Where does value come from?

In my last post about Emergent Co-Created Value, I quoted a paper by Lucy Kimbell on how the value of services are co-created by stakeholders. The section I particular liked in Kimbell’s paper references a few other papers and I’m tracing them back to see what else I can learn about how value is co-created.

Like many service design papers Payne Et Al’s Managing the co-creation of value is very theoretical and reports little empirical work even though they do say they have worked with several businesses in co-creation projects.

In the paper there is a tacit acknowledgement that the relationship between producer and customer is not equal. In order to realise value, customers have to learn how to deal with the service (or product) offering and producers must align their offering with customers existing practices or persuade customers to adopt a new practice. These next two sentences seemed key:

value is embedded in customers’ practices and that this value can be enhanced through positive interventions or further development.

and

 supplier’s motivation should be to improve these customer practices in order to build value for the customer and a more valuable role for itself in the customer’s activities

That is, customers do particular things and in order to provide value for customers then you need to understand the things they do and make those things easier, or you need to re-align the things that customers do so that your offering becomes part of the customer’s practice.

 value co-creation opportunities can be identified by the supplier ‘teaching’ the customer certain co-creation behaviors […] For example, suppliers can create clear ‘scripts’ to communicate expectations to the customer on how they can actively participate in the co-creation of value

A good example of a “script” is the ordering process at Starbucks which Sean Durham at DDO has usefully deconstructed. You can, of course, always try to resist the script. Hilarity often ensues.

For Payne et al, suppliers must understand customer’s practices to create their offering and must create scripts to help customers know how to adjust their practices to fit the offering. Customers, for their part “must, however, learn to use, maintain, repair, and adapt the offering to their individual needs, usage situations and behaviours”.

Value, then, emerges from the interaction between the service (or product) offering the the ways that customers enact their practice.

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One thought on “Where does value come from?

  1. Pingback: Customer-induced variability | Not Easily Obvious

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