Customer and stakeholder engagement in service industries: exploring new research frontiers

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1 UniSA Research Symposium 21st April 2017 Customer and stakeholder engagement in service industries: exploring new research frontiers Roderick J Brodie, University of Auckland in association with Julia Fehrer (University of Bayreuth), Jodie Conduit, (University of Adelaide), Elina Jaakkola (Turku University)

2 Agenda 1. Why Engagement is even more important? 2. Theorizing about Customer Engagement 3. From Customer to Actor Engagement 4. Exploring New Frontiers CE to AE 2 N 2

3 1. Why Engagement is even more important? Klaus Schwab velocity scope systems impact Interaction, Connectedness, Experience in Networks

4 Experience Environments & Networks Ecosystem

5 New Strategic Spaces for Service Innovation Prahalad & Ramaswamy (2003)

6 Moving Forward and making a Difference: Research Priorities for Service Science (JSR Ostrom et al., 2010) comprehensive research agenda Leveraging technology to develop and deliver new services and solutions Customer engagement in service innovation Value co-creation and customer engagement in service environments Learning from evolving consumer experience Open innovation approach to service design update 2015 underlying mechanisms that determine understanding and coordinating value creation in multi-actor network and collaborative contexts

7 Why the need for a new concept? Broadened perspective of relationships shift from a goods to a service logic interactions among organizations, organizational networks, customers based on experiences of customers beyond purchase customer experiences that lead to the co-creation of value traditional concepts such as involvement and participation inadequate engagement more fully reflects the nature interactivity & experience when suppliers and customers interact, they are engaged in co-creation of value Grönroos - Marketing Theory,

8 Co-creation of Value: a 2-way process (Payne et al 2008) Value creating process of the customer Customer Learning & Relationship Experience Organisation supports the customer s process: thinking, feeling, behaving Engagement Platforms Value creating process of the supplier Organisational Learning & Relationship Experience Design

9 Engagement in Business & Marketing Engagement has always been important in understanding buyer seller relationships But in the last decade it has become a buzz-word in business Business media as well as social media One of the most frequent terms used in business journalism about..marketing relationships and service management superseding Involvement, Commitment, and Participation? Theme of numerous business conferences, seminars, round tables Job titles from managerial to executive levels, related to engagement (employee, customer) Commercial research (consulting companies) Hot topic in Business Blogging 350,000+ links on consumer/ customer engagement on Google Blog (January 2010)

10 Key concepts

11 # of Articles Engagement in Academic Marketing Service Mgt Literature Lagging GS Citations since 2016 Customer Engagement 3,780 Consumer Engagement 2,560 Brand Engagement 1, Consumer Customer Brand Total

12 Scopus Analysis

13 2. Theorizing about Customer Engagement: Defining the Conceptual Domain of Empirical Domain Theoretical Domain Theories in Use business practice discourse (conference papers, blogs, company reports) Bridging Theories marketing literature (how does engagement relate to other relational concepts, is engagement theoretically distinct?) Service Dominant Logic Paradigms General Theories social science disciplines (e.g., sociology, psychology, education, organisational behaviour)

14 What is Distinctive about the Theorizing Process? 1. Bridging practice to theory: integrating business practice (theories in use) with social science, management, marketing literature (bridging and general theories) a creative tension leading to managerial usefulness 2. Bridging theory to practice: using SDL to derive the engagement concept from foundational premises to fundamental propositions facilitating fuller empirical investigation of general theoretical structures 3. Academic collaboration: using a panel of 12 academic experts to refine and verify conceptual domain

15 Conceptual Domain (Fundamental Premises) FP1.psychological state, which occurs from interactive customer experiences within service relationships FP2.occurs within a dynamic, iterative process of service relationships that co-creates value FP3.plays central role within a social/ network of service relationships FP4.is a multidimensional concept (cognitive, emotional and behavioral dimensions) FP5.different conditions lead to differing levels of engagement Engagement is conceptually distinct from participation and involvement because they don t explicitly embody interactivity and experience

16 3. From Customer to Actor Engagement: From Dyads to Networks emancipation from the shackles of the dyad (and the myopia connected to this) (Storbacka and Nenonen 2011) call for research to investigate the underlying mechanisms that determine understanding and coordinating value creation in multi-actor network and collaborative contexts (Ostrom et al. s JSR 2015 ) need to extend the theoretical scope of engagement beyond the engagement subject of customers

17 DISPOSITION OF DIFFERENT ACTORS FP1 Chandler & Lusch (2015) Storbacka Kaj et al. (2016) Kumar, & Pansari (2015)

18 NETWORK AND PLATFORMS FP2 Engagement Access to network Access to network Breidbach et al. (2014)

19 ITERATION OF SERVICE RELATIONSHIPS FP3 Ecosystem Iteration 0 Iteration 2 Iteration n A A A Engagement platform Iteration 1 A A A Actor Engagement Network of actors Jaakkola & Alexander (2014)

20 CONNECTEDNESS IN ACTOR NETWORKS FP4 Frow et al. (2014)

21 INSTITUTIONAL CONTEXT IN ACTOR NETWORKS FP5 Practices AE Rules Symbols Context affects and is reciprocally affected by AE endogenous nature of context Koskela-Huotari & Vargo (2016) Orlikowski (2010) Vargo & Lusch (2016)

22 Conceptual Domain of Actor Engagement FP1 CE reflects a psychological state, which occurs by virtue of interactive customer experiences with a focal agent/object within specific service relationships. Disposition & Connections AE reflects an internal disposition, which occurs by virtue of interactive experiences resulting from connections with other actors and is manifested in engagement behaviors. FP2 CE states occur within a dynamic, iterative process of service relationships that co-creates value. Network & Platforms AE occurs within a dynamic process of networkcentric connections facilitated by engagement platforms, framed by institutional contexts. FP3 CE plays a central role within a nomological network of service relationships. Iteration of Service Relationships AE is embedded in an iterative process where its antecedents and consequences affect the internal disposition and external connections of actors in a network of service relationships. FP4 CE is a multidimensional concept subject to a context- and/or stakeholder-specific expression of relevant cognitive, emotional and behavioural dimensions. Connectedness in Networks AE is a multidimensional concept that comprises focal cognitive, emotional, social and behavioral dimensions FP5 CE occurs within a specific set of situational conditions generating differing CE levels. Institutional Context AE occurs within a specific set of institutional contexts and the actor s individual conditions, generating differing AE intensities and valence over time.

23 4. Exploring New Frontiers Evolutionary Phases Network/ Service System Perspective Phase 3 (2014 onwards) Broadening of conceptualization CE to AE Phase 4 (2016 onwards) empirical refinement in the conceptualizations & operationalization of AE Dyadic Perspective Phase 1 ( ) identification & conceptualization of CE and CEB Phase 2 (2012 onwards) empirical refinement in the conceptualizations & operationalization of CE/ CEB Conceptual Focus Empirical/ Managerial Focus

24 FP1: DISPOSITION OF DIFFERENT ACTORS. interactive experiences in specific contexts? manifest engagement behaviors change, maturation and/or termination over time? customer behavior outcomes Managers can identify customers, and other actors, with a disposition to engage, and can develop strategies to foster this engagement. Managers can develop strategies to encourage actorto-actor engagement in an organizational context. Managers can design interactive experiences to foster engagement with multiple actors. Managers need to identify and understand the connections of actors and actor groups collaborating within their network.

25 FP2: NETWORK AND PLATFORMS How is value created in networks through engagement patterns leading to value in a network? interfaces on physical and virtual engagement platforms design of engagement platforms boundary objects of an engagement platform Managers should revise their business models in order to engage with actors on their preferred or most effective engagement platform. Engagement patterns should be taken into account as primary activity patterns to create value for an organization. When designing a business platform, managers should develop strategies to facilitate AE efficiently for all actors joining this platform. Managers need to explore strategically, the degree of openness concerning their organizational boundaries which most efficiently orchestrates AE of various actors.

26 FP3: ITERATION OF SERVICE RELATIONSHIPS antecedents and/or consequences for specific types of actors explain relational phenomena in different service systems influence relational processes of different types over time? dynamics and cumulative effects Managers need to identify what drives engagement by relevant actors in their network, as addressing these antecedents may trigger engagement. Managers need to look beyond their immediate customers and understand also how suppliers, interest groups, or other types of actors become engaged. Managers of public and nonprofit organizations should explore how different types of stakeholders can be mobilized to engage around a common cause. Managers should track how the engagement of their key stakeholders develops over time, and design approaches to react to unwanted changes in the engagement cycle.

27 FP4: CONNECTEDNESS IN NETWORKS key drivers of actors cognitive, emotional, and behavioral dimensions relative importance of dimensions outcomes that occur across different institution-, networkand service ecosystem- effects of focal actor engagement dimensions are universally applicable across differing AE settings? Managers need to establish specific actions and activities that capitalize on and leverage these specific AE dimensions. Managers should allocate adequate resources to the actor and service related factors that facilitate the desired dimensions of AE for their offering. Managers are advised to identify the extent to which the various offerings in their portfolio are driven by the cognitive, emotional or behavioral dimension of AE. Managers should identify the factors which will engage customers peer groups with the firm s offerings.

28 FP5: INSTITUTIONAL CONTEXT influence of specific institutional arrangements different levels of the service system inter-relationships and associated outcomes experiences trigger changes outcomes are associated with different intensities Managers and policy makers should manage for the specific institutional arrangements that facilitate AE (e.g. reward actors with desired engagement behaviors) Managers must recognize that not all customers will be disposed to high engagement and provide offerings for different engagement intensities Managers should build organizational structures and processes to facilitate and support the interrelated nature of AE at all levels. Managers and policy makers need to recognize the potentially destructive influence of negative engagement and seek to isolate or mitigate this effect

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