Does Customer Co-creation Really Pay Off? An Investigation into the Firm’s Benefits from Customer Involvement in New Product and Service Development

The active involvement or co-creation of customers in the innovation process is nowadays very common for firms. Since the awareness that it also entails the involvement of customers, many organizations have taken this step. Customers are nowadays assailed by firms’ requests to participate in co-creation challenges, crowdsourcing invitations, and so on. Until now research has mainly focused on the question why customers indulge on such requests and what they get out of these participations. However, little attention has been given to the benefits firms reap from co-creation initiatives. This research tries to bridge that gap and investigates the outcomes organizations perceive from co-creating with their customers. Through a research data on the employment of co-creation by 154 Dutch organizations, we investigate how this co-creation affects innovation success, financial results, reputational results, and organizational benefits. Compared with organizations that do not co-create with their customers, organizations engage in co-creation benefit better from these efforts, culminating in more successful innovations, an increase in business reputation and an increase in organizational capabilities. However, customer co-creation does not seem to have a better effect on the financial results.