Customer participation in joint value activities: the case of SBB

In this section we apply the proposed framework of joint value activities for the production of the business offering in a comprehensive case study from the literature about customer participation in co-creation activities in the Swiss Federal Railway operator (SBB) (Gebauer, Johnson and Enquist 2010). The main objective is to show how the categorization of joint value activities can be applied in a real business situation, as it is described in that case study. In addition, we provide insights how the proposed categorization of joint value activities can provide managerial and strategic insights for the development of further joint value activities with the customer.

The co-creation activities in SBB are described briefly in table 5.3. In the first column we list all the business initiatives for customer participation that are mentioned in the case study and we describe them briefly in the second column;

in the third column we notice the type of co-creation activity that is applied.

The company uses self-service to increase the efficiency of its processes (in buying tickets, validating tickets, reporting lost property incidents, and keeping the wagons clean). To meet the needs of specific passengers and clients, the company emphasizes on the personalization of services. For instance, organizers of major events are able to tailor specific transportation services that can meet the unique requirements of their audience and ”achieve memorable performances in these events”. MobilPlus is a personalized service for handicapped people that combines the common to everybody transportation service with particular transportation service required by each handicapped passenger. The options in MobilPlus may not be infinite, of course, but each person is able to express his particular situation and need and ask for a specific service supplementary service.

Table 5.3: Value co-creation in SBB (adapted from Gebauer, Johnson and Enquist, 2010)

PRACTICE DESCRIPTION TYPE OF reply to questions about their travel experiences.

To meet customers safety concerns, SBB introduced inspectors to patrol the trains after 11 p.m. and established a specific “hotline” for ticket counters or at automatic ticket machines.

Self-service

Lost-property services

They utilize self-service facilities and the Internet. Self-service

“NaviGo”

service It enables customers to create and save timetables directly on their mobile phones that include real-time information, precise descriptions of how to get to the final destination, and maps.

Personalization

The service provides real-time information on any delays and platform changes, as well as information about seat capacity at peak times.

Customization

co-designing aspects of the new services. Feedback

“Travelcard

finder” service The “travelcard finder” enables customers describe their travel behavior and identify which type of ticket is the best for them.

Customization

“Click & Drive” Integrated service combines travel by train and car. The customer goes to a train station by train and then continues his journey by car.

Customization

passengers that suggests the best suitable travelcard option according to their travel behavior (e.g. frequency, daily period, routes, etc.). NaviGo is an electronic service that includes opportunities for both customization and personalization. Customization occurs when a passenger selects a route/ line and receives real-time information about delays, platform changes, seat capacity of arriving wagons, etc. This is common information transmitted to all the passengers that are interested in a specific line. Personalization with the use of NaviGo service exists when the customer wants to go to a specific destination, sets the exact departure and arrival points and receives a precise description of the itinerary, which may include also information for the use of other transportation services or for walking.

SBB collaborated with its passengers and special interest groups in order to learn from them for the design and the improvement of its services. The company initiated a feedback process with a free hotline through which passengers can communicate with the company and with a monthly survey in which customers rate the services and respond to questions. For the development of the MobilPlus service, SBB became aware of the needs of people with visual handicaps, hearing problems and mobility difficulties and obtained insights for the different types of assistance they need.

The proposed categorization framework of the joint value activities with the customer can provide additional insight to the SSB case study, that move beyond the research findings of Gebauer, Johnson and Enquist (2010). First of all, it can serve as a diagnostic tool that represents in a systematic way the different ways that customers can participate in joint value creation practices and helps managers understand the characteristics of customer participation. In addition, it may serve as a canvas of strategic alternatives for customer participation and as a tool that supports how to involve customers in joint value activities.

Analyzing the outcomes of the existing practices for customer participation and taking into account the business concerns (e.g. the attributes of the service offering, the applied business models, the organizational structures and the strategic priorities), the technological concerns (e.g. existing technologies and new technological trends) and the customer’s concerns (e.g. how the customer use the services and their evaluations of service usage), the company can decide for the future steps about customer participation.

Figure 5.3 depicts how the joint value activities with the customer in the SBB case study are allocated to the different types of joint value activities of the categorization framework. We observe SBB emphasizes on provider-driven joint value activities and on customer participation in the design process. First of all, we can understand and argue for the reasons for this. Transportation is a regulated kind of service that is carried out by the provider and offers few opportunities for initiative on behalf of the customer; hence customer participation takes place with regard to provider-driven joint value activities. The emphasis on customer participation in design-related activities apparently exists because such activities make possible the adaptation of the service to the particular preferences and needs of the customers, which is an added-value factor for the service offerings. We also notice that customer participation in

service production processes is limited to two kinds of self-service practices, because self-service saves time and increases the convenience of the customers. Do-it-yourself processes are not supported by SBB, because the opportunities for the role of the customer in the implementation of the transportation service itself provided by SBB are limited. Lastly, customer participation in innovation processes is limited to two kinds of feedback practices, while open innovation practices are not followed.

Next to analyzing and understanding the existing practices of customer participation, the categorization framework can indicate additional opportunities for customer participation. For example, customer participation is weaker in production and innovation processes. By paying more attention to these areas, SBB may increase the efficiency and the innovative capacity of its processes respectively. Knowing the characteristics of the areas (see table 5.1) and the types of customer participation in joint value activities (see table 5.2), the management of the company can decide for the benefits that can derive from the further customer participation.

Figure 5.3: Joint value creation practices in SBB

In the effort to anticipate additional opportunities for customer participation, the categorization framework can serve also as a prototype that supports the benchmarking of customer participation practices. SBB can gain insights how to increase customer participation in joint value activities and especially how to expand customer participation to additional areas of joint value activities from the similar experiences of other companies. For example, if the management of SBB sets as a strategic priority to increase customer participation in innovation processes and particularly to initiate open innovation activities, then it can seek for examples, good practices and success stories about open innovation activities from other companies in the transportation sector, or from other companies from any other sector.

In sum, the proposed categorization framework can support business managers structure their understanding and decide the ways they can mobilize customer participation. They can relate their strategic intentions and organizational

features to the characteristics of the different types of customer participation and decide for the best mix of customer participation practices.

5.4 Discussion

This chapter focuses on the Business Domain and the relationship between the Business Domain and the User Domain and addresses the need for better understanding of the role of the customer as contributor in joint value activities for the development of business offerings. We consider the development of the business offering is a business function and the study of customer participation requires a managerial perspective and approaches that takes equally into account the roles and the interests of the customer and the provider. This way, this work addresses the need for reciprocal value creating processes (Osborne and Ballantyne 2012) and balanced value creating approaches (Gummesson 2008).

The decision to involve and collaborate with the customer for the development of the business offering is a strategic decision for the company. The development of the business offering determines the value proposition to the customer and customer participation aims at improving the value potential of the offering in different ways (e.g. by adapting, improving the efficiency, increasing the novelty, etc.). Customer participation affects the requirements, the organization and the performance of the business processes and determines the nature of the business model. The proposed framework defines the areas and describes the key characteristics of the basic types of customer participation. This way, it provides general guidelines and strategic alternatives for the participation of the customer in the development of the business offering.

Chapter 6. The user’s perspective in service analysis and design

In this chapter we use the three-domain framework for the development of a method for the analysis and design of services from the user’s perspective. The development of the user’s perspective is based on the Customer Dominant logic (Heinonen and Strandvik, 2015) that regards service as embedded in the people’s life practices and shifts the focus from the providers’ concerns (e.g.

how to develop and provide services) to what customers are doing with services in their life practices. Hence, the user’s perspective emphasizes on the meaning of service and service value for the user and analyzes how the user integrates and uses a variety of services in his daily life practices.

The proposed method includes three domains of analysis: the User Domain, the Service Domain (corresponds to the Business Domain of the three-domain framework) and the Technological Domain. The User Domain refers to the activities and tasks of the user, the context of these activities and tasks, and the value for the service user. The Service Domain refers to the mobile services that are used to support the activities and tasks of the user. The Technological Domain refers to the mobile apps that provide mobile services, the devices and the technological context. The relationship of the proposed method to the three-domain framework is depicted in figure 6.1. The user’s perspective is clearly exposed in the analysis in the User Domain, but it pertains the complete method.

Figure 6.1: The User-Service-Technology method and the Three-domain framework

6.1 The User-Service-Technology method for service analysis and design

ICT-enabled services affect the way people behave and interact in their daily life practices. The substantial progress in mobile technologies, in particular, as a result of the rapid advances in mobile technologies, the proliferation of mobile devices (e.g. smartphones, sensors, etc.) and their ever-increasing capacities for interconnectedness and computing operations, enables ubiquitous service provision and offers opportunities for service innovations, especially for more personalized and higher value services. Mobile devices, especially smartphones and tablets, serve today as a multipurpose tool in the everyday life practices of the people and, hence, mobile services are embedded in the life of the user in a

‘smart’ and flexible way, anytime and anywhere. For this, we focus on the analysis of mobile services as key drivers for the ‘digitization of life’ and the ubiquitous service provision.

We consider it is difficult to see mobile services, applications and devices in separation of the user, his activities and intentions. For this, we propose a method for the analysis and design of mobile service from the user’s perspective. The user’s perspective emphasizes on the use of mobile service in the daily activities of the user, rather than on the processes and the technologies of the provider. The user’s perspective suggests the discussion about service use (i.e. what the customer does with the service) and service value (i.e. what are the outcomes of service use) can be even more important and insightful for service innovations than the discussion about service apps and technologies.

The proposed method for mobile service analysis and design includes the User Domain, the Service Domain and the Technological Domain (User-Service-Technology Method). In the User Domain, the key requirements refer to the activities and the tasks of the user (what is performed), the context of the user (when and where) and the value for the user (why). In the Service Domain, the key requirements refer the services that are used (what is provided). In the Technological Domain, the key requirements refer to the mobile apps, the devices and the technologies (technological context) that are used for the service production and delivery (how service is provided). The User-Service-Technology method for service analysis and design is depicted in figure 6.2.

Figure 6.2: The User-Service-Technology method for mobile service analysis and design

The three domains are connected and interrelated. The relationship between the user task and the service denotes the concept of service use. We consider service use is developed as a concept in the interaction between the user and the mobile service (as different users can make different use of a service, according to their specific customer logic). Therefore, service use is described as a result of the particular use of a mobile service in a specific task of the user.

The providers can only suggest indicative service uses and make value propositions, but they cannot dictate or control the use of service by the user.

The analysis of service use can reveal the customer logic and individual or collective service use patterns.

The relationship between the service and the Technology Domain refers to the business and technological models that are used for service provision. For example, service providers can offer mobile service directly to the end user with the use of mobile computing technologies and Internet and wireless

technologies; or in a different way, they can provide mobile service via the cloud, with the use of cloud resources and cloud computing technologies.

The method addresses the basic questions of what, how, when, where and why in service analysis and design. The concept of service is user-driven in this method and refers to ‘what’ functionality is delivered to the user, while the user activities and tasks refer to ‘what’ does the user do with the service. The context refers basically to ‘when’ and ‘where’ a service is used. The user value refers to the utility for the user from a certain service and refers in general to ‘why’ the service is used. The concepts of the technological domain refer to ‘how’ the service was developed and delivered to the user.

6.1.1 The user domain

The User Domain includes the analysis of activities, tasks, the context of the user and the service value for the user (table 6.1).

User activity. It refers to what the user is doing in his life. User activities are, for instance, working, driving, travelling, eating, resting, exercising, studying, etc.

The description of the different user activities provides the daily life practices and their analysis can reveal the lifestyle patterns, the routines and the habits of the user.

User task. Each activity can be further analyzed into tasks, i.e. specific actions.

Tasks refer to what the user is doing as a part of executing his activities. For example, when travelling, the individual can read the news, listen to the music, talk on the phone, work on the laptop, play a video game, eat, communicate on social media, etc.; when working, the an office worker can take notes, write reports, maintain archives, send e-mails, communicate with colleagues and customers, etc. Services support the individuals in the execution of their tasks.

User context. It refers to the prevailing physical and social conditions, as well as to the situation of the user. It involves the social context (e.g. relationships in social apps), personal context (e.g. personal characteristics, needs or preferences) and environmental context, which includes the location, the time and other environmental conditions (e.g. weather conditions). User context is important for the development and delivery of context aware, personalized and smart services.

User value. It refers to the value of the service for the user, or else the utility/

benefit the user gains as a result of the use of the service. User value is difficult to be precisely described, analyzed and assessed, however it is extremely useful to be taken into account in order to gain some insight ‘why’ the individual uses a service – or uses services in general. There are several categorizations of customer value in the literature that can be helpful in this. We consider the categorization of Sheth, Newman and Gross (1991) is useful for the value analysis of mobile services in this method.

Table 6.1: The characteristics of the user domain

A variety of activities the user performs in his daily life, such as:

Service is used in the daily tasks and activities of the people, as a part of their life practices. Hence, the concept of service here refers to the physical world (not to computing or software services) and provides real world effects. The mobile service in particular is an electronic service that can be provided, accessed and used with the use of mobile technologies and mobile devices. It represents the functionality (e.g. in terms of communication, information exchange, entertainment, economic transactions, etc.) that is received from a provider in order to support the activities and tasks of the user. The mobile service interrelates, hence, the activities/ tasks of the user in the User Domain and the mobile apps, devices and other technologies in the Technological Domain that are used to provide this functionality. The mobile service is different from the mobile app, which is the means for the provision of mobile service and can provide many mobile services (it is further discussed next). This way, the concept of the mobile service is not determined solely by the mobile apps and technologies, but is it shaped as a result of the combination of the provided functionality with the activities and the practices of the user.

6.1.3 The technological domain

The Technological Domain refers to the provider’s concerns about the production and delivery of mobile services as a part of its business operations. It includes the analysis of mobile apps, devices and the technological context for service provision (table 6.2).

Mobile App. It refers to the software means for the production and delivery of

Mobile App. It refers to the software means for the production and delivery of