Exploring the Role of Customer Participation in Service Development

Licentiate thesis, 2026

This thesis examines the role of customer participation in service development and the implications for management within the empirical context of the Swedish energy sector. As services expand and firms pursue servitization and digital innovation, customer participation becomes central yet challenging to manage. Recent studies have shown that excessive or misaligned customer participation may have negative consequences such as reduced efficiency. Service-dominant logic provides a useful perspective for studying participation, as it frames customers as active co-creators of value in use rather than treating them as passive recipients. Despite growing interest in customer co-creation and the possibilities of advancing service innovation and development through new technology, there is limited empirical evidence of how to balance participation across basic and advanced service offerings. There is a need to examine how co-creation strategies such as technology-enabled participation influence service innovation, and development outcomes, particularly in the energy sector. For energy companies, there is a need to improve energy efficiency and societal value while maintaining a profitable business model, a challenge which requires further research. As the sector faces growing complexity, volatile energy prices, rapid technological change, and climate change, interest in energy services has increased among both customers and providers. In addition, by focusing on a traditional service industry, the study generates contextual insights into participation and service development, a topic which remains underexplored.

This licentiate thesis adopts a qualitative approach to explore customer participation in service development. Based on the Swedish energy industry, empirical findings demonstrate how customer participation across various service types differ and how they shape service advancement and service designs. The results offer insight into how to manage different trade offs between competing factors concerning participation and service advancement. This can be particularly useful for understanding how firms in traditional service industries can balance efficiency and effectiveness for various actors through improved and balanced service designs. This thesis integrates research in customer participation with studies of servitization and service modularity to bring forward new, multidisciplinary perspectives to address challenges and identify opportunities for service development and management. The results highlight the need for increased theoretical and practical understanding of the role of customer participation and the implications for service development and management.