ServiceFriday: Balancing New Technologies and Customer Value
Service technologies are constantly being created and improved, which can provide a multitude of new opportunities for businesses, customers and users. However, businesses tend to lean towards focusing too much on technological improvements, as opposed to customer value. How then can organizations continue to benefit from advancements provided by new technologies, while remaining mindful of the value created for a consumer?
In the article, “Future Service Technologies and Value Creation,” the author identifies a growing need for businesses to balance their focus between technology and customer. “The balance is between focusing too much on the technology in itself, where technology takes the representation of being the end rather than a means to an end, and customer or user value, where technology simply represents a means to an end” (Kristensson). Researchers tend to focus more on the technology and how to improve it, while how customers can “have an improved life as a result of the technology is something that has been treated as self-evident or up to the customer” (Kristensson). There is more excitement around new inventions, whereas customer value has always remained the same. Saving money, saving time, or having fun are all consistently attributed with customer value.
When businesses focus more intently on technological advancements with the belief that customers will be happy simply because it is new and improved, customer loyalty may suffer because of the failed attention to actual customer value. For example, Apple updates their software and devices regularly, but many of these updates are not noticeably beneficial to consumers. New super retina display on the latest iPhone provides more accurate color, referred to as “HDR” (high dynamic range). This is not an easily discernible change to the average consumer though, so they would experience almost no increase in value. Contrarily, Uber has used very minimal technological innovation, and yet the company has provided a substantial increase in customer value, as it allows people to conveniently save time and money when travelling.
The question companies asked in the past was how to make better products and how to persuade customers to purchase or use these at an increasing rate. However, businesses must avoid focusing on what new technologies customers may want, and focus more on how to better support their customers to reach “valuable outcomes in improved ways” (Kristensson).
To read the full article and more about how customer and user value can be improved by future service technologies, go to the Journal of Services Marketing. (A fee may apply.)