Customer Value

The process of services is generally either actively supported by a service provider using service context or only passively supported through a self-service technology.

Regardless of the style how customers choose to encounter the company, whether it be the customers consuming the goods in traditional way or using the service through self-service technologies, they are operating in a self-service process where

the goal is to provide value for them (Grönroos 2008). Hence, consumption is typi-cally a process where customers serve themselves. However, in a context where service provider is present, the service provider has a chance to interact with the customer and the consumption process can be intervened (Grönroos 2008). This is an opportunity for companies, allowing them to learn from the customers’ behavior, teach them possible new and useful skills for more seamless experience, and com-panies can provide them with more varied encounters than is possible during a self-service context (Grönroos 2008).

Customer value in services is experience driven, co-created with customers, and context dependent (Vargo and Lusch 2004). It is an outcome of customer integration and value co-creation efforts (Meyer and Schwager 2007; Vargo and Lusch 2008).

Customer experiences and value results from activities, interactions, and communi-cations with service settings (=servicescapes), SSTs, frontline employees, and other customers.

Many major companies have implemented focus on favorable customer ences as a part of their core strategy (Pine and Gilmore 1998). Customer experi-ences are in the core of business and a great source for value creation. The holistic and experiential perspective which recognizes value in the context of customer ex-periences has started gaining interest among practitioners and academics (Grön-roos and Voima 2013). Solely focusing in selling goods and services are not suffi-cient anymore in today’s service-led economy and customers are desiring services and goods that leave positive experiences and lasting impressions and memories.

According to Åkesson et al. (2014) customer value dwells in activities and interac-tions and the experience is ultimately subjective. Åkesson et al. (2014) uses a pre-vious definition of value: “interactive relativistic preference experience”, which im-plies that the value is contextual and personal, and it can be determined as a func-tion of interacfunc-tions among different people or between a person and an object. Value reflects affection, attitudes, satisfaction, or behaviorally based judgments, and it is based on value co-creation processes and resource integration (Åkesson et al.

2014). However, value creation efforts are not always properly managed, and they can also result in a destruction of value, which are possible when customers have

unfavorable incidents and experiences (Grönroos and Voima 2013; Åkesson et al.

2014).

Academics has argued that nowadays value is not just inserted in services and products, rather it is centered in the experiences of consumers (Åkesson et al.

2014). Bitner et al. (2008) states that companies cannot solely compete providing superior value through their core products and service offerings. Rather, the com-panies must start focusing on customer experience management, and with that, cre-ating emotional and long-term connections with their customers through engaging and co-creation actions of memorable experiences involving a combination of prod-ucts/goods and services (Bitner et al. 2008). By engaging customers and getting their attention in memorable ways with company’s service offerings, the company creates value for both; itself and its customers (Voss et al. 2008).

Gentile et al. (2007) argue that value proposed by the company will be perceived by customers basing the evaluation to customer experiences. It is recognized that value can be viewed as hedonic or utilitarian (Gentile et al. 2007; Collier and Barnes 2015). Hedonic value is connected to the experiential aspect of the service and value is formed from emotional dimensions of experience or through self-fulfilling benefit derived from the process (e.g., Collier and Barnes 2015). Experiential as-pects of value have started to raise interest along with the interest to the concept of customer experience (Zomerdijk and Voss 2010; Lemon and Verhoef 2016). Utili-tarian value is linked to functional and more practical aspects of service or product.

The proposed value delivery occurs when the service is consumed. Adding the he-donic aspects and experiential focus to services can enhance value proposition and appeal to customers’ cognitive side in addition to their emotional side. Zomerdijk and Voss (2010) also adds that in experiential services, it is to some extent sug-gested to formulate the service process flow to evoke desired behavior in custom-ers. Voss et al. (2008) also note that using prior experiences can evoke desired reactions and emotions in customers and be used as a tool for differentiation from competitors. Gaming and gambling companies utilizes this, for instance, in the form of using similar characters and themes from popularly used older games in their newer games to reattract the existing customers.

Delivery of high service quality is one of the primary sources of competitive ad-vantages for service providers. Service quality measurement in the customer-em-ployee encounter context has been dominantly measured with SERVQUAL method however, the transition in terms of research focus has turned to customer experi-ence (Parasuraman et al. 2005). Additionally, it has been noted that customer’s in-teraction process with SSTs significantly differs from traditional customer-employee transactions, thus making the evaluation of the quality of the service more complex (Parasuraman et al. 2005). Prior research has also focused in online settings of technology-based encounters due to their increased use and availability. The SSTs have become more sophisticated and has evolved into multiple service co-produc-tion and delivery channels (Lin and Hsieh 2011). Lin and Hsieh (2011) in their re-search developed a method called SSTQUAL to measure necessary aspects of the SSTs’ service quality.