How Coproduction Motives Shape Customer Relationships
How Coproduction Motives Shape Customer Relationships
About the Research
How Attributions of Coproduction Motives Shape Customer Relationships Overtime
Journal of the Academy of Marketing Science (JAMS), 2023; Volume 51, Issue 4
Authors:
Pascal Güntürkün
Till Haumann
Laura Marie Edinger-Schons
Jan Wieseke
In today’s business landscape, many companies are adopting coproduction strategies, where customers actively participate in producing goods or services. Examples include self-checkout at retail stores, assembling furniture at home, or using unassisted check-in systems at airports. While these approaches can enhance efficiency and reduce costs for companies, their impact on customer relationships is complex and varies over time.
This research explores how customers perceive the motives behind coproduction—whether they see it as serving the firm’s interests (like cutting costs) or genuinely benefiting the customer (like offering convenience or customization). The study finds that customers often attribute mixed motives to these strategies, which can significantly influence their satisfaction and spending behavior over time.
The researchers conducted two qualitative pre-studies and three quantitative studies to test the hypotheses. The pre-studies offered insights into firm- and customer-serving motive attributions in various coproduction contexts. Study 1, a longitudinal field study, investigated how these attributions affected customer satisfaction and willingness to pay over time. It also validated the downstream effects with objective customer spending data and tested the inference model based on customer participation. Study 2, an experiment, manipulated coproduction intensity, design freedom, and monetary savings to provide causal evidence on firm motive inferences and their effects on customer outcomes. Study 3, a field study, validated the findings across different firms.
Key findings from the report found that:
Customer-Serving Motives: Initially, when customers believe coproduction is designed to meet their needs, it leads to higher satisfaction and a greater willingness to pay. However, these positive effects tend to diminish over time.
Firm-Serving Motives: On the other hand, if customers perceive coproduction as a way for the company to reduce its costs at their expense, the negative effects on satisfaction and willingness to pay are more stable and long-lasting.
From a managerial perspective, these insights suggest that companies need to carefully design coproduction strategies to balance customer participation and perceived benefits. Firms should be aware that while coproduction might offer short-term gains, poorly designed initiatives could harm customer relationships in the long run.
By understanding the dynamics of how customers infer motives and their evolving perceptions, companies can create more effective coproduction models that build stronger, longer-lasting customer relationships.
From the Authors
How and to what extent may an industry benefit from this research?
How might, for example, a retailer that aims to implement self-service checkouts benefit from these findings?
First, our research shows that customers are very sensitive to how the benefits of a coproduction concept are distributed between the firm and its customers, as they attribute about customer- and firm-serving motives based on their experiences with the co-production concept. These attributions then have important short- and long-term implications for customer relationship development: While attributions of customer-serving firm motives have positive short-term effects, the negative effects of firm-serving motive attributions are temporally more persistent over time.
This implies that the retail management should carefully evaluate all benefits and drawbacks of the new self-service checkout for both customers and the own organization. They should also gather external feedback on this evaluation because managers tend to overestimate the benefits of coproduction for their customers. If the firm benefits overweigh the customer benefits in the final evaluation, this should raise a red flag as implementing such a concept bears the risk of damaging profitable customer relationships over time. Thus, to avoid implementing a concept that customers perceive to be driven more by firm- rather than customer-serving interests, it would be advisable to test new concepts on a small scale and closely listen to customers’ feedback rather than releasing a concept in a large national rollout after which any changes are more expensive.
Second, our studies provide managerial insights into how characteristics of a coproduction concept that are under managerial control (i.e., coproduction intensity, design freedom, monetary savings) influence customer attributions of coproduction motives and thereby help managers to design better coproduction concepts. Whereas lower coproduction intensity (time and effort investments required by customers), more design freedom (e.g., customization options), and higher monetary incentives elevate attributions of customer-serving motives, higher intensity, lower design freedom, and less monetary savings reduce attributions of firm-serving motives.
A retailer benefits from these insights, by learning which key characteristics of coproduction concepts drive customers’ attributions of firm motives. It offers insights into potential trade-offs between these factors that managers can use to improve the design of their coproduction concept. Ultimately, these insights will help them to design better concepts that will result in more positive customer relationships over time.
How can the recommendations from your findings specifically be implemented?
Managers need to carefully weigh firm and customer benefits when designing coproduction concepts. They should use market research to test how customers perceive their concepts. They should be careful with overemphasizing customer benefits when they are really focusing more on firm benefits and think of potential compensation strategies for coproduction concepts that demand high effort from customers. These could be either monetary benefits for customers (e.g., lower prices) or more options to customize the design, features, etc. of the outcome product/service.
