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Revealing business customers’ hidden value formation in service

Revealing business customers’ hidden value formation in service This paper aims to identify how, in contrast to a provider-oriented stance where customer value is conceptualised as being controlled by the provider, customer value is formed for business customers beyond what is visible to the provider.Design/methodology/approachThis paper builds on the primacy of the customer. Customer-dominant logic (CDL) is used as the conceptual underpinning, meaning that the customer, rather than the service provider or the service system, is at the centre. A case study was conducted with seven key users from three customer companies of an information and communications technology (ICT) provider of in-house services. The study used a micro-social level focus by capturing customers’ experiences of those activities where value in use is formed.FindingsThe findings indicate that value formation is not related only to direct service interactions and furthermore substantially takes place beyond a service provider’s visibility line. Hence, value formation is in large part hidden for the service provider because it is embedded in customers’ activities and experiences.Research limitations/implicationsAlthough the study is limited to one case concerning ICT services, these findings may apply to other service businesses, in particular to knowledge-intensive outsourcing businesses.Practical implicationsUnderstanding a customer’s value formation from the customer’s point of view is the key to service development for any business service provider.Originality/valueApplying a CDL approach, the authors deepen the understanding of customer value formation as it emerges in customer activities. The study provides detailed insight into business customers’ value formation processes. The study’s findings challenge the current emphasis on interactions and co-creation and instead demonstrate the importance of understanding customer logics and contexts. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Business & Industrial Marketing Emerald Publishing

Revealing business customers’ hidden value formation in service

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0885-8624
DOI
10.1108/jbim-11-2017-0259
Publisher site
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Abstract

This paper aims to identify how, in contrast to a provider-oriented stance where customer value is conceptualised as being controlled by the provider, customer value is formed for business customers beyond what is visible to the provider.Design/methodology/approachThis paper builds on the primacy of the customer. Customer-dominant logic (CDL) is used as the conceptual underpinning, meaning that the customer, rather than the service provider or the service system, is at the centre. A case study was conducted with seven key users from three customer companies of an information and communications technology (ICT) provider of in-house services. The study used a micro-social level focus by capturing customers’ experiences of those activities where value in use is formed.FindingsThe findings indicate that value formation is not related only to direct service interactions and furthermore substantially takes place beyond a service provider’s visibility line. Hence, value formation is in large part hidden for the service provider because it is embedded in customers’ activities and experiences.Research limitations/implicationsAlthough the study is limited to one case concerning ICT services, these findings may apply to other service businesses, in particular to knowledge-intensive outsourcing businesses.Practical implicationsUnderstanding a customer’s value formation from the customer’s point of view is the key to service development for any business service provider.Originality/valueApplying a CDL approach, the authors deepen the understanding of customer value formation as it emerges in customer activities. The study provides detailed insight into business customers’ value formation processes. The study’s findings challenge the current emphasis on interactions and co-creation and instead demonstrate the importance of understanding customer logics and contexts.

Journal

Journal of Business & Industrial Marketing – Emerald Publishing

Published: Oct 7, 2019

Keywords: Value; Service marketing; Logic; Customer orientation; Business-to-business marketing

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