How a customer participates matters: “I am producing” versus “I am designing”

Purpose – This paper aims to conceptually and empirically differentiate between two types of customer participation (CP): CP as “producers” (CPP), when customers primarily contribute physical labor to produce a service (e.g. assembling a frame), and CP as “designers” (CPD), when customers primarily share information to design a service (e.g. designing a frame). The study examines whether CPD and CPP influence customers’ perceptions of value creation and choice of participation differently. Furthermore, it investigates the moderating effect of customer expectation on the effect of CPD/CPP on customers’ participation responses. Design/methodology/approach – This study uses two scenario-based experiments. Study 1 examines the main effect of CPP and CPD on perceived value of participation and participation choice, and Study 2 investigates the moderator of customer expectation. Findings – Study 1 indicates that CPD creates greater value and is a more preferred participation choice than CPP. Study 2 further suggests that the differential advantage of CPD over CPP becomes weakened with a CPP expectation and amplified with a CPD expectation. Research limitations/implications – This research helps reconcile current mixed empirical findings in the literature and opens up a new stream to enrich the theoretical understanding of CP. Its use of consumer psychology theories also adds a consumer psychological perspective to CP research. Practical implications – This research demonstrates that not all CPs are equal, offers guidelines to design and manage CP and suggests managing customer expectations so as to enhance the appeal of CPP in light of its productivity implications. Originality/value – This study represents a pioneering work to empirically differentiate two types of CP and offers a new perspective for understanding the complexity of CP.