Utilizing Customer Knowledge in Innovation: Antecedents and Impact of Customer Involvement on New Product Performance

Abstract

This study examines the antecedents and impact of three forms of customer involvement in innovation: customer involvement as an information source (CIS), customer involvement as co-developers (CIC), and customer involvement as innovators (CIN). We propose that the three forms of customer involvement employ different ways of utilizing customer knowledge and thus are influenced differently by the nature of customer knowledge, the firm’s knowledge management strategy, and organizational support for knowledge management implementation. Using primary data from multiple industries, we test a set of drivers along these three dimensions and find that the three forms of customer involvement are driven by different factors. Furthermore, the impact of customer involvement on product performance is contingent upon the firm’s technological capability, and the contingent effect also varies across different forms of customer involvement. These findings provide important theoretical implications as well as practical guidance for adopting and managing customer involvement in innovation.

Keywords: customer involvement, innovation, customer knowlege, co-creation, co-development