Journal of Service Management

Purpose – Customer co-creation is becoming increasingly popular among companies, and intensive communication with customers is generally seen as a determinant of the success of a new service or product. The purpose of this study is to analyze customer co-creation based on four dimensions of communication – frequency, direction, modality, and content – in order to understand the value of customer co-creation in service innovation. One of the key aims of the study is to investigate whether all dimensions of customer co-creation have an effect on product and market success, and if the effect depends on the degree of innovativeness of a development project.

Design/methodology/approach – The authors conducted a study including 334 managers with experience in new service and product development to examine how development projects applied customer co-creation in terms of communication in order to address future customer needs. Data were analyzed using partial least squares (PLS). The first analysis was performed with a sub-sample of 207 development projects regarding incremental innovations. A subsequent analysis was performed with a sub-sample of 77 development projects on radical innovations.

Findings – A total of three of the four dimensions of customer co-creation (frequency, direction, and content) have a positive and equally significant effect on product success when developing incremental innovations. For radical innovations, frequency has a positive effect and content has a negative significant effect on product success. These findings suggest that co-creation and innovation can be combined, but that the choice of methods for co-creation differs depending on whether incremental or radical innovations are developed.

Originality/value – Despite a general consensus that co-creation with customers is beneficial, there is a lack of agreement regarding how and why. The present article addresses this shortcoming and shows that co-creation is largely about communicating with customers in order to understand their future needs. On the other hand, a company working on radical innovations may wish to limit customer input that is too concrete or solution based.