Two forms of customer involvement and new product development performance in the digital context: The moderating role of new product development stage

Abstract

Customer involvement plays a critical role in firms' new product development (NPD), especially in the digital context. Prior research has distinguished between two forms of customer involvement: customers as an information source (CIS) and customers as co-developers (CIC). We build on this stream of literature and investigate the impact of CIS and CIC on firms’ NPD performance in the digital context by considering both the benefits and costs of these two forms of customer involvement. Furthermore, we explore the moderating role of NPD stage. Based on survey data collected from 263 informants, we show that whereas CIS has a positive effect on NPD performance, CIC has an inverted U-shaped relationship with NPD performance. More interestingly, the positive relationship between CIS and NPD performance is more pronounced in the ideation stage than in the product development stage, and the inverted U-shaped relationship between CIC and NPD performance is steeper in the product development stage than that in the ideation stage. In our additional analyses, we further divide the NPD stage into four stages and found similar results as our main analyses. Our study enriches the customer involvement literature and offers practical implications regarding whether, how, and when to involve customers in the NPD process.