Towards an approach for monetary valuation of services

Abstract

PurposeThe purpose of this study is to suggest possible approach which can be applied to estimate the monetary value of the ancillary services in today’s multichannel environment where consumers tend to exhibit cross-channel purchase behavior across the online and offline.Design/methodology/approachThis study conducts literature reviews to identify ancillary services and discuss their service paths across online and offline channels based on service-dominant logic. It then proposes discrete choice modeling approach with stated preference data to estimating the implicit value of services.FindingsBy examining consumer decision-making process, some ancillary services attached to the products/services that consumers target at are revealed and discussed. By applying the discrete choice modeling approach which have been widely applied in the marketing and transportation area to describe consumers’ multichannel choices, it is believed that the implicit value that consumers are willing to pay for having those ancillary services can be estimated.Originality/valueValue is generally considered transitory, stochastic and multidimensional and understood imprecisely. Past research recognized the importance of value to the service industry, but failed to give it a widely accepted definition. Issues on the value of time, value of information and value of services have been widely discussed in the literature, but most of them remained unsolved. The approach proposed by this study to estimating the value of services seems practicable and is worth a further validation by empirical study.