Can customers really contribute to creating major innovations? Yes!
This research challenges the idea that customers can not help a firm create major innovations. It examines the roles and specific contributions customers provide to major innovation projects in small and young technology firms.
What you need to know
Involving customers when creating major innovation can lead to better outcomes for both parties. Using an iterative approach to new product development provides many opportunities for customer involvement through opportunity recognition, funding, development & testing, commercialization and feedback activities.
What did the researchers do?
Nicole Coviello and Richard Joseph asked two questions: 1) can customers participate in new product development for major innovations; and 2) what are the capabilities that the firm needs for this process? The team studied the major innovation projects of six young firms to identify customer roles in the innovation process, comparing projects that succeeded and failed.
What did the researchers find?
Successful innovation projects use ongoing feedback between the project team and customers throughout the life of the project within an iterative and overlapping development process. This process includes opportunity recognition, customer-based funding, development & testing, commercialization and feedback activities, providing many opportunities for customer involvement.
Customers roles can include feature identifier/requester, project funder, buyer, technical advisor, co-developer, approver, reference/promoter, sounding board and critic.
In successful innovation projects, customers took on seven to eight of these roles across all five activities. In contrast, customers in failed projects took on only one to three roles through the process.
The researchers also found that innovation projects were successful when the development process was non-linear (messy and free-form). Firms that struggled with their innovation were more encumbered by entrenched processes, rules, and assumptions.
Firms also benefit from involving a mix of customer types in their innovation process, increasing the diversity of resources and improving market relevance of project outcomes.
How can you use this research?
Technology firms can use this research to identify roles their customers can take on during major innovation projects.
Customers of technology firms can use this research to identify new ways they can contribute to innovation projects for mutual benefit.
Want to know more?
Contact Nicole Coviello
Article citation: Coviello, N., Joseph, R. (2012). Creating Major Innovations with Customers: Insights from Small and Young Technology Firms. Journal of Marketing, 76, 87-104.