Recent developments in marketing highlight the blurring of boundaries between firms and customers. The concept of customer engagement aggregates the multiple ways customer behaviors beyond transactions may influence the firm. However, the term is embryonic and academics and practitioners alike lack understanding on how customer engagement contributes to value co-creation. This paper marks the first attempt to conceptualize the role of customer engagement behavior (CEB) in value co-creation within a multi-stakeholder service system. We combine the theoretical perspectives of customer engagement and value co-creation research to the analysis of a rich case study of a public transport service system involving consumers, communities, businesses, and governmental organizations. Our findings describe drivers for CEB, identify four types of CEB, and explore the value outcomes experienced by various stakeholders. This paper proposes that CEB affects value co-creation by virtue of customers’ diverse resource contributions towards the focal firm and/other stakeholders that modify and/or augment the offering, and/or affect other stakeholders’ perceptions, preferences, expectations or actions towards the firm or its offering. Through inducing broader resource integration, CEB makes value co-creation a system level process. We offer nine research propositions explicating the connections CEB has to value co-creation by focal customers, the focal firm and other stakeholders. Our research suggests that firms focus greater attention on the resources that customers can contribute, explore the potential to engage diverse stakeholders around a common cause and employ organically emerging systems which provide opportunities for more extensive value co-creation.
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