This study found that customer-driven innovation is becoming increasingly more essential in today‘s competitive marketplace. In recent past, it was always company performing innovations for the customers. But we found that customer is and will be primary source of innovation during the next several decades. Therefore, we explored that customer-driven innovation is become more beneficial than older paradigms of innovation in both academia and industry. The comparison of theory and practice helped us to identify that ―increase customer satisfaction is most vital motive for company to cooperate with customers during idea generation stage of product and service innovation. This study found that ―reduction of market uncertainties is most important benefit for company to gain from involving customers during ideation process of products and service innovation. It was identified that self-image and need a solution are most significant motives for customers to cooperate with company during idea generation stage. Similarly, we found that cognitive or learning benefits is most common customer benefit gained from cooperation.