[We’re pleased to welcome Martin Mende of Florida State University. Dr. Mende recently collaborated with Jenny van Doorn of the University of Groningen on their article “Coproduction of Transformative Services as a Pathway to Improved Consumer Well-Being: Findings from a Longitudinal Study on Financial Counseling” from Journal of Service Research.]
- What inspired you to be interested in this topic?
This paper is inspired by the novel paradigm of Transformative Service Research which is concerned with uplifting changes and improvements in consumer well-being. Clearly, credit counseling is a core area of TSR, because it is a service designed to (re)establish consumers’ financial well-being (e.g., by increasing their credit scores and decreasing their perceived financial stress). The relevance of financial counseling has sharply risen in the past decade, reflecting the financial strain that many households have been experiencing, especially related to the recession. Indeed, each year millions of consumers seek help in managing their debt from counseling agencies. We found it surprising that the effectiveness of credit counseling remains somewhat nebulous, and that the exact mechanisms through which counseling helps improve consumer well-being needed more research. Because the success of financial counseling depends heavily on the collaborative behavior of customers, we propose customer coproduction, defined as a customer’s participation in creating the service, as a pathway to financial well-being. Indeed, we find that customer coproduction can positively affect consumers’ objective financial well-being (i.e., an increase in their credit score) and their subjective financial well-being (i.e., reduce their perceived financial stress).
- Were there findings that were surprising to you?
The findings were probably more inspiring to us than they were surprising. Our research was guided by a theoretical framework that predicted certain outcomes, but it was inspiring and rewarding to see the positive effects of coproduction on consumer well-being (i.e., their increased credit score and reduced financial stress) emerge. The results show that success in credit counseling is truly about the collaboration between advisors and clients; clients (by getting engaged as coproducers) have considerable control about their financial strain. We feel this is a positive and encouraging finding, because many families may feel that they have lost control over their financial situation.
- How do you see this study influencing future research and/or practice?
We hope it helps financial service providers (e.g., credit counselors), public policy makers, and – of course – even consumers in credit counseling.
Our research offers implications for service providers with regard to (1) measuring customer profiles, (2) segmenting the customer portfolio and designing service delivery for specific segments, and (3) training and empowering employees. First, service providers who survey clients on their service literacy, involvement, and attachment style will be able to better understand and predict the collaborative relationship with their clients. Second, segmenting clients on the basis of these variables allows for customized service provision, which is a more promising pathway to coproduction and consumer well-being (e.g., clients could participate in segment-specific workshops that address their specific motivational needs and/or profiles). In parallel, our results show that segmentation criteria should also include some of our covariates (age, gender, or cohabitation). For example, credit counselors should be cognizant of our finding that the segment of female clients who live with a partner is likely to perceive considerably higher levels of financial stress than the segment of male clients who live alone. Third, employees who provide transformative services should be trained to understand the fundamental effects of coproduction on well-being, as well as the antecedents of coproduction. Furthermore, employees need to be empowered (or even incentivized) to treat client segments with different profiles in a tailored manner.
From a public policy perspective, our findings support the idea of improving consumers’ objective and subjective financial literacy because both constructs drive customer coproduction. Continuing the efforts on public financial education (e.g., educational offers in schools or community centers) is necessary. In addition, public policy makers should engage in efforts designed to increase consumer involvement. To do so, they can leverage traditional marketing tools. One example of such a policy effort is the “Questions Are the Answer” campaign, launched by the U.S. Agency for Healthcare Research and Quality to motivate patients to become more engaged when meeting with their doctors (e.g., by preparing questions before their appointment). This campaign integrated traditional advertising (e.g., television, radio, print) with an interactive website. Similar campaigns, albeit on a potentially smaller scale or targeted at specific consumer segments, can be designed to increase consumer involvement in other well-being settings (including financial counseling). Such campaigns would go beyond current approaches of merely providing self-educational tools (e.g., nfcc.org) and would train clients on how they can collaborate with service providers most effectively. In rolling out such campaigns, policy makers should collaborate with community-level entities (e.g., schools, employers, community centers, nonprofit organizations) to raise awareness of the positive impact well-being programs can have on consumers’ (financial) well-being if clients are involved. In line with this idea, our work has an important, final implication for consumers in credit counseling. Consumers who act as coproducers benefit in terms of their own objective and subjective well-being, a conclusion that is most inspiring.
You can read “Coproduction of Transformative Services as a Pathway to Improved Consumer Well-Being: Findings from a Longitudinal Study on Financial Counseling” from Journal of Service Research for free by clicking here. Want to get notified when Journal of Service Research releases new research? Click here to sign up for e-alerts!
Martin Mende is an assistant professor of marketing at Florida State University. His research focuses on service science, relationship marketing, transformative service research, and marketing strategy. His research has appeared in the Journal of Marketing Research, Journal of Service Research, and Journal of Business Research.
Jenny van Doorn is an associate professor of marketing at the Faculty of Business and Economics at the University of Groningen, the Netherlands. The main focus of her research is on customer relationships, customer engagement and sustainability. Her work has appeared in Journal of Marketing, Journal of Service Research, International Journal of Research in Marketing, and Harvard Business Review.