Value in professional service relationships

Abstract

Purpose – Business to business (B2B) professional services depend on inter-firm cooperation for the co-creation of value. Such cooperation rarely happens overnight; it requires time for the relationship to develop. The purpose of this research is to investigate how different performance attributes of a professional service differ with the tenure of the relationship. Design/methodology/approach – This exploratory study utilizes seven years of longitudinal customer data provided by a B2B professional service firm. The firm's customers assess satisfaction, value, loyalty, performance quality and their image of the firm after each project. Findings – Data were classified into three tenure related groups – i.e. transactional, emergent and mature relationships. MANOVA and post hoc contrasts of the average attribute scores of the three groups were conducted. The data support the conclusion that high performance in professional services is evident in mature relationships. Research limitations/implications – Data come from company archives and reflect the firm's efforts for tactical management of client relationships, not independent informant reports from randomly selected accounts. Practical implications – Satisfaction surveys can be employed tactically by professional service providers to develop stronger relationships with their clients en route to co-creating extraordinary value from high levels of service quality and the client's high regard for the provider's professional qualities, such as expertise, customer focus and initiative. Originality/value – To the authors' knowledge, no one has shown empirically the dramatic performance advantage stemming from relationships. This is important because theory suggests that customer relationships hold strategic value. Because they are immobile and inimitable, they represent a potential sustainable competitive advantage. However, relationships take time to develop. This begs the question of whether they are worth the time and effort to develop. In the professional service context, where buyer and seller seemingly must collaborate to co-create value, mature relationships indeed yield higher performance, compared to transactional and emerging relationships.

Working together: understanding value co-creation processes in professional service delivery

“…New forms of interaction are superseding the conventional point of view on exchange of information. Regarding this point of view, the involvement of the client in value co-creation is considered and featured as a prerequisite for becoming and remaining competitive (Saarijarvi et al, 2013;Schertzer et al, 2013). From the value co-creation perspective, service providers and clients are no longer on opposite sides; they interact reciprocally for the development of new services, products and solutions, as well as new business opportunities.…”

Co-creation of Knowledge for Innovation Requires Multi-Stakeholder Public Relations

“…These articles deal with innovation projects with multiple stakeholders that are initiated and lead by a single actor looking for better business: Kazadi, K., Lievens, A. & Mahr (2016) Stakeholder co-creation capabilities in generating valuable knowledge Burdon, Mooney, & Al-Kilidar (2015) Identify requisites needed in building high value cocreation alliances Edvardsson, Meiren, Schäfer, & Witell (2013) Strategy for interacting with the customer Katzy, Turgut, Holzmann, & Sailer (2013) Strategy of exchange across stakeholder boundaries Schertzer, Schertzer, & Dwyer (2013) High-performance relationships over Pino, M., Plichart, M., Kerherve, H., Bouilly, C. & Rigaud (2012) Multi-stakeholder partnerships for the co-production of innovations Tokman & Beitelspacher, (2011) Supply chains as value co-creation networks Table 5: Articles on Co-creation projects benefiting business-to-business value chain networks These articles focus on needs based aims, facilitation and practical cooperation tools and methods. Facilitation is ideally guided by facilitation strategy.…”

“…(2) emergent; and (3) mature relationships (Schertzer et al, 2013). The service development strategy and activities in a new service development process should take into account that services are activities and interactions, which are carried out by not only by service providers, but also by customers, and other network actors (Edvardsson, et al, 2013).…”

“…al., 2013) -Open innovation as a strategy of exchange across firm boundaries can benefit from innovation intermediaries (Katzy et. al., 2013) -Inter-firm relationships and cooperation for the cocreation of value require time to develop (Schertzer et. al., 2013) Challenges: -Misunderstandings and differing expectations (Burdon et al, 2015) -Businesses struggle to retune their business model towards innovation (Burdon et al, 2015) -Contrary to management belief: a service development strategy is needed to improve new service development performance (Edvardsson et.…”

“…al., 2013) Challenges: -Misunderstandings and differing expectations (Burdon et al, 2015) -Businesses struggle to retune their business model towards innovation (Burdon et al, 2015) -Contrary to management belief: a service development strategy is needed to improve new service development performance (Edvardsson et. al., 2013) -Firms need to recognize , and to accommodate to the differing needs of newly acquired and longer-term customers (Schertzer et. al., 2013) in Sarah Bowman, Adrian Crookes, Stefania Romenti, Øyvind Ihlen (ed.)…”