Customer Needing - Conceptualising Industrial Service from a Customer Perspective

Views on industrial service have conceptually progressed from the output of the provider’s production process to the result of an interaction process in which the customer also is involved. Although there are attempts to be customer-oriented, especially when the focus is on solutions, an industrial company’s offering combining goods and services is inherently seller-oriented. There is, however, a need to go beyond the current literature and company practices. We propose that what is needed is a genuinely customer-based parallel concept to offering that takes the customer’s view and put forward a new concept labelled customer needing. A needing is based on the customer’s mental model of their business and strategies which will affect priorities, decisions, and actions. A needing can be modelled as a configuration of three dimensions containing six functions that create realised value for the customer. These dimensions and functions can be used to describe needings which represent starting points for sellers’ creation of successful offerings. When offerings match needings over time the seller should have the potential to form and sustain successful buyer relationships.

Value Creation in Professional Service Processes. Propositions for Understanding Financial Value from a Customer Perspective

Many service management studies have suggested that service providers benefit from having long-term relationships with customers, but the argument from a customer perspective has been vague. However, especially in the business-to-business context, an analysis of financial value creation seems appropriate also from a customer perspective. Hence, the aim of this study is to develop a framework for understanding monetary value creation in professional service assignments from a customer perspective. The contribution of this study is an improved insight and framework for understanding financial value creation from a customer perspective in a professional service delivery process. The sources for monetary differences between transactional and long-term service providers are identified and quantified in case settings. This study contributes to the existing literature in service and relationship management by extending the customer’s viewpoint from perceived value to measurable monetary value. The contribution to the professional services lies in the process focus as opposed to the outcome focus, which is often accentuated in the existing professional services literature. The findings from the qualitative data suggest that a customer company may benefit from having an improved understanding of the service delivery (service assignment) process and the factors affecting the monetary value creation during the process. It is suggested that long-term relationships with service providers create financial value in the case settings in the short term. The findings also indicate that by using the improved understanding, a customer company can make more informed decisions when selecting a service provider for a specific assignment. Mirel Leino is associated with CERS, the Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration

Understanding Customer Loyalty and Disloyalty The Effect of Loyalty-Supporting and -Repressing Factors (first edition sold out, 'print on demand' 60 €)

Customer loyalty has been a central topic of both marketing theory and practice for several decades. Customer disloyalty, or relationship ending, has received much less attention. Despite the close relation between customer loyalty and disloyalty, they have rarely been addressed in the same study. The thesis bridges this gap by focusing on both loyal and disloyal customers and the factors characterising them. Based on a qualitative study of loyal and disloyal bank customers in the Finnish retail banking market, both factors that are common to the groups and factors that differentiate between them are identified. A conceptual framework of factors that affect customer loyalty or disloyalty is developed and used to analyse the empirical data. According to the framework, customers’ loyalty status (behavioural and attitudinal loyalty) is influenced by positive, loyalty-supporting, and negative, loyalty-repressing factors. Loyalty-supporting factors either promote customer dedication, making the customer want to remain loyal, or act as constraints, hindering the customer from switching. Among the loyalty-repressing factors it is especially important to identify those that act as triggers of disloyal behaviour, making customers switch service providers. The framework further suggests that by identifying the sources of loyalty-supporting and -repressing factors (the environment, the provider, the customer, the provider-customer interaction, or the core service) one can determine which factors are within the control of the service provider. Attitudinal loyalty is approached through a customer’s “feeling of loyalty”, as described by customers both orally and graphically. By combining the graphs with behavioural loyalty, seven customer groups are identified: Stable Loyals, Rescued Loyals, Loyals at Risk, Positive Disloyals, Healing Disloyals, Fading Disloyals, and Abrupt Disloyals. The framework and models of the thesis can be used to analyse factors that affect customer loyalty and disloyalty in different service contexts. Since the empirical study was carried out in a retail bank setting, the thesis has managerial relevance especially for banks. Christina Nordman is associated with CERS, Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration. The doctoral thesis is part of the Göran Collert Research Project in Customer Relationships and Retail Banking and has been funded by The Göran Collert Foundation.

The Nature of Learning about Customers in a Customer Service Setting - A Study of Frontline Contact Persons

The starting point of this thesis is the notion that in order for organisations to understand what customers value and how customers experience service, they need to learn about customers. The first and perhaps most important link in an organisation-wide learning process directed at customers is the frontline contact person. Service- and sales organisations can only learn about customers if the individual frontline contact persons learn about customers. Even though it is commonly recognised that learning about customers is the basis for an organisation’s success, few contributions within marketing investigate the fundamental nature of the phenomenon as it occurs in everyday customer service. Thus, what learning about customers is and how it takes place in a customer-service setting is an issue that is neglected in marketing research. In order to explore these questions, this thesis presents a socio-cultural approach to understanding learning about customers. Hence, instead of considering learning equal to cognitive processes in the mind of the frontline contact person or learning as equal to organisational information processing, the interactive, communication-based, socio-cultural aspect of learning about customers is brought to the fore. Consequently, the theoretical basis of the study can be found both in socio-cultural and practice-oriented lines of reasoning, as well as in the fields of service- and relationship marketing. As it is argued that learning about customers is an integrated part of everyday practices, it is also clear that it should be studied in a naturalistic and holistic way as it occurs in a customer-service setting. This calls for an ethnographic research approach, which involves direct, first-hand experience of the research setting during an extended period of time. Hence, the empirical study employs participant observations, informal discussions and interviews among car salespersons and service advisors at a car retailing company. Finally, as a synthesis of theoretically and empirically gained understanding, a set of concepts are developed and they are integrated into a socio-cultural model of learning about customers.

Customer Value of Website Communication in Business-to-business Relationships

During past years, we have witnessed the widespread use of websites in communication in business-to-business relationships. If developed appropriately, such communication can result in numerous positive implications for business relationships, amplifying the importance of designing website communication that meet customer needs. In doing that, an understanding of value of website communication for customers is crucial. The study develops a theoretical framework of customer value of website communication in business-to-business relationships. Theoretically, the study builds on the interaction approach to industrial marketing, different approaches to customer value and inter-organisational communication theory. The empirical part involves a case study with a seller and nine different customer companies in the elevator industry. The data collection encompasses interviews and observations of representatives from the customer companies, interviews with the seller and an analysis of various reports of the seller. The continuous iteration between the theory and the case study resulted in the integrated approach to customer value and in the holistic theoretical framework of customer value of website communication in business-to-business relationships. The framework incorporates and elicits meanings of different components of customer value: website communication characteristics that act as drivers of customer value, customer consequences – both benefits and sacrifices, customer end-states as the final goals that lead customer actions, and different types of linkages between these components. Compared to extant research on customer value, the study offers a more holistic framework of customer value that depicts its complexity and richness. In addition, it portrays customer value in the neglected context of website communication. The findings of the study can be used as tools in any analysis of customer value. They are also of relevance in designing appropriate website communication as well as in developing effective website communication strategies. Nataša Golik Klanac is associated with the Centre for Relationship Marketing and Service Management (CERS) at Hanken.

Customer Value Formation in Practice: A Practice-Theoretical Approach

This thesis introduces a practice-theoretical approach to understanding customer value formation to be used in the field of service marketing and management. In contrast to current studies trying to understand value formation by analysing customers as independent actors and thinkers, it is in this work suggested that customer value formation can be better understood by analysing how value is formed in the practices and contexts of the customers. The theoretical approach developed in this thesis is applied in an empirical study of family cruises. The theoretical analysis in this thesis results in a new approach for understanding customer value formation. Customer value is, according to this new approach, something that is formed in practice, meaning that value is formed in constellations of the customer and contextual elements like tools, physical spaces and contextually embedded images and know-how. This view is different from the current views that tend to see value as subjectively created, co-created, perceived or experienced by the customer. The new approach has implications on how we view customer value, but also on the methods and techniques we can use to understand customer value in empirical studies. It is also suggested that services could in fact be reconceptualised as practices. According to the stance presented in this thesis the empirical analysis of customer value should not focus on individual customers, but should instead take the contextual entity of practices as its unit of analysis. Therefore, ethnography is chosen as a method for exploring how customer value is formed in practice in the case of family cruises on a specific cruise vessel. The researcher has studied six families, as well as the context of the cruise vessel with various techniques including non-participant observation, participant observation and interviews in order to create an ethnographic understanding of the practices carried out on board. Twenty-one different practices are reported and discussed in order to provide necessary insight to customer value formation that can be used as input for service development.

Time and Location as Customer Perceived Value Drivers

Since the emergence of service marketing, the focus of service research has evolved. Currently the focus of research is shifting towards value co-created by the customer. Consequently, value creation is increasingly less fixed to a specific time or location controlled by the service provider. However, present service management models, although acknowledging customer participation and accessibility, have not considered the role of the empowered customer who may perform the service at various locations and time frames. The present study expands this scope and provides a framework for exploring customer perceived value from a temporal and spatial perspective. The framework is used to understand and analyse customer perceived value and to explore customer value profiles. It is proposed that customer perceived value can be conceptualised as a function of technical, functional, temporal and spatial value dimensions. These dimensions are suggested to have value-increasing and value-decreasing facets. This conceptualisation is empirically explored in an online banking context and it is shown that time and location are more important value dimensions relative to the technical and functional dimensions. The findings demonstrate that time and location are important not only in terms of having the possibility to choose when and where the service is performed. Customers also value an efficient and optimised use of time and a private and customised service location. The study demonstrates that time and location are not external elements that form the service context, but service value dimensions, in addition to the technical and functional dimensions. This thesis contributes to existing service management research through its framework for understanding temporal and spatial dimensions of perceived value. Practical implications of the study are that time and location need to be considered as service design elements in order to differentiate the service from other services and create additional value for customers. Also, because of increased customer control and the importance of time and location, it is increasingly relevant for service providers to provide a facilitating arena for customers to create value, rather than trying to control the value creation process. Kristina Heinonen is associated with CERS, the Center for Relationship Marketing and Service Management at the Swedish School of Economics and Business Administration

Relationship Drivers in Provider - Consumer Relationships. Empirical Studies of Customer Loyalty Programs (första upplagan slutsåld / first edition sold out, 'print on demand' 60 €)

The study addressed a phenomenon that has become common marketing practice, customer loyalty programs. Although a common type of consumer relationship, there is limited knowledge of its nature. The purpose of the study was to create structured understanding of the nature of customer relationships from both the provider’s and the consumer’s viewpoints by studying relationship drivers and proposing the concept of relational motivation as a provider of a common framework for the analysis of these views. The theoretical exploration focused on reasons for engaging in customer relationships for both the consumer and the provider. The themes of buying behaviour, industrial and network marketing and relationship marketing, as well as the concepts of a customer relationship, customer loyalty, relationship conditions, relational benefits, bonds and commitment were explored and combined in a new way. Concepts from the study of business-to-business relationships were brought over and their power in explaining the nature of consumer relationships examined. The study provided a comprehensive picture of loyalty programs, which is an important contribution to the academic as well as the managerial discussions. The consumer study provided deep insights into the nature of customer relationships. The study provides a new frame of reference to support the existing concepts of loyalty and commitment with the introduction of the relationship driver and relational motivation concepts. The result is a novel view of the nature of customer relationships that creates new understanding of the forces leading to loyal behaviour and commitment. The study concludes with managerial implications.

Customer asset management in action: using customers portfolio for allocating resources across business-to-business relationships for improved shareholder value

Suvi Nenonen Customer asset management in action: using customer portfolios for allocating resources across business-to-business relationships for improved shareholder value Customers are crucial assets to all firms as customers are the ultimate source of all cash flows. Regardless this financial importance of customer relationships, for decades there has been a lack of suitable frameworks explaining how customer relationships contribute to the firm financial performance and how this contribution can be actively managed. In order to facilitate a better understanding of the customer asset, contemporary marketing has investigated the use of financial theories and asset management practices in the customer relationship context. Building on this, marketing academics have promoted the customer lifetime value concept as a solution for valuating and managing customer relationships for optimal financial outcomes. However, the empirical investigation of customer asset management lags behind the conceptual development steps taken. Additionally, the practitioners have not embraced the use of customer lifetime value in guiding managerial decisions - especially in the business-to-business context. The thesis points out that there are fundamental differences between customer relationships and investment instruments as investment targets, effectively eliminating the possibility to use financial theories in a customer relationships context or to optimize the customer base as a single investment portfolio. As an alternative, the thesis proposes the use of customer portfolio approach for allocating resources across the customer base for improved shareholder value. In the customer portfolio approach, the customer base of a firm is divided into multiple portfolios based on customer relationships’ potential to contribute to the shareholder value creation. After this, customer management concepts are tailored to each customer portfolio, designed to improve the shareholder value in their own respect. Therefore, effective customer asset management with the customer portfolio approach necessitates that firms are able to manage multiple parallel customer management concepts, or business models, simultaneously. The thesis is one of the first empirical studies on customer asset management, bringing empirical evidence from multiple business-to-business case studies on how customer portfolio models can be formed, how customer portfolios can be managed, and how customer asset management has contributed to the firm financial performance.

Fading Customer Relationships

This dissertation is based on the assumption that fading customer relationships are important phenomena to understand in order for companies to prevent a future relationship termination, manage a desired relationship termination, or manage the situation where the relationship strength temporarily or permanently has weakened but where the customer still stays with the same service provider. It is assumed that fading could take different forms and develop through a range of different processes. The purpose of the thesis is therefore to define and describe fading, reveal different types of fading relationship processes, and discuss the dynamics of these processes. In services literature there is a lack of research focusing on the weakening of customer relationships. Fading therefore represents a new approach to understanding issues related to the ending of customer relationships. A fading relationship process could precede a relationship ending, but could also represent a temporal weakening of the relationship without leading to termination. It thus distinguishes the concept from other concepts within ending research which focus solely on relationships that have been terminated, taking a larger aspect of the relationship into account (as a relationship could build on constant changes). A pilot study created an understanding of difficulties related to understanding and detecting fading customer relationship, which led to a follow-up study incorporating qualitative interviews in relationship dyads characterised as fading with both private banking customers and their respective financial advisor. The focus remained on the understanding of the fading process resulting in a model for analysing different types of fading processes. Four types of fading processes were also revealed; the crash landing process, the altitude drop process, the fizzle out process and the try out process. The dissertation contributes to a broadened understanding of different types of fading processes within the research area of ending relationships emphasising the dynamic aspects of the phenomenon. Managerial implications include the management of different types of fading processes and also the understanding of the financial advisor’s role in influencing the development of these processes. Helena Åkerlund is associated with CERS, the Centre for Relationship Marketing and Service Management at Hanken, Swedish School of Economics and Business Administration, Helsinki

Customer asset management in action: using customers portfolio for allocating resources across business-to-business relationships for improved shareholder value

Suvi Nenonen Customer asset management in action: using customer portfolios for allocating resources across business-to-business relationships for improved shareholder value Customers are crucial assets to all firms as customers are the ultimate source of all cash flows. Regardless this financial importance of customer relationships, for decades there has been a lack of suitable frameworks explaining how customer relationships contribute to the firm financial performance and how this contribution can be actively managed. In order to facilitate a better understanding of the customer asset, contemporary marketing has investigated the use of financial theories and asset management practices in the customer relationship context. Building on this, marketing academics have promoted the customer lifetime value concept as a solution for valuating and managing customer relationships for optimal financial outcomes. However, the empirical investigation of customer asset management lags behind the conceptual development steps taken. Additionally, the practitioners have not embraced the use of customer lifetime value in guiding managerial decisions - especially in the business-to-business context. The thesis points out that there are fundamental differences between customer relationships and investment instruments as investment targets, effectively eliminating the possibility to use financial theories in a customer relationships context or to optimize the customer base as a single investment portfolio. As an alternative, the thesis proposes the use of customer portfolio approach for allocating resources across the customer base for improved shareholder value. In the customer portfolio approach, the customer base of a firm is divided into multiple portfolios based on customer relationships’ potential to contribute to the shareholder value creation. After this, customer management concepts are tailored to each customer portfolio, designed to improve the shareholder value in their own respect. Therefore, effective customer asset management with the customer portfolio approach necessitates that firms are able to manage multiple parallel customer management concepts, or business models, simultaneously. The thesis is one of the first empirical studies on customer asset management, bringing empirical evidence from multiple business-to-business case studies on how customer portfolio models can be formed, how customer portfolios can be managed, and how customer asset management has contributed to the firm financial performance.

Customer Value in E-Service: Conceptual Foundation and Empirical Evidence

Customer value has been identified as “the reason” for customers to patronize a firm, and as one of the fundamental blocks that market exchanges build upon. Despite the importance of customer value, it is often poorly defined, or seems to refer to different phenomena. This dissertation contributes to current marketing literature by subjecting the value concept to a critical investigation, and by clarifying its conceptual foundation. Based on the literature review, it is proposed that customer value can be divided into two separate, but interrelated aspects: value creation processes, and value outcome determination. This means that on one hand, it is possible to examine those activities through which value is created, and on the other hand, investigate how customers determine the value outcomes they receive. The results further show that customers may determine value in four different ways: value as a benefit/sacrifice ratio, as experience outcomes, as means-end chains, and value as phenomenological. In value as benefit/sacrifice ratio, customers are expected to calculate the ratio between service benefits (e.g. ease of use) and sacrifices (e.g. price). In value as experience outcomes, customers are suggested to experience multiple value components, such as functional, emotional, or social value. Customer value as means-ends chains in turn models value in terms of the relationships between service characteristics, use value, and desirable ends (e.g. social acceptance). Finally, value as phenomenological proposes that value emerges from lived, holistic experiences. The empirical papers investigate customer value in e-services, including online health care and mobile services, and show how value in e-service stems from the process and content quality, use context, and the service combination that a customer uses. In conclusion, marketers should understand that different value definitions generate different types of understanding of customer value. In addition, it is clear that studying value from several perspectives is useful, as it enables a richer understanding of value for the different actors. Finally, the interconnectedness between value creation and determination is surprisingly little researched, and this dissertation proposes initial steps towards understanding the relationship between the two.

Rethinking Service Companies’ Business Logic: Do We Need a Customer-Dominant Logic as a Guideline?

Purpose –This paper explores and expands the roles of customers and companies in creating value by introducing a new a customer-based approach to service. The customer’s logic is examined as being the foundation of a customer-based marketing and business logic. Design/methodology/approach – The authors argue that both goods-dominant logics and service-dominant logics are provider-dominant. Contrasting the customer-dominant logic with provider-dominant logics, the paper examines the creation of service value from the perspectives of value-in-use, the customer’s own context, and the customer’s experience of service. Findings –Moving from a provider-dominant logic to a customer-dominant logic uncovered five major challenges to service marketers: Company involvement, company control in co-creation, visibility of value creation, locus of customer experience, and character of customer experience. Research limitations/implications – The paper is exploratory. It presents and discusses a conceptual model and suggests implications for research and practice. Practical implications –Awareness of the mechanisms of customer logic will provide businesses with new perspectives on the role of the company in their customer’s lives. We propose that understanding the customer’s logic should represent the starting-point for the marketer’s business logic. Originality/value – The paper increases the understanding of how the customer’s logic underpins the customer-dominant business logic. By exploring consequences of applying a customer-dominant logic, we suggest further directions for theoretical and empirical research.

Understanding solid-state transformations during dehydration: new insights using vibrational spectroscopy and multivariate modelling

Many active pharmaceutical ingredients (APIs) have both anhydrate and hydrate forms. Due to the different physicochemical properties of solid forms, the changes in solid-state may result in therapeutic, pharmaceutical, legal and commercial problems. In order to obtain good solid dosage form quality and performance, there is a constant need to understand and control these phase transitions during manufacturing and storage. Thus it is important to detect and also quantify the possible transitions between the different forms. In recent years, vibrational spectroscopy has become an increasingly popular tool to characterise the solid-state forms and their phase transitions. It offers several advantages over other characterisation techniques including an ability to obtain molecular level information, minimal sample preparation, and the possibility of monitoring changes non-destructively in-line. Dehydration is the phase transition of hydrates which is frequently encountered during the dosage form production and storage. The aim of the present thesis was to investigate the dehydration behaviour of diverse pharmaceutical hydrates by near infrared (NIR), Raman and terahertz pulsed spectroscopic (TPS) monitoring together with multivariate data analysis. The goal was to reveal new perspectives for investigation of the dehydration at the molecular level. Solid-state transformations were monitored during dehydration of diverse hydrates on hot-stage. The results obtained from qualitative experiments were used to develop a method and perform the quantification of the solid-state forms during process induced dehydration in a fluidised bed dryer. Both in situ and in-line process monitoring and quantification was performed. This thesis demonstrated the utility of vibrational spectroscopy techniques and multivariate modelling to monitor and investigate dehydration behaviour in situ and during fluidised bed drying. All three spectroscopic methods proved complementary in the study of dehydration. NIR spectroscopy models could quantify the solid-state forms in the binary system, but were unable to quantify all the forms in the quaternary system. Raman spectroscopy models on the other hand could quantify all four solid-state forms that appeared upon isothermal dehydration. The speed of spectroscopic methods makes them applicable for monitoring dehydration and the quantification of multiple forms was performed during phase transition. Thus the solid-state structure information at the molecular level was directly obtained. TPS detected the intermolecular phonon modes and Raman spectroscopy detected mostly the changes in intramolecular vibrations. Both techniques revealed information about the crystal structure changes. NIR spectroscopy, on the other hand was more sensitive to water content and hydrogen bonding environment of water molecules. This study provides a basis for real time process monitoring using vibrational spectroscopy during pharmaceutical manufacturing.