The Importance Of Customer Co-Creation

Customer engagement also encompasses customer co-creation. Many organizations view CE as a route for creating and enhancing the value co-created in customer-firm relationships— thereby improving business performance. Moreover, managers seek to foster favorable CE—that is, managers understand that organizations should co-create value with customers as part of a dynamic CE process.

According to Lusch and Vargo (2006, p. 284), customer co-creation ‘‘involves the (customer) participation in the creation of the core offering itself. It can occur through shared inventiveness, co-design, or shared production of related goods.’’ Thus, co-creation occurs when the customer participates through spontaneous, discretionary behaviors that uniquely customize

(2010) posit that customer engagement consists of five dimensions. First, customer engagement can be expressed in different ways depending on the customer’s resources (e.g. time). Second, it can result in different types of outcomes for the customer (e.g. improvements in the service). Third, it can vary in scope and be momentary, such as issuing a complaint, or ongoing behavior. Fourth, it has varying impact on the firm and peers (negative/positive), and, fifth, customers may engage in the behaviors for different purposes. Customers engage in a number of behaviors that strengthen their relationship with the brand, which go beyond the traditional customer loyalty measures, such as frequency of visits, purchasing behavior, and intended behaviors (Gummerus,

Kumar et al., (2010) identified four customer engagement metrics/ values which include customer lifetime value (the customer’s purchase behavior), customer referral value (as it relates to incentivized referral of new customers), customer influencer value (which includes the customer’s behavior to influence other customers, that is increasing acquisition, retention and share of wallet through word of mouth activity of existing customers as well as prospects), and customer knowledge value (the value added to the firm by feedback from the customer). CEV provides a comprehensive framework that can ultimately lead to more efficient marketing strategies than enable higher long-term contribution from the customer (Kumar et al.,