The contradictory effects of customer participation breadth and depth on customer-perceived value

Abstract

PurposeThe purpose of this study is to investigate whether two different participation strategies (i.e. deep participation and broad participation) in a supplier’s product development process will result in different levels of customer-perceived value. In addition, this paper examines the moderating effects of customer risk-aversion and technology turbulence on the relationship between customer participation depth/breadth and customer-perceived value.Design/methodology/approachA theory-based model is developed and tested using data collected from 196 business-to-business firms. A multiple-regression approach was used to test the hypotheses.FindingsDrawing on the transaction cost theory, the results reveal that while deep participation is likely to result in increased customer-perceived value, broad participation may hurt the relationship performance by reducing customer-perceived value. Moreover, the findings suggest that these effects are contingent on at least two contextual factors: how risk-averse the customer is and how turbulent the technological environment is.Originality/valueThis study is among the first to disaggregate the customer participation process into two different strategies, namely, deep participation and broad participation. It also extends the current literature by providing more insights about the dynamics involved in the customer participation process.