Customer co‐creation in service innovation: a matter of communication?

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.