The Influence of Internal Communities of Practice on Customer Perceived Value in Professional Service Relationships

Effective customer-related knowledge transfer can be seen as the cornerstone of customer value creation in collaborative relationships between professional service organisations and their customers. Our intention in this paper is to describe how different work groups within organisations (communities of practice) influence the perceived customer value. We approach this phenomenon from a relationship management perspective and use literature from relationship marketing, organisation research and knowledge management as a theoretical basis. Empirically the paper is based on an information-rich explorative case study of a professional service organisation, operating in the consultancy and training business, and its relationship with one of its customers.     

Ethical Customer Value Creation: Drivers and Barriers

There is a long-standing discussion on the positive interactions between enterprise value creation and business competitiveness. The corporate value can be seen as being created from three major sources within the cycle – from employees, from processes, and from customers or investors through reinvestment. To achieve competitive advantages, a firm must create more value than its competitors in the industry. Emphasizing that, firms should explore the positive drivers of customer value creation, allowing for a true value creation that will lead to increments in competitiveness. In reality, however, there are also barriers that hinder customer value creation. Targeting the above issues that have not yet been explored or analyzed, we have collected related literature at the first stage. Based on these presumable assumptions, this paper then conducts an empirical study by surveying and analyzing the relevance given by the investigated leading machinery measuring equipment firms in Taiwan, regarding the concerns as drivers and barriers in relation to customer value creation. This paper especially aims to answer several key questions: What drivers revolving around employees and processes can facilitate the organization to create more value for its customers? Conversely, what barriers block the organization from creating value for customers in examining the same dimensions? Does value creation direct an organization’s profitability and competitiveness? Our questionnaire survey results show that the most recognized and agreed drivers of customer value creation in consideration of employees are “distinctive skills”, “personal experience”, “learning and training”, and “team work”; and, in regard to the firm’s processes, the key drivers are “innovation and evolution”, “R&;D capability”, and “capability for differentiation”. Conversely, the most recognized and agreed barriers to customer value creation in relation to employees are a “distrustful environment” and “inadequate knowledge”; and, in terms of processes, they are “short of core technology”, “poor resource support”, and “bad services and attitudes”. Furthermore, our in-depth interview outcomes reveal that “capital sufficiency” and “mergers and acquisitions” are in practice considered to be other important customer value creation drivers; in contrast, “cultural and structural barriers” and “short of mechanisms to measure customer value creation effectively” are viewed as additional critical barriers to customer value creation.     

Understanding value-creating practices in social media-based brand communities

For service providers hosting social media-based brand communities, understanding the use of value-creating practices enables them to enhance their customers’ brand community experiences and facilitate value. Yet, extant social media-based brand community research neglects to examine the uses of practices in commonly occurring, direct service provider customer interactions that may be value co-creative. Thus, for a more holistic view of value creation, and informed by service logic, this study applies netnography to observe participants’ uses of practices in two social media-based cause brand communities, in both direct and indirect interactions. The findings reveal that participants predominantly employ practices in direct interactions and act as value co-creators. The findings extend empirical evidence into value-creating practices in social media-based brand communities. They also highlight how cause organisations should plan their uses of practices to facilitate the types of value-creating interactions they seek (i.e. direct and value co-creating, or indirect and independently value creating).     

Midstream value creation in social marketing

ABSTRACT

The purpose of this study is to develop improved understanding of how value is created at the midstream (meso) level in a collaborative smoke-free homes and cars social marketing programme. The study adopts a qualitative approach including interviews and observation. The findings show that the co-creative organisational model adopted for the Smokefree programme affords access to resources and capabilities of midstream actors and provides opportunities for reshaping and mobilising existing value networks. The focal organisation has a key role in coordinating, connecting actors and providing resources to facilitate value co-creation at the network level. The study illustrates that the service interaction allowed for customer-centred cues for action which took into account their context and the existence/lack of resources for value creation. The implications of this study are discussed, in particular, in terms of the role of focal organisations in managing value networks, the social context, configurational fit and resources of actors involved in community-based social marketing and the need for policies and practices to provide health professionals with role support for health promotion.     

The role of other customers during self-service technology failure

Service recovery through inter-customer helping is especially meaningful in the self-service technology (SST) failure context because SSTs are associated with a high risk of failure due to the lack of face-to-face contacts with employees. In understanding the phenomenon of inter-customer helping, two fundamental questions are investigated in the current research: (1) does social influence play a role in customers’ helping decisions? and (2) what are the motives for helping? Through two experimental studies, we provide evidence that two different forms of social influence play a role in helping others during SST failures, and customers have self-centered (vs. other-centered) motives. Results from Study 1 showed that individuals in the private environment indicated more willingness to help than individuals in the public environment did due to heightened perceived responsibility. Study 2 revealed that tie strength influenced willingness to help via a dual pathway: perceived responsibility and social approach motives. Finally, we discuss and highlight the positive influence that self-centered motives can exert in the SST failure scene.     

Role of downward versus upward social comparison in service recovery: Testing a mediated moderation model with two empirical studies

This paper extends prior research into the role of social comparison in service recovery by investigating the role of both downward and upward social comparison. Social comparison theory and attribution theory are applied to explore the differences in how upward and downward inter-customer comparison affects post-recovery satisfaction and word-of-mouth intentions. The mediating role of distributive justice perceptions and the moderating effects of the attribution of inter-customer differences in service recovery and customers’ justice sensitivity are also examined. Two online scenario-based experimental studies show that downward social comparison leads to greater satisfaction and lower negative word-of-mouth intentions. In addition, distributive justice mediates the relationship. Finally, attribution of difference in inter-customer influence and individual-level justice sensitivity moderate these effects. Besides its conceptual contributions, the findings from this paper may help managers design more effective service recovery strategies.     

Adapting a book to make a film: how strategy is adapted through professional practices of marketing middle managers

Abstract

For an organisation to be competitive its strategy must be highly responsive to both environmental challenges and customers continuously shifting demands. Yet many organisations treat strategy making as an exclusively top management concern, even though the top management team is often remote from the daily interactions and communications taking place at the organisation, market, and customer interface. We challenge the assumption that strategy making ‘belongs’ to top managers and argue that marketing middle managers, possessing expert market and customer knowledge and insights, adapt top manager’s strategy to shifting customer demands in a changing environment. We explore this argument by adopting a strategy-as-practice perspective and analysing marketing middle manager’s practices across three case companies operating in a dynamic retail environment. Our research enables two key contributions. Our primary confirmation is to demonstrate that marketers are not passive implementers, but active adapters of top management strategy through three critical practices of sensing, challenging, and transmitting. We use the novel analogy of how adapting a book to make a film involves minor changes to the story line and characters to suit the new medium and to illustrate the strategically relevant and influential role marketing plays in adapting the strategy developed by the top management team for implementation. By demonstrating the value of the strategic practices of functional middle managers we also contribute to the growing debate of the need for greater inclusion and transparency in strategy making.     

The Role of External Relationships for LSP Innovativeness: A Contingency Approach

Innovativeness is key to the success of logistics service providers (LSPs) and as LSPs often lack competencies for innovation internally, external relations as sources to acquire knowledge relevant for innovation are important. To the authors' knowledge, there is no research identifying the relevant knowledge sources for LSP innovativeness. Based on contingency theory, we develop a conceptual model on the relevance of different external relations in the context of the innovation focus of the LSP. Thus, we extend insights from previous studies that have only discussed the benefits of external knowledge acquisition in general and outline how to use existing business relations of an LSP to facilitate different types of innovation. The hypothesized model is tested based on survey data from 201 LSPs using structural equation modeling. The findings support the model and outline that better relationships with external service firms or other LSPs are not important for internal process improvements and innovations for existing customers, but very valuable for innovations targeting new customer business, while good relations to customers even show a slight tendency to hamper the development of innovations for new customer business. In addition, it is shown that innovativeness is a strong driver of LSP firm performance.     

The role of customer gratitude in making relationship marketing investments successful

This paper recognises that customer loyalty is important for many competitive organisations, and that retail firms make investments to build and maintain loyal relationships with their existing and potential customers (e.g. loyalty programs). However, there has been little focus on the mechanisms by which these relationship investments operate to achieve customer loyalty. This paper examines one mechanism, namely customer gratitude, which works to make a firm’s relationship marketing investment a success or a failure. Using data from 1600 undergraduate students, this study empirically confirms the mediating role of customer gratitude between the customers’ perceptions a firm’s relationship marketing investments and customers’ perceptions of the value of the relationship with the firm. Further, a significant moderating effect of perceived benevolence on the relationship between customers’ perceptions a firm’s relationship marketing investments and customer gratitude was identified. For theorists, this customer gratitude model offers a better psychological explanation of how relationship marketing investments operate to improve the value that customers place on their relationships with retailers. Our research suggests that managers should invest resources to stimulate customer gratitude in order to build strong customer–seller relationships.     

Implementation and Outcomes of Customer Value: A Dyadic Perspective

This study examines the concept of customer value based on the views shared by service firms and their consumers. Using qualitative and quantitative approaches, the study reveals customer satisfaction and retention as outcomes of front-line service employees' value delivery practices. Our results suggest that service employees' efforts to deliver customer value, even when based on a dyadic view, do not necessarily lead to customer retention. Rather, customers become more loyal when the value provided by service employees is matched by consumers' satisfaction. In other words, satisfaction is an important and necessary mediating variable between employees' efforts and customer retention.     

The exploitation of market knowledge within relationship orientated small accountancy practices

Within the academic literature there is general acceptance that customer knowledge competence can have a critical influence over whether a firm can successfully achieve a market advantage over competition. There is, however, only limited empirical evidence to support this perspective. This study utilises a previously developed customer knowledge survey tool to compare knowledge management practices within small relationship orientated accountancy practices and small, transactionally orientated firms. The survey was undertaken across a sample of small UK accountancy practices. Results suggest that compared to their transactional counterparts, small relationship orientated firms perceive that customer knowledge is an important aspect of the marketing process. Small, relationship orientated practices also appear to recognise the importance of operating a structured knowledge management system within their organisations.     

Identity,knowledge and strategy in the UK subsidiary of an Anglo-German automobile manufacturer

This paper uses a qualitative case study of an Anglo-German automobile manufacturing plant to investigate the role played by the strategic self-presentation of national, class and ethnic identities by different groups within the organisation in knowledge management and power relations in multinational corporations (MNCs). I explore this using a ‘negotiated culture’ approach to cross-cultural management. My findings are, firstly, that knowledge management played a crucial part in strategic self-presentation and thus in power relations. Secondly, that an examination of knowledge management activities from this perspective provided a way of analysing the complexity of intergroup interaction in the organisation. Thirdly, that workers as well as managers engage in knowledge management and strategic action. I conclude that a qualitative analysis of knowledge management can help researchers and managers deal with the complexities of social behaviour in organisations, and suggest frameworks for understanding of the impact of identity on knowledge management.     

A framework for conducting a customer orientation audit

It can be all too easy for senior managers, especially those in large organisations to become cut off from their customers and hold comfortable illusions about how well products and services are being received. This underscores the difficulties companies face in sustaining a systematic programme of customer orientation. This paper argues that the difficulties arise primarily from lack of effective internal organisation. It provides a framework which is intended to help decision makers in organisations to analyse and evaluate their overall customer strategies, and determine whether or not such strategies truly reflect a culture of customer orientation. The method offered here is requisite for strategic customer management, which is called for in today's turbulent business environment.     

Exploring the application of IVR: lessons from retail banking

In today's increasingly competitive retail banking environment, banks are faced with the challenge of building and maintaining relationships with profitable customers while at the same time embracing technological change. So, while on the one hand increasing the role of technology in a services organisation can serve to reduce costs and often improve service reliability; on the other hand, organisations are acutely aware of the important role for personalised relationships in the delivery of their service proposition. This article reports on a qualitative research study into the perceptions of customers and staff of a large retail bank regarding the piloting of an interactive voice recognition (IVR) system. This system is regarded as a way for the case bank to benefit from technological advances, while still retaining its relationships with more profitable customers. To this end, the system was hoped to encourage lower net worth customers to increase their use of the bank's telephone banking facility, and allow branch staff, who would be freed from dealing with routine telephone enquiries, to deliver a better personalised service to high net worth customers. However, despite this rationale, the article reports the paradoxical situation that the system has been effectively rejected by customers and staff alike. The key objection is that relating to the perceived service discrimination between high and low net worth customers, the very rationale for which the IVR was introduced.     

Retaining customers in UK financial services: The retailers' tale

Retaining customers offers major benefits to retailers of financial services, such as improved customer profitability and lowered acquisition costs. In spite of the importance to the sector in minimising customer ‘churn’, there has been limited investigation into the practices of customer retention. This paper reports empirical research into the retention of customers in traditional retailers of financial services in the UK to study the practices involved in retention. Following a pluralistic research design, data were generated by means of interviews with senior bank staff and by surveying staff involved either directly or indirectly with retaining customers. The study discovers key elements in the practice of retaining customers and also points to a number of potential difficulties as these organisations balance the activities of customer acquisition and retention.     

Defining the knowledge that an organisation requires to create customer capital from a customer perspective

Consumer capital is a very important asset for an organisation as it is the result of an organisation's relationship with its customers. This paper sets out to confirm that organisations need to create customer capital in SMEs (Small Medium Enterprises). As part of this study, four types of knowledge have been identified (i.e. customer knowledge, individual knowledge, collective knowledge, and machine-readable forms) and this paper investigates the relationships between the different components of knowledge and the process to obtain customer capital from the external perspective of the company. This involved an empirical study of 365 customers. Two structural equation models have been used, resulting in the conclusion that before obtaining customer capital it is necessary to convert individual knowledge, collective knowledge (C_LK), and machine-readable forms into customer knowledge.     

High performance work practices in small firms: a resource-poverty and strategic decision-making perspective

High performance work practices (HPWPs) are human resource management practices aimed at stimulating employee and organisational performance. The application of HPWPs is not widespread in small organisations. We examine whether the implementation of coherent bundles of HPWPs (aimed at employee ability, employee motivation or at the opportunity to perform) depends on the scarcity of resources, as reflected in the size of the company, and on strategic decision-making in small firms related to the owner’s expertise and attitudes. In our research, a total of 211 employees from 45 small organisations were asked to rate the presence of HPWPs in their organisation. These averaged perceptions were linked to information provided by the owner–managers on the size of their firm and their own expertise and attitudes. The findings support that smaller but coherent bundles of HPWPs can be found in small organisations and that the implementation of these bundles depends on available resources, strategic decision-making and the combination of the two. These findings highlight the need to integrate the notions of resource poverty and strategic decision-making to understand the uptake of bundles of HPWPs within small firms.     

Market Orientation and Firm Value

Several studies in the market orientation literature demonstrate a positive relationship between a market orientation and firm performance. However, the mechanisms of this relationship have yet to be explored in detail. This article addresses such a gap by proposing a conceptual model that links market orientation to wealth creation in firms. The model posits that a market orientation guides investment in market-based assets that may be deployed to create customer value. The realisation of customer value helps to both capture and retain customers. Quicker and more extensive market penetration, shorter sales cycles, and decreased marketing and sales costs enhance the cash flow of a market-oriented firm. This may be recognised in higher valuations, which ultimately translate into higher share prices and wealth creation for the owners of the firm. This model is used to describe the creation of value in the Major Business Division of BT, a large information technology service company. Recent success in this Division of BT is attributed to the creation of a market orientation and customer value-based strategy and processes. The experience of BT provides a clear illustration of how a market oriented firm creates value for both customers and shareholders.     

Doing good and doing business at the bottom of the pyramid

There is an ongoing debate among scholars regarding the existence of a fortune at the bottom of the income pyramid. While some scholars argue that there is a profitable market at the pyramid base, others refute this proposition, arguing that targeting poor people as customers could lead to unethical business practices and further their exploitation. With the aid of mini cases, this article explains that there is indeed a fortune to be made at the base of the pyramid but that good fortune can be created for both corporations and poor people if the population at the bottom of the pyramid is treated as suppliers, producers, co-owners, and/or employees rather than as mere consumers. However, in terms of consumers, there is a market for firms at the base of the pyramid through which they can earn profits and simultaneously help eradicate poverty, mainly by lowering the cost structure for poor people. In other words, firms that can reduce poverty and provide cost-effective utilitarian goods and services to poor people have more to gain from such individuals than those firms that provide more luxurious goods and services or offer goods with mere aesthetic or emotional value. With the help of mini cases, this article explains four measures firms can use to create fortunes for themselves as well as for poor customers by avoiding affordability and adaptability traps.     

Digital Analytics: Modeling for Insights and New Methods

Firms are increasingly turning towards new-age technologies such as artificial intelligence (AI), the internet of things (IoT), blockchain, and drones, among others, to assist in interacting with their customers. Further, with the prominence of personalization and customer engagement as the go-to customer management strategies, it is essential for firms to understand how to integrate new-age technologies into their existing practices to aid seamlessly in the generation of actionable insights. Towards this end, this study proposes an organizing framework to understand how firms can use digital analytics, within the changing technology landscape, to generate consumer insights. The proposed framework begins by recognizing the forces that are external to the firm then lead to the generation of specific capabilities by the firm. Further, the firms capabilities can lead to the generation of insights for decision-making that can be data-driven and/or analytics-driven. Finally, the proposed framework identifies the creation of value-based outcomes for firms and customers resulting from the insights generated. Additionally, we identify moderators that influence: (a) the impact of external forces on the development of firm capabilities, and (b) the creation of insights and subsequent firm outcomes. This study also identifies questions for future research that combines the inclusion of new-age technologies, generation of strategic insights, and the achievement of established firm outcomes.