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Customer influence on service productivity.

Article Excerpt
Introduction

Measuring service productivity is a challenge. Customers of a service company seldom receive only one service from a particular company, as the traditional definition for productivity assumes (see Sink 1985). Moreover, they can also directly influence the company's production process and outcomes. Indeed, several researchers have pointed out that customer participation in the service production process is strongly connected with service productivity (e.g., Fuchs 1968, Lovelock and Young 1979; Bateson 1985; Gronroos 1990, Ojasalo 1999). Customers are often present and active participants in service production, so viewing them as input resources is clearly a primary difference from the way inputs are understood traditionally. Due to customers' increasing opportunities to participate in and influence the production of a service, they cannot be regarded as passive recipients of the provider's outputs, but should be seen as an integrated part of the organization (Storbacka 1994).

An essential characteristic of service production is the complexity of relationships between service provider and customer (see Gronroos and Ojasalo 2000). Rather than specifying a single type of provider-customer relationship as the production input, four general types can be identified (see Gummesson 1993 and 1994): (1) the provider may produce the service in isolation from the customer, (2) the customer may self-serve, (3) the provider and the customer may produce the service in interaction with each other, and (4) the customers may produce the service between themselves. In such a boundary-free organization, the traditional way of defining productivity is clearly no longer valid (Devanna and Tichy 1990).

Due to the diversity and unpredictability of customer demands as well as the customer's onsite participation, service companies experience a high degree of input uncertainty (Bowen and Jones 1986). While it is possible to control the inputs and outputs of a closed system, service customer inputs are difficult to control. Sasser (1976) mentions that customers' roles create uncertainty with regard to the process' time, the product's quality, and the facility's accommodation of customer needs. In other words, inputs offered by customers may have a significant impact on service output (e.g., Cowell 1984; Zeithaml and Bitner 1996). Goodwin (1990) points out that service, productivity is highly dependent on customers' knowledge, experience, and motivation. If customers are motivated and able to use various self-service elements, the service company has to invest fewer inputs itself. On the other hand, if the customers cannot perform in a service situation, queues and delays may result, creating a negative impact on productivity.

Indeed, there is an evident need to increase the understanding of customer influence on service productivity. Based on extensive literature analysis, this paper introduces a conceptual framework to describe this phenomenon. It begins by analyzing the input side of the productivity ratio, reviewing how customers' roles as inputs and co-producers bring uncertainty to the productivity concept. Next, it analyzes customer effects on service outputs. After the literature analysis, a framework for managing customer influence on service productivity is developed.

Customer Influence on the Service Provider's Inputs

Customers' impact on productivity can be positive or...

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