Value cocreation at its peak: the asymmetric relationship between coproduction and loyalty

Purpose - Coproduction, as one component of cocreation of value, offers many benefits to customers and management, but also requires customers to invest a considerable amount of effort and time. The purpose of this paper is to investigate the coproduction paradox of benefits and costs. Design/methodology/approach - One experimental study and two cross-sectional field studies across three service industries test the nonlinear relationship between level of coproduction and customer loyalty. Findings - Results show not only the optimum level but also the negative effects of increasing levels of coproduction on customer loyalty and, in turn, monetary expenditures. The negative effect can be partially offset by perceived process enjoyment (PE), such that consumers who enjoy the process exhibit increased loyalty after the optimum coproduction point. Customer self-efficacy (SE), however, further strengthens the inverted u-shaped relationship. Research limitations/implications - Further research should try to replicate the findings in more complex and less hedonic service settings (e.g. financial investments) because both PE and SE might be even more powerful here. Practical implications - Service managers need to determine the optimal degree to which customers want to engage in the creation of services and avoid overburdening them. Management should further explore opportunities to elicit feelings of fun and enjoyment through coproduction. Originality/value - Research usually highlights the potential benefits of coproduction for customers and companies and suggests a positive linear relationship between coproduction and success outcomes. This article instead shows that after an optimum level, the marginal benefits of coproduction for customer loyalty turn negative.