The dark side of value co-creation: value destruction


 

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The phenomenon of consumer value co-creation is currently one of the newest holy grails for firms. Entire books, classes and a lot of literature pay attention to it and many of the ‘new business promises’ employ this particular mechanism (Walker Smith, 2016). Examples are well-known business models such as Uber, Tinder, Airbnb etc. The focus of this phenomenon first rested on co-creation of the actual goods or services, but has recently shifted towards co-creation of value, experience or relationships (Vargo & Lush, 2004). As a result, marketing has switched towards the service-dominant logic, where the importance of service provisions are fundamental to economic exchanges (Vargo & Lush, 2004). The good or service itself is no longer the main value to consumers, but the perceived experiences enabled by this good or service is (Woodruff & Flint, 2006). This gives firms more opportunities to get close to their customers and earn their loyalty. Thus, at first instance value co-creation sounds like a clear road to success…

But what if consumer interaction between service systems do not only co-create value, but can also lead to value co-destruction?

This is exactly what Plé and Cáceres (2010) argue. Value co-destruction is the internal process between service systems resulting in a decline in value of at least one of them. Service systems in this context can be both an individual or organization, so the interaction of the one with the other should lead to one of the parties being worse off than before the interaction took place. This interaction can happen directly or indirectly through the integration and application of resources: either person-to-person or through appliances such as goods. So when does this value co-destruction occur?

The biggest factor leading to value co-destruction is a quite obvious one: the misuse of resources. This happens when the available resources are used inappropriately or unexpectedly in an interaction. Service system 1 can misuse its own or service system 2 his resources and vice versa. This misuse can happen accidentally or intentionally, where intentional misuse is usually employed to create value for the misuser and destroy value for the other party. Trust, perceptions and expectations are therefore very important when the two parties interact with each other.

As said in the beginning of this post, when we think of value co-creation we immediately think of the positive effects it is associated with. Increased customer involvement, satisfaction, loyalty and commitment have indeed been proven to result from customer co-creation (O’hern & Rindfleisch, 2010; Grisseman & Stokburger-Sauer, 2012). However, very few researchers have looked into the possible downsides of value co-creation. The risk of losing customers this way is highly likely, as 40% of customers who had a bad experience will discontinue doing business at the offending firm. (Dougherty & Murthy, 2009). To prevent nearly half of consumers from churning after a bad experience, it is therefore crucial that both parties communicate their expectations extensively toward another so value can be co-created instead of destructed.

Airbnb and Uber are great examples of value co-creation platforms using multiple measures to ensure service quality to its customers. Both firms make use of a 360 degree review system where both service systems are rated and reviewed and Uber drivers even get ‘fired’ if their reviews are not above a certain standard. In addition, Airbnb makes extensive use of pictures of its listings and e-mail contact between homeowner and guest straighten out customer expectations. By offering both parties the possibility to communicate expectations, value co-destructions should be prevented and the interaction should lead to the fruitful results we hear about continuously.

 

References:
Plé, L. and Cáceres, R.C. (2010) Not always co-creation: introducing interactional co-destruction, Journal of Services Marketing, Vol. 24 No. 6 pp. 430-437

– Dougherty, D. and Murthy, A. (2009) What service customers really want”, Harvard Business Review, Vol. 87 No. 9 p. 22-23
– Grissemann, U.S.and Stokburger-Sauer, N.E. (2012) Customer co-creation of travel services: the role of company support and customer satisfaction with the co-creation performance, Tourism Management, Vol. 33 No. 6 pp. 1483-1492
– O’hern, M. and Rindfleisch, A. (2010) Customer co-creation, Review of Marketing Research, No. 6 pp. 84-106
– Vargo, S.L. and Lusch, R.F. (2004) Evolving to a new service dominant logic for marketing, Journal of Marketing, Vol. 68 pp. 1.
– Walker Smith, J. (2016) The Uber-all economy of the future, The Independent Review, Vol. 20 No. 3 pp. 383-390
– Woodruff, R.B.and Flint, D.J. (2006) Marketing’s service-dominant logic and customer value, The service-dominant logic of marketing: Dialog, debate, and directions, pp. 183-195

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