Using customer participation strategies to increase organisational productivity
- Thomas Davis
- Mar 18, 2022
- 5 min read
Three customer participation strategies which increase organisational productivity and customer satisfaction are proposed here. The importance of using customer participation strategies is underpinned by The GAP Model of Service Quality (Wirtz and Lovelock, 2018).
Through the recognition that value is always co-created (Vargo and Lusch, 2004), customer participation strategies can assist closing the gap to ensure the delivered service meets the quality expectations as perceived by the customer.
1. Defining customers job's
The first strategy, consisting of three distinct features, is defining customer’s jobs (Bowers and Martin, 2007).
Help one’sself
Firstly, customers roles can be defined to suggest they should help one’s self. Customers help themselves through active participation in the service delivery. This increases organisational productivity because the “less direct contact there is between the customer and the service production system, the greater the potential for the system to operate at peak efficiency” (Chase 1978). This can be applied across a wide range of services with a wide scale of consumer involvement. Levels of participation are proposed. For example, low participation includes fast food chains (Bitner et al., 1997), or petrol stations where 80% of sales are now performed by self-service customers (Yergin 1993). Medium participation includes hairdressers. High participation includes services like therapy (Bitner et al., 1997).
Home sales where homeowners can either self-sell, a do it yourself approach, or remove themselves from involvement by using an estate agent demonstrates varying levels of participation. A middle option of involvement is noted within literature; using a “gallery of homes approach” which engages the homeowner as a productive resource; allowing them to self-list. The gallery’s service offering consists of showing images to prospective buyers, booking appointments and creating itineraries. Buyers are required to use their own transportation and homeowners conduct their own viewings. Organisational productivity is increased because estate agents can focus on offerings requiring specialist training; not providing transportation and viewings (Fitzsimmons, 1985). This service facilitates social interaction and communities; both of which are found to enhance the productive creation process (Martínez-Cañas et al., 2016); increasing both organisational productivity and customer satisfaction. In addition, when customers are helping one’s self, feelings of dissatisfaction are less likely when something goes wrong (Bitneret al., 1997). They are more likely to take responsibility for the outcome (Bendapudi and Leone, 2003).
Helping others
Consumers roles can be defined to encourage them to help others. Literature recognises the role of residents of retirement homes in welcoming new members to the community. Using customers as mentors improves future interactions with customer-contact employees (Bowers and Martin, 2007). Customers helping each other reduces uncertainties about expectations, enhances self-esteem and strengthens perceptions of belonging (Adelman and Ahuvia, 1995).
Customers helping one another has been coined as ‘intercustomer support’ and can be considered through the lens of the service dominant logic (SDL) which suggests “the customer is always a co-creator of value” (Vargo and Lusch, 2008). The context of value creation is described as a “network of networks” (Vargo and Lusch, 2008). Defining a customer’s role in a way that encourages them to help others is critical to facilitating value creation and subsequently increasing customer satisfaction. The impact of customers helping one another enables managers to capitalise on customers as resources (Lengnick-Hall 1996) It can be argued that rather than defining the role of individual customers, emphasis should be on investigating relationships that facilitate customer exchanges (Borgatti and Foster 2003). Particularly when striving to increase customer satisfaction; customers have higher levels of perceived support through a customer-centric network (G. Black et al., 2014). Customers helping each other has a positive impact on organisational productivity; it allows employees more time to focus on customers (Yi, Nataraajan, and Gong, 2011).
Promoting the company
Customer roles can also be defined to include promotional responsibilities. Cash rewards and prizes can be offered to customers who refer others. Bowling centres use ‘word- of-mouth heroes’ to harness the connections of their existing customer base (Bowers and Martin, 2007). Customers have been recognised within literature as effective promotors of firms (Zeithaml et al., 1996). Customers who promote a firm demonstrate customer loyalty behaviours; word of mouth, recommendations for potential future purchases and acceptance of new products (Arndt, 1976). This is important for increasing positive evaluations of a firm and increases customer satisfaction (Parasuraman et al., 1985). Importantly, a customer’s willingness to promote relies on internal motivation (Mills and Morris, 1986) and is limited by their willingness to accept direction from a firm (Solomon et al., 1985).
2. Recruit, Educate and Reward Customers
The second strategy proposed is recruiting, educating and rewarding customers (Bowers and Martin, 2007).
Recruiting
It is important to recruit the right customers within a service environment. Customers should be recognised on a human resource level; customers act as employees regularly (Harris and Baron, 2004). Careful consideration should be given to which customers are recruited. Firms serving customers who mistreat employees suffer negative impact to their organisational productivity due to increased costs for recruitment and retention (Harris and Reynolds, 2003). Companies with very satisfied employees outperform average companies in terms of employee turnover, absenteeism, and employee recruitment (Russell, 2004).
Educating
Customers must be educated or trained to be deeply involved in the service production. This is well-demonstrated by Disney who develop arrival-preparation handbooks for guests. Hospitals offer patient handbooks, so patients are aware of needed items and visiting hours (Bowers and Martin, 2007). Educating customers ensures participation is ‘planned and managed’ which can increase the organisational productivity of a firm (Rodie and Kleine, 2000).This increases customer satisfaction by increasing service quality. Literature suggests training customers contributes to service quality(Goodwin, 1988).
Rewarding
It is suggested that the final step is to reward customers for performing a function. For example, American Express Gold Card holders receive benefits (Bowers and Martin, 2007). Rewarding customers increases customer satisfaction. A simple “thankyou” note has found to reducelapse rates of insurance policies (Bergiel and Trosclair, 1985). Rewarding customers increases organisational productivity; it can reinforce desired participation behaviour; helping firms sustain competitive advantage (Yi et al., 2011).
3. Managing the customer mix
The third proposed customer participation strategy concerns managing the customer mix (Bowers and Martin, 2007). Firms must develop mechanisms for managing customer behaviour (Yi et al., 2011). Academics have shifted to considering customers as “partial employees”; a number of human resource management techniques can be employed. (Halbesleben and Buckley, 2004). Treating customers as employees essentially integrates them into a workforce. While it could be suggested that this would increase organisational productivity, recent research suggests the contrary. Integrating customers into a workforce decreases physical employee workload but increases psychological workload due to increasedinteractions (Hsieh et al., 2004).
The customer participation strategies increase organisational productivity and customer satisfaction as demonstrated by the GAP model (Wirtz and Lovelock, 2018). The strategies demonstrate how the careful management of customer participation can positively impact a firm.
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