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Linking service design to value Value creation

and service
creation and service research research
Tor Wallin Andreassen
Center for Service Innovation (CSI), 21
Norwegian School of Economics, Bergen, Norway
Per Kristensson Received 29 April 2015
Department of Psychology, Service Research Center, Revised 29 April 2015
Accepted 1 May 2015
Karlstad University, Karlstad, Sweden
Line Lervik-Olsen
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Norwegian Business School, Oslo, Norway and

Center for Service Innovation (CSI),
Norwegian School of Economics, Bergen, Norway
A. Parasuraman
School of Business, University of Miami, Coral Gables, Florida, USA
Janet R. McColl-Kennedy
UQ Business School, The University of Queensland, Brisbane, Australia
Bo Edvardsson
CTF-Service Research Center, Karlstad University, Karlstad, Sweden, and
Maria Colurcio
University of Magna Graecia di Catanzaro-Italy, Catanzaro, Italy

Abstract
Purpose – The purpose of this paper is to develop a framework for understanding service design and
how service design relates to central concepts within service marketing.
Design/methodology/approach – For companies, service design is growing in importance and has
become a crucial capability to survive in the service-dominant economy. Service design increases the
capacity to improve not only service experiences but also organizational design. On this premise,
the authors propose a conceptual framework.
Findings – By relating service design to research efforts within service marketing, dual value creation
can be enhanced. As such, the conceptual framework portrays service design as an enhancer of
customer experience and organizational performance.
Originality/value – To the authors knowledge, service design has not been discussed in the service
marketing literature. Thus, this is the first attempt to see service design in light of well-established
service marketing models such as SERVQUAL and an updated version of the Service-profit-chain.
Keywords Service innovation, Service research, Customer experience, Service design, Design thinking
Paper type Conceptual paper

Introduction
According to Aksoy (2013) the two most tracked measures regarding customer
behavior are customer satisfaction and likelihood to recommend. From the customer’s
perspective though, expectations concerning service quality and satisfaction have Journal of Service Management
been increasing, thereby making the experience of value creation a top priority for Vol. 27 No. 1, 2016
pp. 21-29
organizations across all sectors. A focus on customer satisfaction and service © Emerald Group Publishing Limited
1757-5818
quality, which used to be the ticket to play and stay, is no longer enough in today’s DOI 10.1108/JOSM-04-2015-0123
 JOSM increasingly demanding markets. Instead, service innovation is the new ticket, with
27,1 service design emerging as a critical mindset that organizations need to master in
order to innovate successfully.
Service design has been defined as the activity of planning and organizing people,
infrastructure, communication, and material components of a service in order to
improve its quality and the interaction between service provider and customers
22 (Mager, 2009). However, due to its increasing popularity and applicability in service
research, a newer understanding of service design adopts a broader perspective – one
that emphasizes the involvement and understanding of users and their context,
including service providers and social practices, and translates this understanding
into the design of service systems (Patrício et al., 2011). With its focus on the within-
customer experience (Zomerdijk and Voss, 2010), service design can aid providers in
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their efforts to become more customer centric. Given the growing prominence of
service design, in this note we highlight how:
(1) service design relates to well-established concepts within the domain of service
research;
(2) service design implies an emphasis on co-creation of value; and
(3) service design can improve consumers’ work-life balance, i.e. return on time
(ROT).

Service design and its growing importance

In their quest to develop an attractive and sustainable market offering, service leaders
have increasingly turned to service design and design thinking (Brown, 2008). For
manufacturers of goods, design thinking typically came in during the final stages of the
innovation process by making new products and technologies aesthetically attractive
and therefore more desirable.
As manufacturing economies in the 1990s started to be replaced by service
economies (Brown et al., 2009), service design has become prominent in creating
value for customers. The reason is the transition in focus, from aesthetics and
product-orientation to understanding why customers buy a particular service solution
(i.e. a focus on value creation). Thus, in order to understand the value in use, businesses
are confronted with a major challenge to better understand the processes and context
that affect the customer’s experience. Today, service design, and what is typically
referred to as design thinking (Stickdorn and Schneider, 2010), is being employed to
create experience-centric services (Zomerdijk and Voss, 2010).

Service design, service quality, and organizational performance

For private, for-profit firms, the focal construct of performance is most often measured
as attitudes (e.g. Oliver and Bearden, 1985; Moorman et al., 1992), loyalty intentions
(e.g. Bemmaor, 1995; Reichheld, 1993), loyalty behaviors (e.g. Reichheld and Sasser, 1990;
Jones and Sasser, 1995), or customer financials (e.g. Miglautch, 2002; Keiningham
et al., 2005; Reinartz and Kumar, 2000). According to Fornell (1992), customer
satisfaction is an antecedent of all these measures. Building on Fornell’s (1992)
quality → satisfaction → performance framework, we perceive service quality as
antecedent to customer satisfaction. Considering the growing importance of service
design, we further posit service design as an antecedent of service quality, especially in light
of its crucial role in creating customer experiences that are based on understanding and
 interpreting customer encounters and interactions with service providers in a service Value creation
system (Patrício et al., 2008; Pinho et al., 2014). and service
Parasuraman et al. (1988) operationalized service quality through the SERVQUAL
measurement instrument consisting of five dimensions: reliability, assurance,
research
tangibles, empathy, and responsiveness (RATER), with the last two, in particular,
directly relating to frontline employees’ interactions with customers.
While finer-grained measurement instruments for both off-line and online service 23
quality have since been developed e.g. E-S-QUAL (Parasuraman et al., 2005), the same
cannot be said about measures for service design. Early contributions on service design
(Shostack, 1982, 1984) considered it as part of the marketing and management disciplines.
Shostack (1982), for instance, proposed an integrated design process involving tangible
components (products) and intangible components (services). She further suggested that
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this process can be codified using a “service blueprint,” which systematically maps the
sequence of the various events/functions involved in the process. Much work has been
done on service blueprinting since then with Bitner et al. (2008) being a prominent
example. In a similar fashion, service design relies on methods to incorporate elements of
utmost importance to the user, such as interaction between actors, duration of the
interaction, and the sociotechnic context where value takes place (Wetter-Edman et al.,
2014). The core of service design, termed design thinking, represents a solution- or
experience-focused means of interpretation that puts the customer first and the
organization second. On the basis of design thinking, various scholarly disciplines
anchored in antrophology, etnography, and psychology have developed methods for
enabling an understanding of the customer experience (Plattner et al., 2010). Examples of
methods that rely on design thinking include customer journey, empathic design, and
personas and day reconstruction method (Kahneman et al., 2004). The service-blueprinting
technique, mentioned before, is also consistent with the design thinking principles.
In short, design thinking methods capture aspects such as the following:
• Identification of all the actors involved in the enabling and use of a service.
• Understanding the users, in terms of needs and wants, empathy for their
situation, and analysis of context of use, including the broader service system.
• Representation of the service, using techniques that incorporate all the
components of the service, including physical elements, interactions, logical links,
and temporal sequences.
To sum up, from the above discussion we argue that service quality is an antecedent of
customer satisfaction and organization performance, where service design thinking serves
as an enhancer of perceived service quality and customer (or user/patient/client/member/
citizen) satisfaction. Using the RATER-framework, we capture this view in Figure 1.
Figure 1 implies that service design serves as a value-enhancer of quality in order to
enable and enhance the service experience from the customer’s point-of-view. Design
thinking allows the firm to see through the eyes of the customer – which, more often
than not, leads to different solutions than if using the traditional organizational
perspective. We argue that service design functions as a lens on various touch points
along a customer’s journey, taking the customers’ perspective and representing an
outside-in approach, which enhances the overall customer experience. Normann’s
(2001) suggestions concerning customers’ capacity, time and vision (i.e. goal) could also
be employed if researchers want to incorporate additional inherent aspects of service
design (we elaborate on the time aspect at the end of this research note).
 JOSM
Service design
27,1
Reliability

24 Assurance

Tangibles Customer Organizational

experience performance
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Figure 1. Responsiveness

Service design
as a turbo-charger of
quality, experience,
and performance Empathy

Service design and organizational change

The importance of customer focus in various marketing activities was recognized in the
early 1950s by researchers such as Drucker (1958) and Levitt (1960). But it was only in
the 1990s that research pertaining to customer-centricity gained momentum. For
example the service-profit-chain model (Heskett et al., 1997) illustrates conceptually how
the inside of a company, i.e. organization and employees, impacts the outside, i.e.
customers’ experiences and performance. According to Shah et al. (2006), an organization
transforms from one state, e.g. product centric, to another, e.g. customer centric, through
changes in four factors: process, structure, culture, and financial metrics. The true
essence of the customer-centricity paradigm lies in creating value for customers and, by
doing so, creating value for the firm, i.e. dual value creation (Boulding et al., 2005).
We believe that service design, especially with its broader focus on service system design
(Patrício et al., 2011) and design thinking, with its tools and techniques for enabling
interpreation of users and their context (Miettinen, 2009), can be employed to enhance
process, structure, and culture in creating value for customers. Building on Andreassen
and Lervik-Olsen’s (2015) adaptation of the service-profit-chain model, Figure 2 illustrates
how service design might facilitate organizational change and contribute to enhanced
value creation at various internal and external touchpoints.
Reading Figure 2 from right to left, organizational performance is a function of
customer experienced value. In our view, service managers decide on the experience
they want customers to have when designing the service concept and offer. How virtual
(e.g. E-S-QUAL-based) and physical (e.g. RATER-based) touch points are designed is
crucial for the customer experience. The quality of a customer’s service encounters
(i.e. moments of truth) in a virtual or physical channel, in turn, depends on how well
the channel’s interface with service personnel is designed. In this regard, the design of the
touchpoints between support and frontline personnel is important, as is the design of how
those personnel interface with the firm’s internal IT systems and procedures. We further
posit that the firm’s organizational structures, processes, and culture will be impacted by
implementing an outside-in perspective in service design. Thus service design can and
 Internal resources Moment of truth External results Value creation
Internal Personnel
and service
Service delivery
quality satisfaction research

Customer experience
IT systems

Organizational
Virtual

performance
Support (E-S-QUAL)
25
Service

Service

Service
Admin.
design

personnel

design

design
proce- Service
dures design
Physical
Front Line
(RATER)
personnel Figure 2.
Service design for
Organizational change (structure, process & organizational
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culture) change and

enhanced value
Service design creation

does have a crucial role to play at various stages of the chain of events leading up to
customer experienced value and organizational success. The outside-in perspective in
service design is important because it starts with the customer’s desired experience,
following which various organizational processes are designed to be consistent with that
experience (Fitzsimmons and Fitzsimmons, 2000; Manning and Bodine, 2012). In our
proposed framework, service design anchored in an outside-in perspective focuses
primarily on customer value creation – rather than on customer service per se – and
pervades all stages of the process leading up to customer experience. As such, the
framework helps explain how companies with strong focus on efficiency and only limited
focus on customer service can still be highly successful. Such companies start by focusing
on customers for who low cost is the most important, if not sole, concern, and then
designing all antecedents and aspects of service delivery to be consistent with that focus.

Service design and customer co-creation of value

According to the service-dominant logic, customers integrate their resources (knowledge
and skills) with those of the service provider in order to reach a goal that is relevant to them
(Vargo and Lusch, 2004). The customer is thus always a co-creator of value. In contrast, the
traditional goods-dominant logic views value as something that can be created beforehand,
without any co-creation contribution from customers. The service-design perspective
proposed in this note emphasizes the important role that the customer plays both in
shaping the customer experience and co-creating value (McColl-Kennedy et al., 2012).
Firms need to be cognizant of the activities that customers are responsible for and
provide them with the necessary support so they can perform the co-creation as effectively
as possible. Design thinking and the use of an appropriate service design can help firms
ensure that customer needs are well-integrated into the process of developing the service
offering, especially since customers have knowledge about use and are often the main
integrators of the resources required for creating the service offering. The service literature
makes a cogent case for companies to involve their customers in co-creation during the
service innovation process: for example, the customer’s ideas and input are often more
creative and valuable than the inputs found within the company (Kristensson et al., 2004;
Witell et al., 2011). Also, the true inventors of service organizations such as weight
watchers, and several novel banking services, have been customers (Oliveira and von
 JOSM Hippel, 2011). In this way, open and democratized innovation processes (Chesbrough, 2011;
27,1 von Hippel, 2005) fit well with the service design approach that we advance in this note.

Service design and customers’ need for improved individual well-being – return-on time
To illustrate how a service design perspective can enhance value creation for customers’
individual well-being, we introduce the notion of return on time, which pertains to “a goal
26 oriented behavior targeted at acquiring and spending time over a set of chosen activities
with the purpose of increasing subjective well-being” (Andreassen et al., 2015).
Consumers can acquire time through two mechanisms: saving time by, for example,
multi-tasking, motivating other people, altering their own priorities, etc.; and buying time
by investing in machines and technology, or buying services such as laundry, gardening,
and food delivery. The freed-up time from saving or buying time can be invested in other
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activities (e.g. family, work, one’s self) that improve individual well-being. From a service
innovation perspective, the general idea is that consumers will seek new solutions that
will improve their well-being. In this respect, ROT serves as a proxy for well-being.
Service design is important as it helps customers understand how ROT can be
meaningful for them. Service design also informs firms about how to design their value
propositions in order to provide opportunities for such ROT experiences. In short, service
design can help improve customers’ output (i.e. benefits gained) relative to their input
(i.e. resources invested) when measuring their productivity (Parasuraman, 2002).
ROT is a subjective construct because its meaning will differ depending on where
one is in his/her life. Andreassen et al. (2015) propose three stages in life: “Young, free,
and simple” (Empty Nest 1), pertaining to people who want to get the most out of their
social life. Services that improve “quantity of life” will be preferred at this stage. The
second stage is “Chaos in My Life” (Full Nest), referring to people striving to simply
cope with their daily lives. Services that improve efficiency and effectiveness will be
preferred at this stage. The third stage is “Got My Life Back” (Empty Nest 2), denoting
people seeking quality rather than quantity of life. Services that cater to experiences
will be preferred at this stage. We argue that service-designers who best understand
the service preferred by each segment will be the preferred providers for helping
customers improve their ROT. As such, in a context where customers have a goal of
maximizing ROT service design becomes especially critical in developing service
offerings that customers will have a high probability of adopting.

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About the authors

Tor Wallin Andreassen is a Professor at the Norwegian School of Economics and Director at the
Center for Service Innovation (CSI). Including five books, he has published in journals like
the Journal of Marketing, Marketing Science, Journal of Service, and won several research awards.
In addition to sitting on five review boards like the Journal of Service Research, he is the AE/
Expert Research Panel Chair-Innovation of the Journal of Service Management. His research
interests are service innovation and customer experiences. Tor Wallin Andreassen is the
corresponding author and can be contacted at: [email protected]
 Per Kristensson is a Professor at the Service Research Center, at the Karlstad University – in Value creation
Karlstad, Sweden. Dr Kristensson is also Professor II at Norwegian School of Economics (NHH)
Center for Service Innovation (CSI) in Bergen, Norway. Dr Kristensson’s research mainly focuses on
and service
service management, service innovation, and various aspects of customer experience. Dr Kristensson research
received the Best Paper Award at Quality in Service, QUIS 12, and International Product
Development Management, IPDM 12 and was the runner-up for Best Article Award 2004 for Journal
of Service Research. He won the Grand Prix speakers award at the Karlstad University in 2013.
Line Lervik-Olsen is an Associate Professor of marketing at the Norwegian Business School. 29
Dr Lervik-Olsen has been the research leader of the Norwegian Customer Satisfaction Barometer.
Her work is published in journals such as the Journal of Service Research, the Journal of Economic
Psychology, Journal of Service Management, Managing Service Quality as well as in books.
A. Parasuraman is a Professor and Holder of the James W. McLamore Chair in Marketing
at the School of Business, the University of Miami. His research focuses on service quality
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assessment and improvement, service innovation, service productivity, and technology’s role in
marketing to and serving customers. He has published extensively in leading scholarly journals,
written a textbook on marketing research, and co-authored a number of research monographs
and three business books. He is affiliated with several service research centers around the world
and is a frequent speaker at international conferences.
Janet R. McColl-Kennedy is a Professor of Marketing in the UQ Business School, The
University of Queensland, Brisbane, Australia. She is recognized internationally as a leading
researcher in Service Science. Her research interests include service recovery, customer
complaining behavior, customer rage, customer experience, and customer value co-creation. She
has published articles in the Journal of Retailing, Journal of the Academy of Marketing Science,
Leadership Quarterly, Journal of Service Research, California Management Review, Psychology &
Marketing, Journal of Business Research, Marketing Theory, Journal of Service Management,
Journal of Marketing Management and Industrial Marketing Management. Dr McColl-Kennedy
has received several research awards including best paper and highly commended paper awards.
Bo Edvardsson is a Professor and Founder, CTF-Service Research Center, and Vice Rector,
THE Karlstad University, Sweden. In 2008, he received the RESER Award “Commendation for
lifetime achievement to scholarship” by The European Association for Service Research and in
2004 The AMA Career Contributions to the Services Discipline Award. In 2013 Bo was appointed
Distinguished Faculty Fellow of the Center for Excellence in Service, the University of Maryland
and Honorary Distinguished Professor of Service Management, EGADE Business School,
Monterrey Tech, Mexico. His research includes new service development and innovation,
customer experience, complaint management, service eco-systems and transition from product to
service in manufacturing.
Maria Colurcio is an Associate Professor of Marketing in the University of Magna Graecia of
Catanzaro, Italy. Her research interests include resource integration in value co-creation, social
innovation, creativity and innovation, interactive technologies for value co-creation. She has
published several articles in both Italian and international journals. She has received several
research awards including the “outstanding paper award 2013” from the Emerald Literati Network.

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[Crossref]
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