Creative Customers as Source of Innovation- a theoretical Review Abstract

Anahita Bagherzad Halimi
Graduate School of Business Administration

University of Verona,

Via dell'Artigliere, 19 - 37129 Verona

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Creative Customers as Source of Innovation- A Theoretical Review
Abstract

Realizing the entire customers’ needs is mostly a costly and inexact procedure. Moreover, even if customers know exactly what they need, they might not be able to easily convey it to manufacturers. Nowadays due to rapid rate of market and technological changes, the cost of understanding and properly responding to customers’ needs is increasing. In the course of studying product innovation, prior studies on user innovation argue that users have the knowledge and motivation to fulfil their own needs by innovating themselves. These needs might have been neglected by manufacturers or they might have been costly to be discovered. Empirical researches on sources of innovation have found that, most of the times, consumers are generally the initial developers of products in compare to manufacturers. Therefore, today, companies do not need to put so much effort to recognize exactly their customers’ needs. They have instead equipped their customers with proper tools which enable them to design and develop their own products. Providing these “user friendly” tools, makes the product development process more rapid and less expensive. Prior literature on innovation realizes customers as an imperative source of ideas. This study is a review on what motivates consumers to innovate, how manufacturers can benefit from customers innovation as a resource to create value and how they can prepare the tools, processes and policies which enable the customers to innovate.

Key words: User innovation, Creative customers, source of innovation, Value creation
Introduction

User innovators are firms or individual consumers that gain advantage from products which they develop. Nowadays, managers and scientist well realized that there are several industrial and consumer products developed by users. They recognize these users are the source of innovation. Although these users usually improve innovation at private cost, they share it for free. While users develop the innovation and improve a product, there are two ways to deliver these innovations. One of them is through peer-to-peer channels in which, innovation is delivered for free, and the other one is through market channels in which the innovation has a price. Innovative users openly disclose their innovations to competing users and manufacturers. Therefore, rival users will be able to imitate the innovation in-house and thus take advantage of it. Manufacturers will be also able to process the innovation and then put it up for sale to all users; this is the same also for competitors of the user who developed the innovation. Regardless of all traditional belief, studies regarding the sources of innovation in both industrial and consumer products illustrated that users rather than manufacturers are mostly the primary developers of new products. Innovations developed by users are most of the time commercially interested (e.g., Franke et al., 2006; von Hippel, 2005). Therefore, user innovators may decide to deliver their innovation to a manufacturer which is able to use it in new product development process (von Hippel et al., 1999). Here, the user innovator still remains as a user, or the user innovator may decide to commercialize the innovation by him/herself in the market and turn into a manufacturer (Baldwin et al., 2006; Haefliger et al., 2010; Shah and Tripsas, 2007). Therefore, although there are limited relations between manufacturer and user innovator, an enduring and close relationship is plausible between them. This provides the chance for both manufacturers to deliver new products to the market and lead users to benefits from improved commercial products. But it should be noticed that commercializing and selling user innovations in the market, risks loosing the competitive advantage that the user business could achieve from the innovation.

Empirical research has now recognized that many of the innovative products are actually developed, tested and improved by “lead users.” Users have regularly tendency to innovate with the purpose of solving their own, ahead-of-market needs. Then, manufacturers who realize the innovation turn it to commercially-attractive products. They adopt these innovations and learn from their innovative users. Manufacturers use their user’s efforts as significant complementarity to their own product development and commercialization processes.
End users may work individually or in groups in order to develop consumer products which would be commercialized and sold in the markets by manufacturers. User innovation networks can work and innovate independent from manufacturers if firstly there are some users which have adequate motivation to innovate, secondly some users are motivated to voluntarily disclose their innovations, and finally this disclosure of innovations has low cost and can be converted into commercial products. Even with the only first two conditions, a process including user innovation, trial and development within user networks and then commercial manufacture and distribution of innovations take place.
Current literature concentrated a lot on the role of end users as a source of innovative new products. Scholars have studied user innovation broadly, and there is an extensive literature regarding this topic. Therefore, this study would be a rather brief overview concentrating on what is known regarding user innovations. In writing this article, some main journals which investigate the source of innovation and publications in the field of management as well as technology have been reviewed.

Literature Review
Creative Users as Source of Innovation

As discussed before, growing attention has been paid to the role of the end users in innovation development. Kline and Rosenberg (1986) “chain linked model” of the innovation development, with feedback rounds connecting the market, innovation, design, improvement and marketing activities, perfectly illustrates the potential value of end user knowledge as an important factor in the innovation activities. Current studies on user innovation concentrates on the significant role of users in innovation activities, especially when all the activities including sometimes the manufacturing, distributing, and marketing is performed by end users. Mostly the literature on user innovation intends to identify the incentives that encourage users to innovate (Riggs and Von Hippel 1994; Shah 2006), the special type of available information to them (von Hippel 1986; Luthje et al. 2005), and the cost of passing that information to producers, its determinants and influences (von Hippel 1988). Some studies, for instance, argued that user innovators are enthused to innovate by several factors other than financial reasons, for example by their needs and desires, career opportunities or reputational benefits, willingness to build a social identity, or even by their interests and hobbies (Shah 2006). Although users innovate in order to fulfil their own particular needs, companies and producers’ aim is to develop and commercialize new products in the markets (von Hippel 2005). Users might be more interested in technical elegance or building new product feature and functions rather than commercial viability. Users innovate mostly to fulfil their personal needs that companies were not able to predict or have been ignored perceiving lack of demand, or needs which have not been realized how to be addressed. Therefore, reasons for innovation are different in users and manufacturers and these distinctions in incentives between users and manufacturers is the main factor clarifying the reason that user inventions have characteristics different from innovation by manufacturers.

Besides, the origin of user innovations is from local knowledge that differs from manufacturers. The users’ local knowledge is different from the knowledge manufacturers use to innovate. Despite users, manufacturers are able to take advantage of in-house technical know-how, organizational capabilities, and complementary assets (von Hippel 2005; Lettl et al. 2006). As an alternative, users’ knowledge comes from their use of a particular product concentrating their personal needs. Therefore, there would be also significant distinctions between the outputs of users and manufacturers.
Users might develop either minor improvements or radical breakthrough innovations. Von Hippel’s (1970s) was the first who realized the critical role of users as innovators. Based on his studies, users rather than manufacturers can be the main source of innovation. Prior literature realized two major types of user-innovators. Intermediate users such as companies which utilize the tools and components from producers to make their products and consumer and users who are the final consumer of the products.
The Role of Creative Users on Technological Development

Based on the knowledge-based theory of the firm, companies promote knowledge formation and innovation (Nickerson and Zenger 2004; Macher 2006). Previous studies on firms’ innovation argued that companies’ inventions have superior technical significance than innovation by users as firm governance sets a better management of the knowledge required for invention, and makes the coordination and adaptation needed for successful search available for novel inventions. On the other hand, some studies argue that companies might not posses such an advantage comparing to users in improving innovations of high technological significance.

It has been also discussed that companies have willing to keep on performing local search for product developments in areas greatly associated with their own accumulated knowledge rather than seeking for innovative ideas in novel areas (Rosenkopf and Nerkar 2001). Although users have also willingness for local search, they have different implications as they hold different accumulated knowledge. Manufacturers’ local knowledge means information related to accumulated knowledge and preceding R&D, in contrast, users’ local knowledge relates to their experiences from their own use which might be the only source of knowledge they use (Luthje et al. 2005). Therefore, companies’ inventions might be more incremental, whereas users’ inventions might provide more new solutions to problems.
In their study, Riggs and von Hippel (1994) argued that users developed a huge percentage of new peoducts (44%), and these innovations have usually superior scientific significance than companies’ innovations. On the other hand, companies’ innovations might hold higher commercial significance. According to previous studies, these differences are due to considerations regarding expected benefits in users and firms. As a result, when users’ incentive for innovation might be peer recognition or feeling of achievement, companies seek profits. Therefore, difference in motivations creates a variety of innovative outcomes. Both sources of innovation present ideas that are significant for different causes either scientific or commercial. As users test the product by themselves in such conditions that are usually hard to be duplicated within firms’ R&D activities, they mostly obtain “sticky” information (Shah 2000) so, they are more able to realize other users needs and desires. Especially when customer needs alter significantly every often, (Tripsas 2008), this make it difficult for companies to anticipate their customers’ future needs, predominantly when there are potential customers which are not within the current customer set. Whereas users as consumers of the products which are also close to other consumers are more able to anticipate future needs (Riggs and Von Hippel 1994). This motivates companies to invest in innovations by users which help them to obtain future market value (Schmookler 1966, Mansfield 1968). Because of this early recognition, user inventors are able to realize market opportunities earlier than companies.
Nowadays, studies on user innovators could be found in areas such as firm boundaries, innovation communities, and entrepreneurship (Baldwin, Hienerth, & von Hippel, 2006; Shah & Tripsas, 2007; von Hippel, 2005).
Although transferring a consumer’s new idea regarding existing products into a novel design might not be always easily possible and protecting these ideas with patenting and copyright is so costly, there are still some motivations for consumers to participate in innovative activities.
Motivations of Creative Users for Innovation

The fact that prior review documented the importance of user innovators as sources of innovation motivated scholars to study the reason why these users intend to innovate. Many studies have previously discussed about the intrinsic (e.g. feeling of enjoyment, exploration and creativity) and extrinsic (e.g. monetary incentives, social motives, Expectation of recognition or altruistic motives) incentives that motivate user innovators to get involved in innovation activities. To avoid repetition, this study tries to have a holistic overview regarding innovative users’ motivation; therefore, it doesn’t go into details.

There are two conceivable explanations for user innovations: one is the innovation-related costs, and the second one is expected benefits to users.
Innovation Related Costs

Sticky knowledge involves combination of technical information containing the solution with information about user needs and transferring this combination into new products desired by customers. According to traditional innovation models, the knowledge regarding customers’ needs and desires is created by the user site, whereas the information about the solutions comes from producer site that investigates information regarding user needs in order to translate it into the new products.

Based on Von Hippel (1994) study, users might get more involved in innovative activities in compare to producers if the information regarding user needs is sticky meaning that it is costly to transfer. This counts on the tacitness of the information to be transferred, the quantity of information to be transferred, as well as the absorptive capacities of the information (Cohen & Levinthal, 1990; Rosenberg, 1982). Moreover, stickiness describes usually the origin of innovation. Ogawa (1998) argued that users innovate more if knowledge regarding users’ needs and desires is sticky rather than when they hold technical information.
Innovation Related Benefits

Despite the fact that sticky information discussions describe the reason that the user site is unique concerning the local knowledge, von Hippel (2005) study also added up that both producer and user who anticipate a high level of benefit from innovation will turn out to be the innovator; therefore, the innovation benefit determines the locus of innovation. Based on his study, users develop different and functionally new innovations as they obtain benefit from utilizing the innovation taking advantage of different knowledge base. To maintain the fact that users’ needs and inducements to get involved in innovate activities are different from those of manufacturers, Riggs and von Hippel (1994) realized that users are more probable to become innovate if they expect more benefits from their innovation in compare to manufacturers. Innovative users are lead users, either intermediate or consumers, who are able to realize some needs that ordinary users may identify it later in future. Lead users tendency is to benefit from fulfilling these needs early (von Hippel, 2005).

Further Benefits for User Innovators

In addition to benefit of using an innovation which is an encourage to innovate, there are also some user innovators who have the tendency to acquire benefit from commercializing their own innovations (Foxall & Tierney, 1984; Lee, 1996). Therefore, users might also become entrepreneurs (Shah & Tripsas, 2007). For user entrepreneurship it is important to obtain a proper intellectual property to protect their inventions (Harhoff et al., 2003). Additionally, recent studies have also discovered another benefit from user innovations which relates to the process of innovation not the innovation outcome, and it is when users get pleasure from the process of problem solving (Lüthje, 2004; von Hippel, 2005). Another benefit for innovating users is obtaining career opportunities, for instance, through creating reputation among the peers (Lakhani & von Hippel, 2003; Lerner & Tirole, 2002). There is a growing interest in studding the incentives which promote user innovations in many different fields (e.g., Benkler, 2006; Franke & Shah, 2003).

To sum up, it can be argued that consumers turn out to be innovators when:

• 
  They have an incentive for participation.
  

For example, when innovative customers receive appreciation from companies, or when they find themselves distinguished among peers, they get more motivations to participate. Computer gamers enjoy their participation when they realize that their skills are recognised by their peers.

• 
  They have the capabilities, skills as well as necessary tools.
  

In addition to necessary capabilities and skills, companies should provide user friendly tools for their customers to make their customers’ participation easier innovative activities; otherwise innovation will tend to be limited to professionals.

• 
  They have low-cost laboratories and equipments available for them.
  

Firms should provide some innovation facilities in order to make the User innovation participation as cheap as possible. They can do this by allowing the customers’ access to the laboratories with adequate equipments which let the customer to tests and experiments.

• 
  They have capability to transfer their ideas.
  

As also discussed before, the process of transferring users’ knowledge into a product development process is not an easy task but it is still possible. Firms should realize how to prepare appropriate situation for customers in order to facilitate this process.
When all or some of these conditions take place, some customers may not remain only users of products and they turn out to be innovators as participation and innovation gets easier and less costly. Therefore, customers can be considered as valuable source of novel ideas. The traditional innovation models are not able to explain this phenomenon while the customer becomes both producer and consumer (innovator and user).
Innovative Users as Important Source of Innovation for Firms

After realizing that users might be the sources of innovation, von Hippel (1978) presented a novel approach called “customer-active paradigm” in innovation. According to his approach, customer creates some novel ideas regarding the product, and then intends to deliver it to an attracted producer (de Jong & von Hippel, 2009). He perceived CAP as being more properly matched to the industrial innovation process in compare to the “manufacturer-active paradigm”. Many studies intended to develop CAP by recognizing users as entrepreneurs which sell their innovative products in addition to innovating role of users (Foxall & Tierney, 1984).

Manufacturers can get innovative users more involved in the innovation process by taking advantage of lead users which hold essential information regarding both customers’ needs and solutions obtaining from customers in the target market as well as customers in other markets which might have identical needs (e.g., Lilien, Morrison, Searls, Sonnack, & von Hippel, 2002). They can also take advantage of lead users in order to build up breakthrough products with higher performance and also expand their marketplace (cf. Lüthje & Herstatt, 2004; von Hippel, 2005).
Some studies have also investigated to understand the ways in which companies can make users more active contributors in innovation process for example as co-producers, service providers, and generally create more value (Buur & Matthews, 2008). Heterogeneity in needs and desires as well as users’ tendency to pay to obtain their precisely desired product (Franke & von Hippel, 2003) enables them to effectively contribute in the innovation process as they are more capable of adjusting the products according to their needs. Consequently, dedicating certain innovative task to them, rather than just seeking to obtain need-related knowledge from them would be even more beneficial (von Hippel, 1994). Co-creation allows users to freely experience and create platforms in order to do collaborative activities (Jeppesen & Frederiksen, 2006) applying proper “toolkits” for innovation (von Hippel & Katz, 2002). On the other hand, emergence of internet also left some opportunities for users to get involve into innovation activities (Piller & Walcher, 2006; Sawhney, Verona, & Prandelli, 2005). Many studies realized innovation as a cooperative process between companies and users (e.g., Jensen, Johnson, Lorenz & Lundvall, 2007; Lundvall, 1988).
Innovation by users affects the interaction between users and manufacturers, concerning that a technological change even influence the boundary of firms (Afuah, 2001). Besides, as discussed before, the stickiness or tacitness of the knowledge creates difficulties for both parties to deliver their knowledge to each other (Ogawa, 1998; von Hippel, 1994) and innovation is a trial and error process (von Hippel, 2005) which mostly entail both suppliers and users of technology (von Hippel & Tyre, 1995). Consequently, it is necessary for companies to provide tools to recognize the precise needs of their users, and realize the solutions users apply to fulfil their needs which are all significant information for the knowledge boundaries of the companies ( Brusoni, Prencipe, & Pavitt, 2001; von Hippel & Katz, 2002).
Obtaining Value from Innovative User’s knowledge and Novel Ideas

There are many studies exploring the way producers can profit from user innovations. Studding the process by which companies can profit from users as innovators describes also the producers’ capabilities in responding to external technological changes (Hill & Rothaermel, 2003). Today, scholars and managers intend to realize how innovation by users contributes to the firm’s complementary assets, for example distribution channels, and complementary information (Teece, 1986). Moreover, previous studies proved the value of complementary assets for manufacturers and the impacts they have on incumbents to maintain after innovation changes (Tripsas, 1997).

Providing quick responses to customers’ evolving needs is a difficult task for manufacturers. They should realize the customers’ precise needs and desires through the R&D process. Therefore, it is crucial for companies to apply more effective innovation activities. Moreover, the firms’ limited budget as well as internal R&D costs forced manufacturers to put more efforts to better use the external innovation sources. Taking into account these limitations for firms, and considering this fact that 85% of the total cost of new product development relates to the early phase of the innovation process (Buergel and Zeller, 1997; Herstatt and Verworn, 2002), managers should make appropriate investments in the early phase of innovation process in order to lead the total value of innovation activities to market needs. Consequently, applying the customers’ knowledge from very early R&D practices in order to assure the accuracy of new product developed is very important and beneficial for companies.
Many scholars argued that if firms want to decrease their risk of failures and utilize their resources more accurately, they should combine their main NPD activities with contribution of their customers (Kohli and Jaworski, 1990; Biemans, 1991, Murphy and Kumar, 1997). Customers’ contribution into the innovation process is not a new subject and it was greatly discussed during the 1980s, however, it got new considerations while moving towards a novel concept in innovation called open innovation (Chesbrough, 2003).
The concept of open innovation argues that stakeholders as external source of information outside the firm hold some useful innovative knowledge and ideas which companies should realize and properly apply them in their innovation processes. This notion has become more and more important recently.
Nowadays, companies understood that applying the innovative knowledge and capabilities of their customers, suppliers, as well as other resources of information into their innovation process from very beginning phase of innovation would improve their productivity and performance ( Muller and Välikangas, 2002; Rigby and Zook, 2002; Chesbrough, 2003; Gassmann et al., 2004). Companies are seeking new approaches to manage their innovation activities and redesign to open up their boundaries to other sources of innovation in order to take advantage of them in their innovation processes.
According to previous studies, creative consumers innovate, because they might either benefit from their innovation creating new functionality or novel applications for existing products, or they might participate in innovative activities just because they enjoy the adventure and challenges of new experiences. They usually do not like simply buying and obeying the normal use of products. They also cannot ignore the problems with product deficiencies. They are mostly curios to participate and solve these problems. Although realizing creative consumers might be a complicated process, companies’ reaction in terms of attitude and action towards innovative customers contribute to determine the formulation of appropriate strategy. Prior researches recommended firms to be aware, analyze, and respond properly.
Unfortunately there are still some firms which are not aware of innovative customers that develop their products. Despite the fact that the emergence of Internet decreased the level of unawareness, it is still common among many firms. Therefore, managers should be first of all aware of the existence of such customers. Creative customers enjoy being known and appreciated for their innovative ideas and their efforts.
Creative Users Contribution to New Product Development

Many studies realized customers’ knowledge and capabilities as an important external source for NPD in theory and in practice (Freeman, 1991; von Hippel, 1988). Many of them illustrated that customer participation in NPD improves the product effectiveness in term of being more fitted to the market. Customers may create ideas for potential business opportunities (Alam, 2006; Bilgram et al., 2008; von Hippel, 1986). Users’ participation in innovation processes can also decrease the obstacles to adopt novel innovations (e.g. Alam, 2006) it may also provide more capabilities for companies to obtain some benefits in their marketing activities and in developing a more successful customer relationship (Gruen et al., 2005). As illustrated in the following figure, Koen et al., (2002) introduced three stages for innovation process: the Fuzzy Front End (FFE), the New Product Development (NPD) and commercialization.

Figure 1: three phases of innovation (Kohen et.al., 2002)

Turning Customers into Innovators

As discussed before, customers’ knowledge and innovative ideas may be of great value for manufacturers since they are not only important sources of novel information regarding customer needs but also provide novel approaches to fulfil these needs that might have not been realized by companies (von Hippel 1994). Therefore, firms have tendency to motivate their customers to get more involved in innovation activities. In order to do so firms should also facilitate the customers’ participation. Here there are some recommendations based on prior studies.

• 
  Firms should provide user-friendly tool kits for their customers in order to let trial and error experiments more easily, frequently and efficiently. The technology should facilitate the customers’ adaptation to these tool kits and the adaptation should not be costly for customers. The tool kit should also have a standard design to let customers generate multifaceted custom designs quickly.
  
• 
  Firms should redesign their production processes to enhance flexibility in order to make the customer innovative development processes faster and less costly.
  
• 
  Firms should keep on developing their tool kits every often in order to persuade innovative users. Customers desire for improvements in tool kits. Investing in these improvements is beneficial for firms as what the market needs tomorrow is what innovative user desires today.
  
• 
  Firms should adapt their business practices to profit from the user innovators in their innovation processes; for example, make an economically feasible condition to work with a few number customers which have innovative ideas.
  

Unfortunately, many companies might be risk averse in applying lead user innovations usually because they have not flexible innovation processes, they do not consider the user innovators’ contribution to their success, and they might be worried about extension new markets. However, while the process of product and service development becomes more complex and dynamic, firms intend more to seek for external resources to reduce the risk of failure in adopting new technologies.
Firms’ Reaction towards Creative Customers

Firms might behave differently towards creative consumers which have willing to innovate. As discussed before, some consider creative customers as threats to their business; therefore, they attempt to avoid customers’ involvement into their innovation processes as well as product development. On the other hand, some firms consider creative customers as valuable source of knowledge; consequently, they try to facilitate consumers’ participation in their innovative activities. Prior studies considered two axes concerning companies’ reaction towards creative customers. One of the axes illustrates the firm’s attitude towards innovative customers which is a company’s strategy regarding creative customers which might be positive or negative, and the second axe shows their action towards innovative customers and it is when a company realize innovative customers, how they act. Firms might act actively or passively towards their creative customers. These two axes describe four types of reaction from companies facing creative customers. Therefore, according to their reaction, they are categorized as discouraging, resisting, encouraging, and enabling.

Discussion and Conclusion

Although in traditional business models, companies mostly paid a little attention towards the phenomenon of innovative users, it is no longer the case in recent business models. Creative customers are significant source of innovative developments in many industries. Therefore, companies should become aware of their creative customers, analyze their contribution into their innovative processes, and then plan proper strategies to take more advantage of this valuable source of knowledge. Since companies possess different situational factors, and have a variety of offerings and strategies, therefore, their reactions towards creative customers would be also different. Consequently, managers should realize that creative users exist, and if they want to obtain benefits and achieve value from the customers’ knowledge and innovative ideas, they have to arrange proper strategies consistent with their situation and policy towards the paradigm of innovations by users. By the way, since there are always evolutions in technology, markets, and consumers, there might be also change in companies’ reaction towards this phenomenon. In order to react properly towards the threats and opportunities of creative consumers, companies should be able to manage precise reactions towards creative consumers; promote the customers’ related capabilities and desire to adapt, modify, and renovate their products; and finally improve their aptitude to search, track, and direct innovations by customers.

Companies that are capable of arranging the integration of customers’ knowledge into their own innovation process and accept creative consumers’ collaborations and participations will obtain an optimal innovation and marketing competence. Firms can prepare a situation which maintains the continuous successful cooperation and co-developments. Even in cases that producers do not possess adequate incentives to innovate or when they think of innovation as being risky as being complicated to realize the consumers’ precise needs and desires, users might be the single source of innovation. User innovations fill up this gap between the user and the producer leading to reduction in uncertainty and risk of innovation.
Owing to the declines in expenditures of technology, cheaper communications, and higher educational achievements, more creative people become capable to get involved in innovative activities than before. Nowadays, customers do not want to remain passive and they prefer to participate in innovative developments. They want something more than being a chooser. They look for tools to help them develop products based on their needs. Therefore, as customers are a valuable source of creativity, firms should renovate their innovation policy in order to be able to combine the knowledge of user innovators into the internal R & D to achieve more success.
Today, neither companies nor customers desire mass, passive consumerism. Manufacturers and their customers want a society full of creativity including contributors, adapters, participants, designers with customers attempting to provide firms with innovative ideas.
Limitations

This paper is a precise review on the literature regarding innovative customers and their contribution in companies’ innovative activities. Although this research was carefully prepared, there might still be some limitations. First of all, the short period of time creates some shortcomings for every study. Eight weeks is not adequate to evaluate and analyze a great number of journals and paper studies related to the topic. Secondly, there is still a lack of enough literature and empirical studies regarding how these creative customers can really perform as source of innovation and how their creativity can become a useful practical product. This can bring new opportunities for researchers and scholars to put more time and efforts to better study investigate the issue.

Further Research

Although a review on prior literatures offers considerable number of studies regarding creative customers and their contribution to companies’ innovative activities, a little amount of studies have been found to explore and analyze the ways companies can realize creative customers and take advantage of them. Therefore, while important issues such as recognizing innovative customers and encouraging them to participate in innovative activities plays important role to improve companies’ performance, the issue still suffers from lack of enough investigations. Moreover, future studies would be necessary to give adequate understanding regarding methods to realize and make proper connections with innovative customers and find effective motivations to encourage them for more participation. These studies should answer some questions such as how much participation of innovative users is necessary in development activities?, How much technology supports and what kind of structure is needed for better collaborations between company and innovative customer?, How to create essential conditions to facilitate their better participation?. Finally, it is also necessary for future researchers to devote some funding to design required infrastructures and software to support innovative customers’ involvement in innovative activities. All these questions and many other practical study suggestions wait for future empirical analyzing and investigations.

Managerial Implications

This study highlights the fact that managers should go beyond conventional management techniques in order to improve their firm’s innovation processes. Managers should make strategic decisions on when and how to take advantage of creative customers’ knowledge, capabilities and novel ideas in their business activities to maximize the amount of benefits they can acquire. They should also decide on proper strategies regarding their reaction towards users’ innovation. On the other hand, managers should realize which kind of incentives motivates their creative customers to better get involved in the innovation activities of the company based on the type of business, customer and industry characteristics.

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  Anahita H. Bagherzad graduated in Master of Business Administration from Multimedia University in Malaysia. She is a PhD student in graduate school of Business Administration, Verona University.