Practices for Involving Organizational Customers in Service Innovation

  • Heidi M. E. KorhonenEmail author
  • Ilari Kaarela


It is not clear what kind of customer involvement leads to optimal service innovation. An integrative approach is needed so as to link the practices of how a firm involves customers in service innovation to the advantages it is seeking. We apply previous research into service-dominant (S-D) logic and open innovation in order to study the practices for involving organizational customers in service innovation. Our empirical research is based on case studies on six globally operating technology companies known for their innovativeness and service-oriented business with their organizational customers. We describe customer involvement practices based on their openness as in-house development and supplier co-operation, development based on customer insight, co-development with customers, and development by customers. We find that, in addition to obtaining information, ideas, and development partners, these customer involvement practices are used for shaping the context of value co-creation, fostering network effects, living with contingency, and engaging in business with meaning. We also contribute by bringing the research streams of S-D logic and open innovation closer together.


Service innovation Open innovation Customer involvement Service-dominant (S-D) logic Practices Business to business (B2B) 



The authors wish to thank Tekes—The Finnish Funding Agency for Technology and Innovation—and VTT for supporting this research. Our sincere gratitude also goes to the company representatives and our research colleagues that have given their time and shared their ideas for this research.


  1. Baldwin C, von Hippel E (2011) Modeling a paradigm shift: from producer innovation to user and open collaborative innovation. Organ Sci 22(6):1399–1417CrossRefGoogle Scholar
  2. Barras R (1986) Towards a theory of innovation in services. Res Pol 15(4):161–173CrossRefGoogle Scholar
  3. Chandler JD, Vargo SL (2011) Contextualization and value-in-context: how context frames exchange. Market Theor 11(1):35–49CrossRefGoogle Scholar
  4. Chesbrough H (2003) Open Innovation: the new imperative for creating and profiting from technology. Harvard Business School Press, BostonGoogle Scholar
  5. de Brentani U (1995) New industrial service development—scenarios for success and failure. J Bus Res 32(2):93–103CrossRefGoogle Scholar
  6. Desouza KC, Awazu Y, Jha S, Dombrowski C, Papagari S, Baloh P, Kim JY (2008) Customer-driven innovation. Res Tech Manage 51(3):35–44Google Scholar
  7. Drejer I (2004) Identifying innovation in surveys of services: a Schumpeterian perspective. Res Pol 33(3):551–562CrossRefGoogle Scholar
  8. Droege H, Hildebrand D, Forcada MAH (2009) Innovation in services: present findings, and future pathways. J Serv Manag 20(2):131–155CrossRefGoogle Scholar
  9. Ebersberger B, Bloch C, Herstad SJ, van de Velde E (2012) Open innovation practices and their effect on innovation performance. Int J Innovat Tech Manage 9(6):1–23Google Scholar
  10. Edvardsson B (1997) Quality in new service development: key concepts and a frame of reference. Int J Prod Econ 52(1–2):31–46CrossRefGoogle Scholar
  11. Edvardsson B, Olsson J (1996) Key concepts for new service development. Serv Indust J 16(2):140–164CrossRefGoogle Scholar
  12. Edvardsson B, Kristensson P, Magnusson P, Sundström E (2012) Customer integration within service development—a review of methods and an analysis of insitu and exsitu contributions. Technovation 32(7–8):419–429CrossRefGoogle Scholar
  13. Gallouj F, Savona M (2009) Innovation in services: a review of the debate and a research agenda. J Evol Econ 19(2):149–172CrossRefGoogle Scholar
  14. Gianiodis P, Ellis SC, Secchi E (2010) Advancing a typology of open innovation. Int J Innovat Manag 14(4):531–572CrossRefGoogle Scholar
  15. Grönroos C (1990) Service management and marketing: managing the moments of truth in service competition. Lexington Books, LexingtonGoogle Scholar
  16. Grönroos C, Voima P (2013) Critical service logic: making sense of value creation and co-creation. J Acad Market Sci 41(2):133–150CrossRefGoogle Scholar
  17. Guba EG (1981) Criteria for assessing the trustworthiness of naturalistic inquiries. Educ Comm Tech J 29(2):75–91Google Scholar
  18. Guba EG, Lincoln YS (1994) Competing Paradigms in Qualitative Research. In: Denzin NK, Lincoln YS (eds) Handbook of qualitative research. Sage, Thousand Oaks, pp 105–117Google Scholar
  19. Holbrook MB (1999) Introduction to consumer value. In: Holbrook MB (ed) Consumer value: a framework for analysis and research. Routledge, LondonCrossRefGoogle Scholar
  20. Hopkins MM, Tidd J, Nightingale P, Miller R (2011) Generative and degenerative interactions: positive and negative dynamics of open, user-centric innovation in technology and engineering consultancies. R&D Manage 41(1):44–60CrossRefGoogle Scholar
  21. Hsieh K-N, Tidd J (2012) Open versus closed new service development. Technovation 32(11):600–608CrossRefGoogle Scholar
  22. Katz ML, Shapiro C (1985) Network externalities, competition, and compatibility. Am Econ Rev 75(3):424–440Google Scholar
  23. Katz ML, Shapiro C (1994) Systems competition and network effects. Am Econ Rev 8(2):93–115Google Scholar
  24. Kaulio MA (1998) Customer, consumer and user involvement in product development: a framework and a review of selected methods. Total Qual Manage 9(1):141–149CrossRefGoogle Scholar
  25. Lane D, Maxfield R (1996) Strategy under complexity: fostering generative relationships. Long Range Plan 29(2):215–231CrossRefGoogle Scholar
  26. Lusch RF, Vargo SL, O’Brien M (2007) Competing through service: insights from service-dominant logic. J Retail 83(1):5–18CrossRefGoogle Scholar
  27. Mustak M, Jaakkola E, Halinen A (2013) Customer participation and value creation: a systematic review and research implications. Manage Serv Qual 23(4)Google Scholar
  28. Nijssen EJ, Hillebrand B, Vermeulen PAM, Kemp RGM (2006) Exploring product and service innovation similarities and differences. Int J Res Market 23(3):241–251CrossRefGoogle Scholar
  29. Remneland-Wikhamn B, Ljungberg M, Bergqvist M, Kuschel J (2011) Open innovation, generativity and the supplier as peer. Int J Innovat Manage 15(1):205–230CrossRefGoogle Scholar
  30. Rubalcaba L, Michel S, Sundbo J, Brown SW, Reynoso J (2012) Shaping, organizing, and rethinking service innovation: a multidimensional framework. J Serv Manage 23(5):696–715CrossRefGoogle Scholar
  31. Russo-Spena T, Mele C (2012) “Five co-s” in innovating: a practice based view. J Serv Manage 23(4):527–553CrossRefGoogle Scholar
  32. Schembri S (2006) Rationalizing service logic, or understanding services as experience? Market Theor 6(3):381–392CrossRefGoogle Scholar
  33. Schumpeter J (1934) The theory of economic development. Harvard University Press, CambridgeGoogle Scholar
  34. Stake RE (1995) The art of case study research. Sage, Thousand OaksGoogle Scholar
  35. Sundbo J (1997) Management of innovation in services. Serv Indust J 17(3):432–455CrossRefGoogle Scholar
  36. Sundbo J, Toivonen M (2011) Introduction. In: Sundbo J, Toivonen M (eds) User-based innovation in services. Edward Elgar, Cheltenham, pp 1–21CrossRefGoogle Scholar
  37. Swan J, Scarborough H (2005) The politics of networked innovation. Hum Relat 58(7):913–943CrossRefGoogle Scholar
  38. Toivonen M (2010) Different types of innovation processes in services and their organisational implications. In: Gallouj F, Djellal F (eds) The Handbook of innovation and services. Edward Elgar, Cheltenham, pp 221–249Google Scholar
  39. Toivonen M, Tuominen T (2009) Emergence of innovations in services. Serv Indust J 29(7):887–902CrossRefGoogle Scholar
  40. Tse E (2002) Grabber-holder dynamics and network effects in technology innovation. J Econ Dynam Contr 26(9–10):1721–1738MathSciNetCrossRefGoogle Scholar
  41. Vargo SL (2009) Toward a transcending conceptualization of relationship: a service-dominant logic perspective. J Bus Ind Market 24(5/6):373–379CrossRefGoogle Scholar
  42. Vargo SL (2013) Service-dominant logic reframes (service) innovation. In: Isomursu M, Toivonen M, Kokkala M, Pussinen P (eds) Highlights in service research, VTT Research highlights 6. Espoo, Finland, VTT Technical Research Centre of Finland, pp 7–11Google Scholar
  43. Vargo SL, Lusch RF (2004) Evolving to a new dominant logic for marketing. J Market 86(1):1–17CrossRefGoogle Scholar
  44. Vargo SL, Lusch RF (2008) Service-dominant logic: continuing the evolution. J Acad Market Sci 1(36):1–10CrossRefGoogle Scholar
  45. von Hippel E (1988) The sources of innovation. Oxford University Press, New YorkGoogle Scholar
  46. von Hippel E (2005) Democratizing innovation. The MIT Press, CambridgeGoogle Scholar
  47. von Wright GH (1963) The varieties of goodness. Routledge, LondonGoogle Scholar
  48. Westerlund M, Leminen S (2011) Managing the challenges of becoming an open innovation company: experiences from living labs. Tech Innovat Manage Rev October:19–25Google Scholar
  49. Yin RK (2003) Case study research: design and methods, 3rd edn. Sage, Thousand OaksGoogle Scholar

Copyright information

© Springer-Verlag London 2015

Authors and Affiliations

  1. 1.VTT Technical Research Centre of FinlandEspooFinland

Personalised recommendations