Why is service‐dominant logic based service system better?

Abstract

PurposeResearch suggests that service‐dominant designs are superior to goods‐dominant; but why? The purpose of this paper is to answer three questions. First, in what way is a service system based on service‐dominant logic (SDL) superior to one based on goods‐dominant logic (GDL)? Second, which characteristics of the service system facilitate the co‐creation of value‐in‐context as perceived by the customer? Third, how do customers describe the contents of these characteristics?Design/methodology/approachIn an experiment, the authors compared two different service systems designed with different mindsets. The experiment was carried out with a group of habitual bus travellers to plan a specific journey using two online service systems by two different organizations; one exhibited a goods‐dominant mindset, and the other a service‐dominant mindset. The subjects' opinions of the two systems were gathered, and sentiment analysis was performed on the opinions to uncover the rationale behind the operational superiority of an SDL‐based system in value co‐creation.FindingsThe sentiment analysis identified three key differentiators: intangibles; operant resources; and information symmetry as the reason why an SDL‐based service system is superior to a GDL‐based system. The study also identified specific attributes linked to the key differentiators that could be built into a service system design and verified during a review of that design.Originality/valueThe paper contributes to research by: showing why an SDL based service system is superior to a GDL based one; proposing guidelines for service system design based on SDL to arrive at a favourable customer experience; and to managers by showing that customers have much to contribute in service development and realisation.