In recent years, many well-known companies, including Microsoft, Cisco, Nokia, Volvo and Nike, have forged closer links with customers in the areas of innovation and value creation by establishing technology-based customer forums. These forums, known as virtual customer environments, range from simple online discussion groups to more sophisticated product prototyping centers.1 In many cases, companies incorporate organizational mechanisms to integrate customer innovation roles with internal product development systems and processes.

The benefits of engaging customers in product design and development, product support and other related activities are increasingly visible. By interacting with customers, for example, Nokia Corp. has been able to tap into innovative design concepts. Similarly, AB Volvo has been able to accelerate product development by involving customers in virtual product concept tests. Microsoft Corp., meantime, has realized considerable savings by embracing “expert” customers as partners in providing product support services to other customers.2 Such advantages, combined with the availability of powerful and inexpensive information technologies, help explain the rapid growth of VCE initiatives in both the United States and Europe.

Our research indicates that VCE initiatives can offer important (and often hidden) benefits beyond the innovation outcomes. (See “About the Research.”) Specifically, customer interactions in VCEs can shape their relationships with the company as well as with the product or brand. Yet many companies treat their virtual environments strictly as an innovation platform and pay limited attention to other issues. We think that companies that ignore the broader impact of the customer’s experience are overlooking an important dimension — something that they may not realize until it is too late.3

Managers can benefit by developing a more thorough understanding of the nature of customers’ experiences in a VCE and the implications for both innovation and customer relationship management. We offer a framework to evaluate customers’ VCE experience profile and suggest a set of strategies and practices to promote appropriate customer experiences. To understand the experiences, let’s examine the roles they play in the VCE.

Customer Roles in Virtual Customer Environments

Virtual customer environments can be designed to support five different customer roles in innovation and value cocreation: product conceptualizer, product designer, product tester, product support specialist and product marketer.4(See “The Types of Virtual Customer Environments.”)

Product Conceptualizer

Companies can encourage customers to inter-actamongthemselvestogenerateandadvanceproductimprovement and new product ideas. For example, Ducati Motor Holding S.p.A., the Italian motorcycle company, has implemented a virtual