers is close (Mahr, et al., 2014). Moreover, in light of the empirical findings, co-development is preferable when customer needs are heterogeneous (Cui and Wu, 2016). That is, the traditional techniques of collecting information from customers are better when customer needs are homogenous (ibid.). Moreover, when a company follows an experimental strategy in service and product development (i.e., emphasize trial and error), using customers as an information source has been found to be more effective than co-development (Cui and Wu, 2017). Furthermore, some empirical evidence suggests that customer co-created solutions could provide higher profits than those based on more traditional techniques (Witell, et al., 2011).

Although co-development seem to have some clear benefits, it produces only moderately novel knowledge (Mahr, et al., 2014). Thus, although co-development can produce more novel information than the more passive approaches, it does not guarantee, for example, innovative ideas. A lead-user approach is one solution that could possibly result in innovative but still feasible ideas. According to empirical findings, the lead-user method can address more original customer needs (Lilien, et al., 2002), provide greater novelty of ideas (Lilien, et al., 2002; Mahr, et al., 2014), and produce knowledge that is highly relevant to the focal company (Mahr, et al., 2014).

Moreover, the ideas generated by the lead-user approach have resulted in higher sales and higher forecasted market share than the ideas generated through traditional techniques (Lilien, et al., 2002), thus increasing the overall success of development efforts (Gruner and Homburg, 2000). In contrast, the lead-user approach has been criticized for being time-consuming and burdensome (Olson and Bakke, 2001).

Furthermore, finding the lead users can be a challenge (Edvardsson, et al., 2012).

Table 7 summarizes the key customer involvement literature that discusses the different customer involvement forms and their implications on service development.

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Table 7. Examples of studies indicating the role of different customer involvement forms in service portfolio development AuthorsPrimary focus Type of studyContext Key findings Contribution to this study Blazevic & Lievens (2008) Co-production of knowledge with customers for different innovation tasks Empirical: multiple case study (three interaction channels) Services, B2B (not stated explicitly), and computer services Three different roles of customers in knowledge co-production: passive user, active informer, and bidirectional creator; co-produced knowledge can be utilized throughout the innovation stages

Different customer roles in knowledge co-production and across development stages Cui & Wu (2016) Antecedents and impacts of three forms of CI: customers as an information source, as co-developers, and as innovators

Empirical: survey (n = 341) Both services and products, B2B/B2C, and multiple industries Three CI forms employ different ways of utilizing customer knowledge; when customers’ needs are heterogeneous, their role as co-developers and innovators is preferable

Conditions under which different CI roles for customers are more beneficial Cui & Wu (2017) Two forms of CI: customers as an information source and as co-developers

Empirical: survey (n = 236) Both services and products, B2B/B2C, and multiple industries Both forms of CI have their own advantages; engaging in both forms will not generate double pay-offs

Differing roles of customers as an information source and as co- developers Edvardsson et al. (2012)Integration of customers within service development through existing methods

ReviewServices and B2B/B2CClassification of CI methods by introducing a framework based on user informationOverview of existing CI methods; lack of methods in a B2B setting Gruner & Homburg (2000)Performance impacts of the intensity of CI at different stages and under different characteristics of customers Empirical: interviews (n = 12) and survey (n = 314) Products, B2B, and machinery industry CI at some stages (but not others) has a positive impact on new product success; characteristics of customers also have a significant effect; use of lead users is beneficial

CI at the early and late stages increases new product success; collaboration with lead users improves the success rate Hsieh & Hsieh (2015)Effects of customer co- creation on the performance of service innovation

Empirical: survey (n = 149) Services, B2B/B2C (not stated explicitly), and high-tech Dialogic co-creation not only provides valuable information and knowledge but also improves the relationship between companies and customers Promoting relationships between the focal company and customers through CI

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manufacturing industries Lilien et al. (2002) Lead user idea- generation vs. more traditional methods

Empirical: quasi- experimental design, qualitative, and quantitative Both services and products and 3M as the case company

Lead-user method improves the innovation capabilities of a firm and promotes salesLead-user method improves idea- generation relative to traditional methods Mahr et al. (2014)Customer co-creation; the characteristics of involved customers and the communication channels

Empirical: survey and 126 co-creation projects Both services and products, B2B/B2C, and multiple industries Customer co-creation is most beneficial for highly relevant but moderately novel knowledge; co-creation with close customers provides highly relevant knowledge; novel and relevant knowledge can be obtained from lead users

Co-creation of knowledge; the benefit of customer closeness; lead-user method Witell et al. (2011) Proactive and reactive market research techniques in NSD and NPD

Empirical: survey (n = 195), quasi- experimental design (n = 50) Both services and products and B2B/B2C The relationship between using customer information and profits is stronger for co- creation-based techniques than for traditional market research methods Active customers produce ideas that are significantly more innovative

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To conclude, the current research on customer involvement offers important insights into the various customer involvement forms. Nevertheless, the current understanding is not complete, and authors have called for research that helps to understand, for example, the differences between the distinct customer involvement forms and the conditions under which they are beneficial (Cui and Wu, 2016; Witell, et al., 2011) as well as research that simultaneously explores different forms and their trade-offs (Cui and Wu, 2017). In particular, prior research does not provide a consistent picture of how customer involvement forms differ in relation to the different ways through which service portfolios can be renewed. For example, some empirical evidence deals with incremental and more radical changes in the offerings, but the topics of developing customer service elements or more complete offerings have been rarely touched upon.