Revealing business customers’ hidden value formation in service

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Purpose
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/approach
This 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.

Findings
The 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/implications
Although 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 implications
Understanding a customer’s value formation from the customer’s point of view is the key to service development for any business service provider.

Originality/value
Applying 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.
Original languageEnglish
Peer-reviewed scientific journalJournal of Business & Industrial Marketing
Volume34
Issue number6
Pages (from-to)1145-1159
Number of pages15
ISSN0885-8624
DOIs
Publication statusPublished - 2019
MoE publication typeA1 Journal article - refereed

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Keywords

  • 512 Business and Management
  • Value
  • Service marketing
  • Logic
  • Customer orientation
  • Business-to-business marketing

Areas of Strength and Areas of High Potential (AoS and AoHP) MANDATORY FIELD

  • AoS: Competition economics and service strategy - Service and customer-oriented management

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