How Do Others Feel about a Co-innovation Service Provider? The Effect of Co-innovation on Non-participating Customers

Customer engagement in service innovation is becoming an effective strategy. A large amount of previous literature has shown that this kind of co-innovation will influence the relationship between engaged customers and service providers. However, there is little literature has considered the influence of co-innovation on those consumers who don´t participate in the innovation but know the co-innovation mode of a firm. This article use experiments to explore how nonparticipating customers feel about the co-innovation service provider. We find that when the service experience is good, those customers like co-innovation service providers more than the traditional service providers whose service is designed by its employees. But when the service experience is not good enough, customers´ preference reverses. Although customers dislike co-innovation mode when the service experience is not good, they tend to accept the bad results and complain less (vs. Traditional innovation mode) to the firm.