The Paradox of Tie Strength in Customer Relationships for Innovation: A Longitudinal Case Study in the Sports Industry
Tobias Fredberg and Frank T. Piller
Vol. 41, No. 5, pp. 470–484, November 2011
Published by Social Science Research Network
Current literature argues that firms should have strong ties to customers to benefit from increased customer retention and loyalty. Strong ties, however, have also been shown to prevent innovation, suggesting that firms should also develop weak ties to other customer groups. This paper focuses on the potential for strong ties to facilitate, rather than prohibit, innovation. It is based in a seven year longitudinal research project with Adidas, a global sporting goods company. From the case, we find that the paradox of tie strength results from an overly simplified view of the nature of company-customer relationships. Contrary to the established literature, we find that strong ties in the Adidas case supported significant innovation. In fact, the involvement resulted in the development of a new product with a radically different product architecture and led to one of the most successful product launches in the company’s history. To explain these findings, we introduce the nature of customer participation in a firm’s value creation processes as a new dimension of the constitution of firm-customer ties and discuss how such a kind of relationship can develop.