The influence of customer involvement and engagement on co-creation of services, satisfaction, and loyalty: The case of Software as a Service

Software as a digital product has been shown to improve companies' performance and efficiency. One product that is now at the core of many businesses is Software as a Service (SaaS). By utilizing cloud computing platforms, SaaS is a method of provid-ing applications as a service. SaaS applications have unique characteristics that can be customized to meet customers' needs. Hence, SaaS has become suitable for companies of all types and sizes, including small-and medium-sized enterprises. The purpose of this study is to examine the effect of customer involvement on the development of SaaS applications and the impact of customer engagement on the co-creation of ser-vices, satisfaction, and loyalty, with the co-creation level used as a moderating variable. Data were collected from responses to an online questionnaire by 282 users of a SaaS application in Indonesia who were the decision-makers of the selected SaaS provider. The data were then analyzed using structural equation modeling. The results show that customer involvement in developing SaaS applications significantly positively affects the co-creation of services, satisfaction, and loyalty (t-value > 1.645). Moreover, the level of co-creation was proven to strengthen the impact of customer involvement on the co-creation of services with an interaction Standardize Loading Factor (SLF) path of 1.36. Hence, the findings indicate that higher customer involvement promotes col-laborative activities with service providers, and the optimum level of co-creation raises customer satisfaction.