Customer Value Co-Creation through Reverse
Use of Customer Data


By Hannu Saarijarvi
January 2012
Tampere University Press
Distributed by Coronet Books Inc.

ISBN: 9789514485947
238 pages

$89.50 Paper original


Firms’ customer data usage is becoming more diverse. Instead of firms using customer data unanimously to serve their own purposes, customer data is being refined and given back for the support of customers’ value creation. This research addresses the emerging phenomenon by building a general framework for reverse use of customer data in the context of food retailing.

As a phenomenon, reverse use of customer data is still in its infancy. It is an underdeveloped area of research, which is why it is approached with caution and without any strict predefined schema. The focus is on exploring in detail the phenomenon and its context. A case study research is conducted on an Internet-based service application that provides customers with information about food healthfulness. The service combines point-of-sale data with nutritive substances of the groceries and gives the information back to customers for their own use. Data from multiple perspectives are generated and thematically analyzed. A set of basic principles that account for the research phenomenon are identified through four research questions. The research questions capture the fundamentals of reverse use of customer data and contribute to the building of the general framework.

Two well-established theoretical approaches compose the theoretical framework of the research: the customer relationship management (CRM) framework and the service perspective characterized by the recent advances in service theory. Value co-creation is used as a central concept of the research. Through dismantling it into its constituent parts a conceptual tool is developed: understanding what kind of value for whom (‘value’), by what kind of resources (‘co’), and through what kind of a mechanism (‘creation’) helps to both investigate the central characteristics of the research phenomenon and to synthesize the conceptual discussion beyond the boundaries of this research.

The general framework for reverse use of customer data is built as the result of a continuous interplay between empirical data and theory. It is based on three perspectives. First, the customer perspective describes how reverse use of customer data supports the customer’s value creation. A typology is constructed that captures the diverse ways (‘Playing’, ‘Check-pointing’, ‘Learning’, and ‘Goal-orientation’) in which the customer’s value creation is supported by the information resulting from reverse use of customer data. Also elements that determine the information’s value-creating ability are identified. Second, the firm perspective captures how reverse use of customer data contributes to the firm’s own value creation. Four themes are identified: increasing customer loyalty, differentiation and repositioning, corporate values and firm strategy, and firm image. Third, the general perspective uncovers elements that fundamentally constitute reverse use of customer data as a phenomenon in the research context.

A paradigmatic change in customer data usage is unfolding. The research illuminates this evolution by extending the CRM framework and establishing a service perspective to customer data usage; it redirects attention from firms’ internal use of customer data toward external use of customer data. The research introduces reverse use of customer data as a customer value co-creation mechanism through which firms can provide customers with additional resources, go beyond traditional exchange and reach out to customer context. Similarly, through mechanisms for firm value co-creation, such as co-production or co-design, additional customer resources can be engaged in the firm’s value-creating processes. Understanding the opportunities of different value co-creation mechanisms opens up a whole new spectrum of opportunities for reconfiguring firms’ value-creating logics, developing new service-based business models, and reinventing their roles as resource providers.

 

Acta Universitatis Tamperensis No. 1666

 

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