As part of my Masters of Applied Science in Technology Innovation Management, we were regularly asked questions about the use of technology. This is the response to one of the questions.

Q: Is the best motivation for involving customers or virtual user communities into product development to give monetary rewards in exchange of their use experiences and knowledge? 

Many will agree with the statement that customers must have incentives to innovate and communicate about innovations within the community (Smith et al., 2013). This essay seeks to determine whether the statement “the best motivation for involving customers or virtual user communities into product development is to give monetary rewards in exchange of their use experiences and knowledge” is accurate.


Motivation is a theoretical construct used to explain behaviour. It is one of the few psychological concepts to have been fully adopted by popular culture (Meyer & Mahr, 1997); however, there is a fierce debate over the exact definition of motivation in academia, which has lasted over 60 years (Kleinginna & Kleinginna, 1981). Most discussions of motivation assume a stable set of individual needs and values; these are seen as shaping expectations, goals, and attitudes. The two primary types of motivation described in the literature are extrinsic and intrinsic motivation: intrinsic is internal (within the individual) while extrinsic motivation is external (outside the individual) (Leimeister et al., 2009; Hossain, 2012). Extrinsic motives, such as peer recognition, and intrinsic motives, such as fun, curiosity, or support for others, can both play valuable roles in encouraging participation (Smith et al., 2013).

Types of Motivation

Lack of motivation from a knowledge contributor impedes knowledge sharing. Under such circumstances, social capital becomes critical because the resources inherent in the online social network mediate between the individuals and hence foster their intention and activeness to perform this voluntary behaviour (Ardichvili et al., 2003). In short, customers expect a considerable return for their participation in exchange for their considerable engagement and time investments (Harhoff et al., 2003).  It is easy to focus on the more tangible form of motivation – extrinsic motivation – particularly when it can be viewed as a simple equation (“do this, get that”). However, Smith et al. (2013) note that most customers typically do not receive financial payment. Adding a financial reward may decrease interaction intensity and creativity (Franke & Shah, 2003). Indeed, a group of studies shows that when people are offered a reward for doing a task that involves some degree of creativity or problem solving—or for doing it well—they will tend to do lower quality work than those offered no reward (Kohn, 1999). Osterloh and Frey’s (2000) research on intrinsic and extrinsic motivation for knowledge sharing suggests that intrinsic motives are much more powerful than are extrinsic (e.g., monetary or administrative) stimuli. The research of Chiu, Hsu, & Wang (2006) concluded that social interaction ties, reciprocity, and identification increased individuals’ quantity of knowledge sharing but not knowledge quality.

Building a Vibrant Community

The posting of knowledge entries by users into product development communities represent only one side of the equation: the supply of new knowledge.  For a community to be vibrant, there should be also active participation on the demand side: the organization acknowledging the supply of new knowledge and eliciting more (Cross, Bogatti, & Parker, 2001). Ardichvili et al. (2003) argue that a requirement for a successful virtual community is the members’ (or employees’) willingness to use the community as a source of new knowledge.  These two major requirements (willingness to share knowledge and willingness to use the virtual community as a source of knowledge) apply to any community of practice, be it face-to-face or virtual (Ardichvili et al., 2003). Their study dealt with online communities of practice and they found it is necessary to add one more requirement: for a virtual community to be successful, its members need to be comfortable with participating in a computer-mediated, Internet-based community of practice, which involves very little face-to-face communication (Ardichvili et al., 2003).

In summary, the best motivation for involving customers or virtual user communities into product development is not monetary rewards; this approach may be counterproductive, reducing the intensity, creativity, and quality of the input. The literature suggests that the best motivation for involving customers or virtual user communities is to engage the user in a two-way conversation, build on social capital, and provide peer recognition.

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