What Service Innovators Can Learn From Coproduction in Prolonged Complex Services

By Jelena Spanjol

While frontline employees are critical in creating positive service encounters, many customers are left to their own devices to fully extract the potential value from a service. Across industries such as education, personal finance management, and healthcare, customers are the primary agents in the production of value from services provided by companies. For example, while a university might staff the classrooms with excellent faculty and administrative functions with well-trained employees, the value of a higher education is to a large extent created by the students themselves, through everyday dedicated learning, attending classes, etc. Similarly, financial advisors and counselors might have the best advice and tools to offer their clients to save for retirement and college funds, but customers have to do the hard work of cutting down on expenditures and persisting in budget planning and implementation. It is not surprising, then, that many college students do not finish their degrees[1] and many consumers of financial services firms do not achieve their goals[2].

Our research focuses on such prolonged and complex service encounters, where consumers are required to contribute resources (time, effort, etc.) and do so well beyond the immediate interactions with the service provider. We were particularly interested in exploring three major questions:

  • How do consumers experience such extensive service coproduction mandates?
  • What challenges do consumers face in their coproduction attempts?
  • What strategies and tactics do consumers use to successfully coproduce services over the long run?

To generate insight into the dynamics of complex and prolonged service coproduction, we focused on the healthcare services industry. This industry was particularly suitable for our inquiry, since healthcare services are predominantly consumed by individuals with chronic illnesses. The Robert Wood Johnson Foundation reported in 2010 that 93% of all prescriptions are filled and 79% of all physician visits in the U.S. are made by chronically ill patients, with an increasing trend. At the same time, about 50% of medications prescribed to manage chronic diseases are not taken as recommended, resulting in premature death, preventable hospitalizations, and $290 billion of avoidable annual medical spending according to New England Healthcare Institute. In this context, coproduction is critical in order to generate value from healthcare services. However, such coproduction reflects a continuous and laborious effort by consumers.

We conducted qualitative, depth interviews with hypertensive adults in order to understand how prolonged and complex service coproduction might be more successful. What we found indicates that consumers engaged in ongoing coproduction must develop a system that is contextualized in order to effectively integrate interdependent coproduction behaviors.

A contextualized coproduction system reflects and leverages the enmeshed nature of service coproduction in a consumer’s daily life. This encompasses coproduction behaviors that are defined by their scope as well as their temporal intervals and regularity. For example, finding the most effective pill containers, having medication refill routines in place as well as having a different set of routines for traveling or unexpected visits to one’s home, represent three different types of coproduction behaviors which, together, construct an effective coproduction system. The totality of the co-production system helps consumers prevent disruptions that otherwise might compromise their coproduction efforts.

Our findings have two critically important implications for service providers in education, financial management, and healthcare. First, many standardized tools that service providers offer to their consumers will fail to adequately help consumers in their coproduction efforts, if they do not take into account each consumer’s unique living condition, daily rhythms, social interactions, etc. For example, the standard pillboxes often don’t work for consumers, since they don’t fit into the enactment of coproduction behaviors. Customized and tailored partnering between service providers and consumers is paramount. Innovative solutions must not aim at improving coproduction per se, but rather at helping consumers discover the characteristics of their environment and existing behavioral patterns that impinge on coproduction efforts. In other words, supporting the development of tailored coproduction tools by consumers themselves, based possibly on a set of modular templates, would be much more fruitful for service providers to focus on.

The second implication stems from our finding that coproduction behaviors are interrelated and interdependent. Service providers should therefore develop specific coproduction behavior monitoring capabilities that support consumers in recognizing (and doing so more quickly) when their coproduction efforts are falling short and endangering the entire system. Innovative solutions will be aimed at supporting, not educating consumers. By deeply understanding what it truly means for consumers to coproduce prolonged and complex services, providers face a tremendous opportunity to create innovative new service components and truly enhance consumer wellbeing.

[1] The US Department of Education reports that only “59 percent of first-time, full-time students who began seeking a bachelor’s degree at a 4-year institution in fall 2007 completed the degree at that institution by 2013” (https://nces.ed.gov/fastfacts/display.asp?id=40)

[2] In an April 2012 survey of over 1,000 consumers who have retirement savings accounts, conducted by State Street Global Advisors and Boston Research Group, 78% reported knowing that saving more toward retirement is important and 83% reported being able to cut their household expenses by at least 5% to increase their retirement savings rate. However, only 33% of all respondents reported knowing how to go about increasing their retirement savings.

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The research Jelena Spanjol and her colleagues completed focusing on the topic of co-production in prolonged negative services was published in the Journal of Service Research as part of the Journal’s special issue on Transformative Service Research.

3 thoughts on “What Service Innovators Can Learn From Coproduction in Prolonged Complex Services

  1. Lance A. Bettencourt

    Thanks for the post, Jelena. Most research I see on customer co-production views it very narrowly in terms of interactions with the service provider. It is good to see your work going well beyond this. However, once you step beyond the boundary of an interaction with the service provider, the distinction between product and service itself becomes moot. A company that makes products that are intended to support hypertensive adults, for example, would need to understand the context and challenges of coproduction just the same as a service company would. My consulting takes this viewpoint and I have conducted hundreds upon hundreds of interviews with customers to understand the specific challenges of customers who must partner with product and service products in domains as far ranging as education, healthcare, nutrition, personal finances, selling cars, personal hygiene, and surgery. For more on this perspective, check out the CMR article with Bob Lusch and Steve Vargo (http://sdlogic.net/uploads/3/4/0/3/34033484/cmr5701_03_bettencourt.pdf). I’d be happy to chat about the overlap of our work as well.

    Reply
  2. Loïc Plé

    Dear Jelena,

    Many thanks for this post. I have to admit that I had not seen this paper earlier, and the content is really, really interesting! The way that the research comprehends the whole context of the service experience is highly important indeed. You results also point, it would seem, to the high risks of value co-destruction that may occur in such services characterized by high levels of interactions. This is something that was developed with Ruben Chumpitaz in a 2010 paper http://www.emeraldinsight.com/doi/abs/10.1108/08876041011072546 – a concept that has been recently considered by service experts as one of the top coming topics in a study published by Ostrom, Parasuraman, Bowen, Patricio and Voss in a 2015 JSR paper (http://jsr.sagepub.com/content/18/2/127.abstract). If you are interested in that, I’d be more than glad to exchange with you on this topic! 🙂
    Thanks again!

    Reply
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