Customer participation risk management: conceptual model and managerial assessment tool

Abstract

PurposeCustomer participation (CP) has received considerable interest in the service literature as a way to improve the customer experience and reduce service providers' costs. While its benefits are not in question, there is a paucity of research on potential pitfalls. This paper provides a conceptual foundation to address this gap and develops a comprehensive model of the risks of customer participation in service delivery, integrating research from the marketing, operations and supply chain management, strategy, and information technology fields.Design/methodology/approachThe model is derived deductively by integrating insights from research in marketing, operations and supply chain management, strategy, and information technology.FindingsThis paper identifies three categories of potential risks of CP (i.e. market, operational, and service network) and discusses ways that firms can mitigate these risks. Building on the model, it develops a CP risk assessment tool that managers can use when evaluating increases in CP.Research limitations/implicationsThe conceptual model proposed in this paper can serve as a robust basis for future research in customer participation, particularly in such areas as sharing economy services, service delivery networks, and experiential services. The risk assessment tool offers clear guidelines for managers who are considering an increase in customer participation in their service.Originality/valueThis is the first attempt to conceptually define customer participation risk and develop a comprehensive model of its drivers and strategies to mitigate it. This paper develops a straightforward method for managers to evaluate CP risk.

Service delivery system design for risk management in sharing-based product service systems: a customer-oriented approach

“…The complexities and characteristics of B2C sharing-based PSS (e.g., triadic 'organization-customer-other customer' relationships, high heterogeneity of customers who play an enhanced role in the service production and delivery, absence of direct supervision) are likely to create various types of operational risks for organizations (Damali et al, 2020). For instance, Bardhi and Eckhardt (2012) show car-sharing users do not show care towards the cars, but rather abuse them and behave opportunistically.…”

“…As research on servitization shows, the transition from a product-to a more serviceoriented business model creates a set of significant operational challenges and risks for organizations, which urgently and carefully need to be addressed for the service success (e.g., Benedettini et al, 2015;Erkoyuncu et al, 2013;Neely, 2009;Sakao et al, 2013;Ulaga and Reinartz, 2011). PSS-based business models that enable the sharing economy introduce even more challenges and risks (Damali et al, 2020). Among others, organizations risk operational issues due to the highly complex delivery systems (Victorino et al, 2018) as well as to the heterogeneity of customers (Field et al, 2018).…”

From Value Co-Creation to Positive Experiences and Customer Satisfaction. A Customer Perspective in the Hotel Industry

“…Risk is a factor that can be contingent on the degree of Access. Risk considers the extent in which the information provided by the business clarifies the perils and liabilities associated with the business and its products (Damali et al, 2020). To access this level of Risk, customers as active co-creators require adequate information about the organization's internal processes, ethics, practices, and values to therefore assess the possible uncertainties of associating with the business or partaking in the co-creation process.…”

“…It is the firm's responsibility to inform customers of the advantages as well as the disadvantages of their products. This way, the firm dynamically supports customers to reach an informed decision and establishes trust between them; a component of customer satisfaction and retention (Damali et al, 2020). The contemporary business environment is characterized by networking and increased customer communication (Buhalis, 2019).…”

“…The timely provision of information about Risks through official communication channels allows customers to assess the quality of services and choose a hotel that provides specific information (Damali et al, 2020). If such quality meets customers' value perceptions, they are likely to select services from an honest company and have a superior guest experience (Ahmad et al, 2019).…”