From selling products to supporting customer’s value creation through the nutrition code,” hannu saarijärvi and hannu kuusela, university of tampere, finland, and p.k. kannan, university of maryland, usa

Redefining the Use of Customer DataHannu SaarijärviRedefining the Use of CustomerData at a Finnish Food RetailerFrom Selling Products to Supporting Customer’sValue Creation Through the Nutrition CodeHannu Saarijärvi, University of Tampere, FinlandP.K. Kannan, University of Maryland, USAHannu Kuusela, University of Tampere, Finland2Redefining the use of customer dataHannu SaarijärviIntroduction•Traditionally customer data has been used first and foremost for the benefitof the firm• segmentation, cross-selling, customer profiles, identifying mostprofitable customers etc.•As firms are shifting focus from selling goods to supporting customer’s valuecreation, the conventional role of customer data is challenged•Firms are able to support customers’value creation through giving customerdata back to the customers•Thus, customer data is used not only for the firm’s benefit but also for thebenefit of the customer; customer data is used to provide customers withinformation that they find useful in their own value creationà innovative use of customer data results in information that can beused as input to customer’s value creation3Redefining the use of customer dataHannu SaarijärviPurpose of the study•To build a general framework for the innovative use of customerdata resulting in information that can be used as input tocustomer’s value creationI.focus on expoloring how customers use the information in theirvalue creationII.focus on exploring what customers value in the informationIII. focus on exploring what eventually constitutes the innovativeuse of customer dataIV. focus on exploring what motivates the firm to providecustomers with such information4Redefining the use of customer dataHannu SaarijärviTheoretical framework• Theory to give guidance, not to act as a straitjacket (Gummesson 2002)• Service (-dominant) logic• understandingthe customer’s value creation(e.g. Vargo and Lusch 2008;Grönroos 2008)• Customer Relationship Management• understanding the role of customerdata in building long-term customer relationships• Combining service (-dominant) logic with CRM in order to understandcontemporary marketing phenomenon• in order for value to be actualized, in addition to goods and service, otherresources (such as information) is needed (e.g. Grönroos 2008)5Redefining the use of customer dataHannu SaarijärviCase description - Nutrition Code• Nutrition Code combines the customer’spoint-of-sale data with the nutritionalsubstances of the groceries and as aresult, provides customers with informationabout the healthiness of their groceries• The service compares the customer’snutritional profile with therecommendations provided by theauthorities• Then, through the service(www.nutritioncode.com) customers areable to monitor the healthiness of theirgroceries and even get advice on how toenhance the quality of their diets6Redefining the use of customer dataHannu SaarijärviMethodology• An in-depth qualitative case study research was conducted focusing on aninternet-based service application - the Nutrition Code• Focus on understanding a contemporary marketing phenomenon throughthe case study setting.Altogether 3 semi-structured interviews with the representativesInterviews with firmof both the retailer and the company responsible for therepresentativesdevelopment of the Nutrition Code. Focus on understanding thefirm perspective to the innovative use of customer data.Altogether 456 pieces of customer feedback data focusing onCustomer feedbackuncovering what customers considered as good or bad in thedataNutrition Code; what is valued in the information provided by theNutrition Code.Altogether 16 interviews with the users of the Nutrition Code.Customer in-depthFocus on understanding how information is used in customers’interviewsvalue creation.7Redefining the use of customer dataHannu SaarijärviResults•Three distinct perspectives emerged from the empirical data that create the basisfor the innovative use of customer data:1) The customer perspective - supporting customer’s value creation• identifies the variety of ways how customers use the information as input totheir own value creation; identifies what is fundamentally valued in theinformation (the information is about the customer and for the customer)2) The firm perspective - supporting firm’s value creation• the role of customer loyalty, differentiation and repositioning, corporate valuesand strategy, and firm image as main motivators for the firm to providecustomers with information that is based on innovative use of customer data3) The phenomenon perspective - constituting innovative use of customer data• identifying elements that eventually constitute the innovative use of customerdata; e.g. increasing demand for information about food healthiness8Redefining the use of customer dataHannu SaarijärviResults•Through redefinition and innovative use ofcustomer data firms are able to supportcustomers’value creation (customerperspective)•Providing customers with information thatcan be used as input to their value creationalso results also in supporting the firm’svalue creation, for example, throughincreased levels of customer loyalty (firmperspective)•The information must be about the customer(e.g. based on point-of-sale data) and forthe customer (e.g. information about foodhealthiness) (phenomenon perspective)9Redefining the use of customer dataHannu SaarijärviSummary - redefining customer data• defining customer data from the customer’s point of view; how customer data can beused as a basis for providing customers with information that can be used as inputto their value creation• from one-way use of customer data towards two-way use of customer data - givingcustomer data back to the customers• from internal to external use of customer data; from firm benefit to customer benefit• from selling of products to supporting customer’s value creation through informationprovision• information is exchanged for customer’s loyalty (instead of exchanging only goodsfor money)• understanding the possibilities of customer data in supporting customer’s valuecreation; identifying the customer, the firm, and the phenomenon perspectives10Redefining the use of customer dataHannu SaarijärviThank you!• Grönroos, C. (2008), ”Service logic revisited: who creates value? Andwho co-creates?”, European Business Review, Vol. 20 No. 4, pp. 298-314.• Gummesson, E. (2002), ”Practical value of adequate marketingmanagement theory,”European Journal of Marketing, Vol. 36 No. 3,pp. 325-349.• Vargo and Lusch (2008), ”Service-dominant logic: Continuing theevolution,”Journal of the Academy of Marketing Science, Vol. 36 No.2, pp. 1-10.