Characteristics of Effective Investment Evaluation Methods for Servicescape Intangible Value Quantification

Abstract

Servicescape upgrades are often regarded as improvements to the intangible aspects of business performance, such as an increased sense of place, levels of comfort, safety, pleasure, inspiration, and satisfaction for both customers and employees. This presents a significant challenge for facilities managers who must convince the top management, particularly the finance department, that a proposed service scape upgrade will yield financial benefits for the business. Although investment return evaluation methods that are purportedly able to quantify intangible values exist, these methods are typically designed to measure only the monetary costs and benefits associated with a project. As a result, they may not fully capture the intangible value inherent in service scape upgrading investments. In response to this gap, the authors are conducting a research to develop an anticipated investment return calculation theoretical model for service scape upgrades based on the quantification of intangible values. This paper presents a part of the findings from the first phase of the research which focuses on identifying the essential characteristics needed for an investment return evaluation method to quantify service scape intangible values. A mix of qualitative and quantitative approach was adopted, starting with the identification of the characteristics from the literature. Twelve experts that included academics and practitioners in economic valuation, non-market valuation, and methodologies for quantifying intangible values were then interviewed to assess whether the identified characteristics are indeed required to quantify service scape intangible values. The interview data were analysed progressively using content analysis, frequency and Relative Importance Index until data saturation was achieved. The result indicates that qualitative metrics, and long-term perspective are the most important characteristics needed for an investment evaluation method to quantify service scape intangible values. These findings will help guide the selection of appropriate investment evaluation methods to be incorporated into the anticipated investment return theoretical model for service scape upgrades. This in turn may assist decision-makers alike to determine the investment return of a proposed service scape upgrading project in monetary sense despite the intangible nature of the project’s values.