Beyond Customer Knowledge Management

In the knowledge-based economy, the value of products and services largely depends on the knowledge intangibles they embed (Drucker, 1993). The success of firms is increasingly becoming linked to the intellectual capital they are able to accumulate and re-invest in their markets (Davenport & Prusak, 1998; Nahapiet & Ghoshal, 1998; Sullivan, 1998). In this age of knowledge-based business, it is incumbent upon firms to pay increasing attention to the development of customer knowledge (Balasubramanian et al., 1998; Sawhney & Kotler, 1999). However, researchers in marketing have generally assumed that knowledge creation happens only within the firm’s boundaries or, at the most, within the strategic alliances among firms. We argue that in the knowledge economy we need to move beyond this perspective of the firm as the knowledge creator that learns about customers and creates value for them, to a perspective of the firm as a co-creator of knowledge that learns and creates value with its customers. As already argued only in service marketing literature, customers are a vital source of knowledge and hence competitive advantage. The cooperation with them gives firms the opportunity to renew the source of their competitive advantage constantly. This is significant in a business landscape where unique and lasting competitive advantages are increasingly rare. Through co-operation with their customers, firms can better anticipate market changes (Anderson & Narus, 1991; Nonaka & Takeuchi, 1995), catalyze their innovation processes (von Hippel, 1982, 1986, 1994), and better respond to latent customer needs (Leonard & Rayport, 1997).