Customer-dominant logic: foundations and implications

Abstract

Purpose – The purpose of this paper is to analyze the theoretical and practical implications of adopting customer-dominant logic (CDL) of service, focusing on how firms can become involved in the customers’ context. Design/methodology/approach – Inspired by the conceptual discussion of service logic and service-dominant logic, this paper focuses on the conceptual underpinnings of CDL. CDL is contrasted with other service perspectives in marketing; CDL is a marketing and business perspective dominated by customer-related aspects instead of products, service, systems, costs or growth. It is grounded in understanding customer logic and how firms’ offerings can become embedded in customers’ lives/businesses. Findings – The conceptual analysis challenges the prevailing assumptions of key phenomena in service research, including interaction, co-creation, service value and service. The paper presents five essential foundations of CDL: marketing as a business perspective, customer logic as the central concept, offering seen through the customer lens, value as formed and not created and the prevalence of customer ecosystems. Research limitations/implications – The paper differentiates CDL from other marketing perspectives. Further empirical research is needed in different empirical settings to provide guidelines for adopting the perspective on a strategic and operational business level. Practical implications – As a firm’s holistic and strategic foundation, marketing is based on understanding how providers participate, at a profit, in customers’ value formation. The paper suggests how firms can successfully conduct business in dynamic markets with empowered customers. Originality/value – This paper expands marketing and business logic based on customer dominance. It accentuates the importance of understanding customer logic and stresses the presence of providers in the customer ecosystem.