Implementing effective customer participation for hedonic and utilitarian services

Abstract

Purpose A distinct view of customer participation in services classifies the characteristics of the participation process as experience- versus outcome-oriented, each of which affects customer participation success uniquely for different types of services (utilitarian vs hedonic). This study aims to investigate if service managers should differentiate and focus on distinct characteristics according to the service types. Design/methodology/approach Two consumer experiments serve to assess the potential moderating effect of service type on consumer preferences for experience- versus outcome-oriented forms of customer participation. Findings The two empirical studies affirm the proposed moderating effect of service type on the effect of experience- and outcome-oriented customer participation characteristics. Experience-oriented characteristics work better for hedonic than for utilitarian services, and one study confirms a stronger positive effect of outcome-oriented characteristics for utilitarian services. Research implications Further research should replicate the experimental findings with a field study. Furthermore, continued research could analyze the mediators of the interaction of co-production characteristics with the service type in greater detail. Practical implications Managers can design the characteristics of the customer participation processes according to the nature of the service (hedonic vs utilitarian) and, thus, maximize customers’ willingness to pay. Originality/value This study offers a new perspective on customers’ reactions to customer participation in services: depending on the service type or situation in which a service is being consumed, different customer participation characteristics lead to (financial) success.