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 space called Tech Café where customers share design ideas (including detailed engineering drawings) for customizing and improving motorcycles; some of the suggestions have been incorporated into Ducati’s next generation of products. Similar mechanisms have been employed by Hallmark Cards Inc. and other companies to get customers to conceptualize products and channel ideas into the product development pipeline.

Product Designer

Customers can also be product designers and design their own versions of the “ideal” product using virtual prototyping tools and design tool kits provided in the VCE.5 For example, Bayerische Motoren Werke AG has operated its Customer Innovation Lab by giving customers online design tools to develop their own ideas (particularly related to telematics and driver-assistance systems). Similarly, both French automaker PSA Peugeot Citroën S.A. and D. Swarovski & Co., an Austrian producer of crystal, have employed such design tools to facilitate customer design efforts.

Product Tester

The application of virtual product technologies has also been extended to engage the customer in product testing. For example, both Volvo and Audi AG have implemented virtual reality tools to involve customers in product concept testing.

Product Support Specialist

Perhaps the most common role for customers is supporting other customers as product support specialists. This allows them to leverage their product-related knowledge and expertise to extend support to peers.6 Technology companies such as HP, Novell, Cisco and Microsoft have been at the forefront of this area. Further, industry organizations such as the San Carlos, California-based Consortium for Service Innovation have been pursuing projects focused on enhancing the customer’s role in product support through the innovative application of knowledge-based tools and technologies in VCEs.7

Product Marketer

Some companies have also leveraged the expertise of customers in product marketing activities carried out in VCEs. They are able to pass along information about new products and shape peer perceptions through dialogue and discussions. Further, VCEs provide an effective venue in which customers may learn about new products. Both Korea’s Samsung Group and Japan’s Suzuki Motor Corp., for example, have experimented with virtual product launch centers that employ interactive product simulation technologies and, in the process, engage customers in product marketing.8

Individually, each of the customer roles has a lot to offer to companies. However, some roles have more relevance to some companies than to others. In fact, most companies pursue VCE initiatives that are focused on a single role. For example, while Microsoft’s Most Valuable Professional program concentrates primarily on product support activities, Ducati’s Tech Café focuses mainly on developing product concepts. Depending on the customer innovation role, the nature of the customer interactions and the technologies used in the VCE will vary — and thus the nature of customers’ experience in the virtual environment will vary as well. However, before we relate the customer role to the experience, we need to define customers’ VCE experience.

The Customer Experience

The customer experience in a VCE is made up of four components: pragmatic experience, sociability experience, usability experience and hedonic experience.9 These components reflect three underlying contextual characteristics: Customer interactions involve product-related knowledge; they occur in a social or community context; and they are facilitated or mediated by different types of information technologies.10

Pragmatic Experience

Most customers who visit or participate in VCEs do so to acquire information about a product, its underlying technologies or its usage. The pragmatic component relates to customers’ experience in realizing such product-related informational goals in the VCE (for example, their perception of the quality of information acquisition processes). Note that there are multiple ways for customers to achieve such goals — interacting with peer customers and company representatives, searching product knowledge centers or experimenting with product prototyping tools — and depending on their approach, their pragmatic experiences would vary.

Sociability Experience

Interactions in a VCE often enable customers to perceive themselves as members of a group or community, and the underlying social and relational aspects of such interactions form the sociability experience of the customer. Thus, the sociability component emphasizes the importance of community dialogue and the social policies (or rules of engagement) that frame such dialogue. The promotion of a shared social or community identity in VCEs has been shown to contribute to positive sociability experience. As one customer commented, “I really like the camaraderie and the shared understanding that has evolved over here [in the VCE] and the constant give-and-take with these folks has led to some very interesting experiences for me.”11

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