Sourcing Innovation from You Customer: How Multinational Enterprises Use Web Platforms for Virtual Customer Integration

Abstract

Integrating the customer in the innovation process is believed to be a powerful means to reduce failure rates and to increase the revenue from new products. Although many companies have launched programs to enable such integration, the understanding of the mechanisms behind successful programs remains limited. Furthermore, the benefit of integrating customers in the innovation process has to be weighed against the costs. Virtual customer integration has been discussed as a way to limit these costs and bring the benefits of potentially unlimited scalability. Using a sample of the Euro Stoxx 50 companies, we shed light on the various types of virtual customer integration platforms, their limitations, their benefits and the mechanisms that have to be put in place to make them succeed. Results indicate that only a limited number of platforms go beyond the sourcing of ideas. Especially the integration of the customer in the execution phase of the innovation process remains largely limited to digital goods.

Keywords: Virtual-customer integration, customer-active paradigm, innovation management, lead user, developer platforms

JEL Classification: E17, M1, M19