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Co-production and self-service: The

application of Service-Dominant Logic
a b
Toni Hilton & Tim Hughes
a
Regent's College , London , UK
b
University of the West of England , UK
Published online: 14 Nov 2012.

To cite this article: Toni Hilton & Tim Hughes (2013) Co-production and self-service: The
application of Service-Dominant Logic, Journal of Marketing Management, 29:7-8, 861-881, DOI:
10.1080/0267257X.2012.729071

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 Journal of Marketing Management, 2013
Vol. 29, Nos. 7–8, 861–881, http://dx.doi.org/10.1080/0267257X.2012.729071

Co-production and self-service: The application

of Service-Dominant Logic
Toni Hilton, Regent’s College, London, UK
Tim Hughes, University of the West of England, UK

Abstract Service-Dominant Logic (S-D logic) theory and related literature

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is reviewed to demonstrate S-D logic’s potential to provide new insights

for understanding an important contemporary issue in service delivery: the
application of self-service technology (SST) to customer service. S-D logic
considers operant resources to be the key to gaining a competitive advantage.
Consequently, the most important aspect of the application of SST is the
requirement for the customer to provide the operant resource at the point of
transaction. It is argued that the implementation of SST could be improved by
encompassing an understanding of the resources available to the customer and
the value (or lack of value) experienced by the customer in using SST. Gaps in
existing knowledge are identified, particularly in relation to the application of
SST in business-to-business (B2B) contexts. An agenda for further research is
outlined and a range of management implications are discussed.

Keywords Service-Dominant Logic; operant resources; resource integration;

co-production; self-service technology

Introduction

Service-Dominant Logic (S-D logic; Vargo & Lusch, 2004) has attracted a widespread
and generally favourable response from marketing academics, prompting a number
of refinements, developments, and amendments (Vargo & Lusch, 2008). S-D logic is
concerned with how all parties, or actors, integrate their resources to co-create value.
However, the ‘logic’ remains in the early stages of development, with much academic
debate regarding definitions of many of the underlying principles and terminology
used. In particular, there is limited shared understanding of how customers engage
in value co-creation (Payne, Storbacka, & Frow, 2008). A key element of the
Vargo and Lusch thesis is the role of the customer in value creation. Value is not
embedded within goods by enterprises that generate value to be passed onto ‘passive’
customers who destroy that value through the use or consumption process. S-D
logic conceptualises the use or consumption process as key to achieving value –
hence, the S-D logic emphasis on value in use and the active role of the customer in
co-creating value. This may sound simple but has given rise to considerable debate.
Some academics have confused co-creation with co-production but Vargo and Lusch

© 2013 Westburn Publishers Ltd.

 862 Journal of Marketing Management, Volume 29

are careful to distinguish customer involvement in producing products or service

(co-production) from co-creation which they relate quite specifically to value.
The purpose of this paper is to use S-D logic as a perspective to analyse and
understand an important contemporary phenomenon: the increasing emphasis on
self-service by customers through the provision of self-service technology (SST)
by organisations. Given that SST specifically and quite deliberately increases the
customer co-production role, it provides a particularly interesting context in which
to consider the relationship between co-production and the customer perception of
value co-creation. SST also provides an excellent context in which to consider the
changing roles of customers and service employees and the resources used by those
actors to produce self-service outcomes. Finally, we consider the role and resource
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differences between successful and unsuccessful outcomes.

The paper starts with a discussion of how SST increases the degree of
co-production required, expected, or encouraged from the customer within
contemporary service provision. It is argued that this has significant implications
for the customer experience of self-service. Relevant concepts from S-D logic are
then discussed, in particular relating to the significance of moving the employment of
operant resources from staff to customers and relating to understanding value in use
from different perspectives. The paper proposes a conceptual model to describe the
relationship between value creation and co-production within SST-driven resource
integration and then discusses this in relation to the existing literature on consumer
behaviour and SST. Implications for research and management practice are then
drawn from the foregoing discussion. We propose that S-D logic provides a lens to aid
a better understanding of the reasons why SST is adopted or rejected by customers
and a framework for better implementation of SST initiatives.

Self-service technology changes the customer role

The automatic teller machine (ATM) is a well-established SST. More recent SST
introductions include self-serve checkouts in supermarkets; self-check-in to medical
practices and airports and self-serve petrol pumps. However, it is the Internet and
the commercial development of the World Wide Web that has really accelerated
the growth of self-service technologies. The IT revolution has provided many
opportunities for suppliers to introduce SST. This may be stimulated by the
opportunity to reduce costs, but may also be seen as a response to customer demand
or a way to reach new customer segments (Bitner, Ostrom, & Meuter, 2002). It is
now possible for organisations to increase dramatically the number of customers that
can avail themselves of their service provision without a commensurate increase in
staff operating costs and/or operating sites. However, this relies on customers being
willing and able to operate the SST interface effectively.
We define SST as technologies, provided by an organisation, specifically to enable
customers to engage in self-service behaviours. In many cases, this will involve
customers performing tasks that were previously undertaken by the employees of the
organisation, using technology supplied by the organisation. SSTs can be accessed by
customers in situ within the operating sites of organisations, as in self-serve checkouts
or self-check-in, or remotely, for example through the Internet. However, the use of
SST changes the nature and scope of the customer input into service provision in
ways that might impact upon their perception of the holistic self-service experience.
 Hilton and Hughes Co-production and self-service 863

The growth of self-service provision is dependent upon technology, which suggests

a need to integrate IT and engineering perspectives. However, there is a danger that
services marketing knowledge may be lost if self-service becomes solely associated
with a field of study that integrates IT and engineering. In particular, the experiences
of people within the service system may be overlooked. While this paper adopts a
marketing management perspective, we wish to promote a better understanding of
the customer experience when using technology to achieve self-service.

Value, co-creation, co-production, and resource integration using

self-service technology
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It is important to distinguish between co-creation and co-production because the

terms are not interchangeable within S-D logic. There currently exists no shared
understanding of value co-creation. Indeed, the majority of authors writing within
S-D logic would agree that the term and concept remains ambiguous. While this
paper does not address this ambiguity as its central theme, there is a need to
position ourselves within the debate in order to justify our focus on co-production
and resource integration. Drawing upon the foundational premises (FPs; Vargo &
Lusch, 2008), we provide an interpretation of value co-creation that we accept
is open to debate. Value is ‘always uniquely and phenomenologically determined’
by the customer (FP10). It is therefore an individual perception. The ‘customer is
always a co-creator’ (FP6) because ‘the enterprise cannot deliver value, but only
offer value propositions’ (FP7). We further link the active co-production role of
customers into the achievement of value because ‘all social and economic actors
are resource integrators’ (FP9). Our position is that value is transformed from a
proposition into a perception by the customer when integrating their resources with
those of the organisation through use, consumption, or experience. Co-production,
through resource integration, is integral to the ability to judge ‘value-in-use’ and
therefore a critical element of the S-D logic construct of value co-creation. However,
this positioning of customer co-production as critical to value co-creation is in
contrast to that of Vargo and Lusch who state that ‘involvement in co-production
is optional and can vary from none at all to extensive co-production activities by
the customer or user.’ (p. 8). While our position may be contentious if more widely
generalised, in the case of SST there is no doubt that value cannot occur without
customer co-production, as they would be unable to achieve a self-service outcome
without it.
When using SST, the degree of customer co-production increases through the
transfer of service task performance from employee to customer, transforming the
customer role into what might even be considered to be that of ‘partial employee’
(Baron, Harris, & Hilton, 2009, p. 49; Bitner, Zeithaml, Hubbert, & Faranda, 1997).
The idea that value co-creation is a given while the degree of co-production will vary
is what makes the relationship between the two concepts an interesting aspect of
S-D logic, particularly in the context of SST. What, if any affect, does increasing the
customer co-production role (as happens with SST) have on the customer perception
of the value that they experience? How might increasing the customer co-production
role affect the resources that customers and service organisations contribute to the
integration process, and how might the resources required change the customer and
service employee roles?
 864 Journal of Marketing Management, Volume 29

Vargo and Lusch distinguish between two types of resources that have the potential
to create value. Operand resources, such as raw materials, are ‘. . . resources on which
an operation or act is performed to produce an effect’ (Vargo & Lusch 2004, p. 2).
These are usually tangible, inert, and passive, and require input from an active agent
in order to realise its value potential (Arnould, Price, & Malshe, 2006). Operant
resources are those employed to act on operand resources and on other operant
resources in order to create value. These resources are usually intangible, such as
knowledge, skills, and labour (Arnould et al., 2006; Vargo & Lusch, 2004). Neither
type of resource has inherent value, but both offer value potential that may be
realised through integration with other resources. We consider SST provision to
be an operand resource because it requires the application of operant resources to
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create value. In categorising SST as an operand resource, we do not ignore the use of
operant resources by the organisation in the design and implementation of the SST
provision. However, those operant resources, including the tacit knowledge of the
service employees, have become codified and transformed into an operant resource,
and it is at this point that the customer uses SST to achieve self-service. The provision
of technology to support self-service by customers enables organisations to replace
the operant resources of their employees with the more widely available and less
costly operant resource of their customers. SST essentially integrates the operant
resources of the customer with the operand resource provided by the organisation.
This is a point to which we will return later when we contrast successful outcomes
with unsuccessful outcomes.
Vargo and Lusch consider operant resources to be the fundamental source of
competitive advantage [FP4]. This provides an interesting parallel with the resource
based view (RBV) with its emphasis on the resources of a firm in driving its
performance (Wernerfelt, 1984). According to the RBV, the ability of the firm to
create a sustainable competitive advantage is dependent on the rarity and value of its
resources (Barney, 1991; Prahalad & Hamel, 1990). However, the RBV perspective,
which is well established in the strategy literature (Priem & Butler, 2001), is firmly
rooted in the idea of resources as being possessed by the firm and is pitched at the
strategic level, relating to the firm’s overall core competences (Peteraff, 1993). S-D
logic, with its emphasis on the relevance of both supplier and customer resources,
puts the focus on the integration of resources between the supplier and customer.
The use of SST, which increases the reliance on the resources of knowledge, skills,
expertise, and time provided by customers, involves the transfer of task-performance
from employee to consumer (in business-to-consumer (B2C)) or from supplier
employee to customer employee (in business-to-business (B2B)) increasing the active
role the customer plays as an operant resource and hence the importance of the
customer’s role in creating competitive advantage for the firm. If co-production
relates to task-performance within the self-service process then any value gained
from using SST must arise from the integration of resources. This is consistent with
the S-D logic position that all actors are ‘fundamentally doing the same things,
co-creating value through resource integration and service provision’ (Vargo &
Lusch, 2011, p. 182).
The recognition of the role of the customer in providing the primary operant
resource, in using SST, creates an imperative for organisations to manage resource
integration effectively, for customers, as well as profitably. To do this firms need to
determine which operant resources customers require to participate, how they view
their active co-production/resource integrator roles and what aspects of self-service
 Hilton and Hughes Co-production and self-service 865

technology provide value commensurate with their co-production role. The key to
success in achieving integration must be the customer perception of the value created
for themselves, as a result of their participation. Therefore in the next section we
review the S-D logic perspective on value creation and the role that SST plays in this.

Perceptions of value when using self-service technology

Vargo and Lusch claim that value is co-created through resource integration. Ford
(2011) compares the S-D logic construct of resource integration with that of the
Industrial Marketing and Purchasing (IMP) Group’s business interaction, which he
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defines as a ‘substantive process that leads to the modification or transformation

of the activities and resources of the actors and of the actors themselves’ (p. 235).
Ford sees interaction as a ‘process over time’ (p. 235) and one that ‘involves
relationship-specific investments by either or both counterparts’ (p. 235). Ford
considers integration to be a more limiting concept than interaction. Ramaswamy
(2011) also contrasts integration with interaction and believe that enterprises should
facilitate the ‘creation of experience-based value through interactions’ (p. 195). These
different points of view may revolve more around the S-D logic terminology than
the substantive idea espoused by Vargo and Lusch. Integration is suggestive of a
static event, whereas interaction appears to be more dynamic: interaction(s) can
be multiple. However, it is clear that Vargo and Lusch (2011) intend the notion of
resource integration to be within a dynamic service system, although it is not clear
whether they would stretch resource integration to include transformation of the
activities, resources, and actors. Resources might be transformed from potential value
into having value through integration and actors transformed through the resource
integration experience.
What Vargo and Lusch, Ford, and Ramaswamy have in common is a vision of the
nature of value that moves away from ‘the notion of a producer as a creator of value,
versus a consumer, as a destroyer of value’ (Ford, 2011, p. 231). They disagree with
the idea that enterprises deliver value to passive consumers and envisage enterprises
and consumers to be actors working together to create value. Value is not embedded
in a product but is a judgement made by the actors who are the beneficiaries. This
notion of ‘actors’ has been readily accepted as a characteristic of B2B markets. Vargo
and Lusch (2011) suggest that B2C markets also share this characteristic and that the
traditional goods-dominant approach fails to acknowledge the complex, interactive,
and dynamic systems, or networks, that result in value.
These ideas are interesting in the SST context. It is conceivable that a
transformation of the activities and resources of the actors in both B2C and B2B
contexts may well take place over a prolonged period as they become more proficient
users. The notion of relationship-specific investments by customers and suppliers
and the idea that individual customer usage of SST might transform the activities
or resources of the supplier organisation are probably most applicable in the B2B
context.
Another relevant challenge to the S-D logic view of value comes from Ford (2011).
He claims that value in use implies that while value may be co-created by the supplier
with the customer, only the customer (beneficiary) can determine value in use. Ford
considers this to be a more limited view of value than that which IMP would hold.
While IMP has said little about value to date, Ford is of the view that value would
 866 Journal of Marketing Management, Volume 29

have to be ‘reciprocal and concerned with the particular, but separate value to each
of those involved in the interaction’ (p. 235). He further suggests that each actor will
attribute a meaning to each business interaction, depending upon the extent to which
the interaction helped the actor to cope with particular problems, and that personal
evaluation will influence an actor’s approach to future interactions.
Again, the issues that Ford raises may be more to do with current S-D logic
terminology rather than being truly substantive in nature. In any event, there exists
significant common ground between Vargo and Lusch, Ford, and Ramaswamy in that
value assessment is phenomenologically determined by the beneficiary. This approach
draws attention to the potential diversity of evaluation criteria both among customers
and between customers and the supplier organisation. This makes sense in terms of
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current SST provision where supplier organisations and customers may seek different
outcomes.
In Table 1, we propose outcomes from SST usage that might constitute value from
the point of view of two key actors: the supplier and the customer. Suppliers are
likely to value productivity-related outcomes, measuring factors that determine the
efficiency of the transaction. These values are consistent with a focus on the outcome
of the transaction. Value in use is more associated with a customer perspective, and
the proposed factors might be ways in which customers might subjectively evaluate
the self-service experience, bearing in mind their co-production role. We have also
listed values that might arise from customer evaluation of the holistic SST experience,
which is consistent with value being a function of human experience.
In the B2C context, where the supplier is usually an organisation and the customer
is usually an individual, the applicability of the contents of Table 1 is relatively
straightforward. However, in the B2B context, organisations play both supplier and
customer roles. Moreover, in B2B the customer organisation’s employees will be
relevant in terms of their human experiences of using SST in the course of their work.
Hence, in B2B we potentially have to consider both dimensions when discussing
customer value.

Table 1 Desired value from self-service technology.

Supplier perspective Customer perspective

Transaction focused [FP4: Operant
resources are the fundamental
source of competitive advantage]
Numbers processed
Speed of processing
Value of processing
Error rates
Efficiency rates
Acquisition/retention rates
Cost of processing
Transaction knowledge
Relational knowledge
Experientially focused [FP10: Value is always uniquely
and phenomenologically determined by the
beneficiary]
Convenience/control/speed/ease of use/ security/
reliability
Cost
Enjoyment/fun/frustration/anger
Variety/interest/routine
Enhanced skills/capabilities
Memories
Social contact/friendship
Self-perception/image
Fairness of work involved compared with reward/
benefit
 Hilton and Hughes Co-production and self-service 867

Conceptual model of co-production using self-service technology

Our conceptual model is based on the foregoing discussion of value, resource
integration, and co-production. Our model conceptualises the SST interface as an
operand resource created by the supplier organisation, an interface that facilitates
and requires the integration of customer resources to achieve a self-service outcome,
the value of which can be evaluated by the actors involved. Where the SST results
in a successful transaction through the integration of the operant resources of the
customer with the operand resource (SST) provided by the organisation, there will
be no need for the organisation to provide operant resources (employees) at the point
of the transaction. However, where the outcome is a failed transaction, the supplier
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will need to utilise staff to provide the operant resource necessary to perform tasks
associated with service recovery. The elements of the model in Figure 1 are discussed
below.

Customer resources
We propose that SST requires customers to contribute operand and operant
resources. Operand resources would typically be material resources such as computer
and broadband/Internet access, as well as bank accounts and credit cards. The most
obvious customer-supplied operant resource is their cognitive ability, for example
the ability to operate the technology. In this, much will depend on the match
between the cognitive resources available to the customer and cognitive resources
demanded by the features of the SST. We also acknowledge the potential importance
of ‘relationship and physical’ resources, as identified by Arnould et al. (2006).
Relationship resources comprise the social support of friends and family, as well
as the commercial and professional networks that individuals may call upon in

Figure 1 Model of resource integration using self-service technology.

Customer resources:
Operant and operand
resources used in
accessing and operating
The SST
the SST interface
interface: Actors’ evaluation
of value
(Operand
resource)
Supplier resources:
Operant & operand
resources used in
creation, maintenance &
development of SST
interface

Additional supplier resources

provided in event of service failure:
Staff providing an operant resource
 868 Journal of Marketing Management, Volume 29

using technology. Physical resources will become important where skill, eyesight,
hearing, or dexterity are required to operate the technology, and may be particularly
significant when encouraging SST usage among older or physically disadvantaged
people.

Supplier resources
SST is the interface that integrates the resources that are involved in the co-
production processes. In creating, maintaining, and developing the SST interface, the
supplier organisation provides operant resources in the form of the tacit knowledge
that becomes explicit, codified, and embedded within the SST. This is what makes it
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possible for co-production to take place through the integration of the customer
operant resources with an operand resource provided by the supplier: the SST
interface. When adopting SST, organisations substitute the tacit knowledge applied
by staff, as an operant resource, with that of the customer, who is likely to be less
knowledgeable and less experienced in the organisational systems – hence, the need
to provide ongoing support for customer SST usage. When something goes wrong,
the supplier organisation has to intervene by providing an operant resource, usually
in the form of staff support. SST failure requires staff to perform service recovery
tasks. SST failure may occur at any point in the process and may be easily resolvable,
such as the need for a member of staff to confirm that the customer buying alcohol in
a supermarket is of the right age. In considering the significance of this, organisations
may overlook the fact that the employee task changes from service provision to
service recovery, and the effect that this role change may have on the customer
perception of value.

Value
Our model reflects the earlier discussion that value, as perceived by the actors
involved, is a function of the perceived outcome of the transaction and the resource
integration experience. This will go beyond the way in which a need is satisfied
(speed, control, efficiency, and cost-effectiveness) and will include emotional and
social value. The role of emotional response and memories are both prevalent in
literature around consumer experiences (Pine & Gilmore, 1998, 1999; Schmitt,
1999).

Insights and gaps in the existing SST literature

In developing a research agenda, relating to the model in Figure 1, we are cognisant

of an existing body of literature on consumer behaviour in relation to SST. This
literature is listed in the Appendix. Bringing this literature together with insights
from S-D logic highlights knowledge gaps for further research into the impact of SST
in both B2C and B2B contexts.

Resources
Much of the work on customer interaction with SST relates to the cognitive resource
supplied by the customer, overwhelmingly in the B2C context. It has long been
 Hilton and Hughes Co-production and self-service 869

recognised that individuals have varying degrees of enthusiasm and capability in using
new technologies (see Davis’s, 1989, Technology Acceptance Model). This provides a
challenge for organisations that seek to introduce new technologies where the appeal
needs to go beyond those who are technically savvy (Salomann, Kolbe, & Brenner,
2006). Jayasimha and Nargundkar (2006) argue that the literature has underplayed
functional literacy versus functional illiteracy in considering SST. The functionally
illiterate will undergo significant emotional cost in trying out SST. This theme is taken
up by Zhu, Nakata, Sivakumar, and Grewal (2007) who stress that the effectiveness
of SST features relates to the match between the cognitive resources available to the
customer and cognitive resources demanded by the features of the SST. Research is
needed to understand this gap and how it can be closed. Support and training may be
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particularly important, and this highlights a potential area of differentiation between

B2C and B2B contexts in terms of the support that can be drawn upon within the
organisational context.
It is one thing to have the ability to use the technology; it is another thing to
want to use it. The role of demographics and other social/psychological factors in
willingness to use technology is acknowledged in a number of studies, and age and
gender in particular have often been seen as important determinants of acceptance
(Elliott & Hall, 2005; Langeard, Lovelock, & Eigher, 1981; Moutinho & Curry,
1994; Zeithaml & Gilly, 1987). Other social and psychological factors, such as the
need for self-control and preference for human contact (Bateson, 1985) and social
anxiety and the need for social interaction (Dabholker & Bagozzi, 2002), have
also been identified as being important. In considering resource integration, it is
therefore significant to recognise that everyone brings different attitudes to a service
encounter, impacting on willingness to engage and perceptions of effectiveness.
This would seem to apply in both B2C and B2B situations, although in B2B
it might be expected that willingness to engage and perceptions of effectiveness
might be moderated by the attitude of the employer. The focus on the consumer
context means that there has been little discussion, as yet, of how the B2B context
may mediate between individual social and psychological factors and the use of
SST by the business customer’s employees. Furthermore, the extant SST literature
ignores the role of other factors that have been established to be important in
B2B, such as networks (Achrol & Kotler, 2006; Ford, 2011; Gronroos, 2006;
Gummesson, 2006).

Evaluation of value
Perceived outcome benefits are important in understanding SST usage (Bitner et al.,
2002). The primary output supported in the literature is better satisfaction of
customer need than the non-self-service alternative. This may relate to speed and
convenience, such as when the customer is able to get something urgent done quickly
at any time of the day or week when the alternative is not available (Meuter, Ostrom,
Roundtree, & Bitner, 2000) or is able to save time (Ding, Verma, & Iqbal, 2007).
It may also relate to cost savings over the alternative (Ding et al., 2007). The SST
literature also stresses the experience of the user at the interface with the technology
in determining their perception of the value received. Speed, control, reliability,
and ease of use are consistently found to be important components of successful
SST usage (e.g. Dabholker, Bobbitt, & Lee, 2003; Meuter et al., 2000; Shamdasani,
Mukherjee, & Malhorta, 2008). However, the importance of fun is also mentioned
 870 Journal of Marketing Management, Volume 29

extensively in the literature in relation to usage of the interface (e.g. Curran &
Meuter, 2007; Dabholker & Bagozzi, 2002; Dabholker et al., 2003). The question
of perceptions of security does not feature strongly but does appear in one study
(Gilbert, Balestrini, & Littleboy, 2004). It may be that the emphasis on fun/enjoyment
over security reflects the B2C context of most of the SST research. For example,
many of the studies feature usage of supermarket scanning technology, where the
novelty of the new technology may be an element and where security is unlikely
to be a major concern. Further research in sectors such as financial services may
find security to be more of an issue. Enjoyment has been found to be a significant
feature in determining uptake of self-scanning (Marzocchi & Zammit, 2006), online
shopping (Childers, Carr, Peck, & Carson, 2001), and self-service banking (Curran
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& Meuter, 2007). Value may, of course, be positive or negative (resulting in value
destruction). Frustration or anger may be emotional responses arising from a bad
experience with SST. As the scope and usage of SST evolves, there is a need to develop
a better understanding of how value is perceived across different contexts and
users.
Emotional and social outputs are not confined to B2C customers. Social exchanges
may be very important in reducing uncertainties in inter-organisational relationships
(Ford, 2002; Hakansson & Ostberg, 1975) and in negotiating and dealing with
a crisis (Turnbull, 1990). Commitment and trust are recognised as key variables
in B2B relationships (Morgan & Hunt, 1994), and these develop as the parties
involved in the relationship learn what to expect from each other (Lewicki &
Bunker, 1995).
There is much to learn about the perception of the different actors, of the value
benefits of SST usage, in the B2B context.

Implications and research agenda

The review of the literature and the proposed models suggest that the practical
context of SST is fertile for future research, and particularly the relationship between
customer task performance and value. Production and the closely related idea of
productivity have traditionally been viewed from the perspective of the producer and
predominately within the manufacturing sector. Theory development that includes
the perspective of co-production from the point of view of the customer remains
limited. The perspective of S-D logic and the surrounding discussion it has stimulated
around resource integration and value creation suggest the following areas for
research.

The perceptions of value creation/destruction in using self-service technology

Dyadic research designs might usefully compare and contrast the motivations and
experiences of organisations (as suppliers) and customers (both B2C and B2B) when
using SST, and show how far these are met or compromised in SST applications.
In Table 1, we summarised the different supplier and customer perspectives. How far
are these different viewpoints compatible? Is it possible to balance the provider and
customer input according to the circumstances and type of customer? What are the
differences in the use of SST between B2C and B2B, and how do these differences
impact on the co-creation process and value creation?
 Hilton and Hughes Co-production and self-service 871

The nature of knowledge and knowledge creation within resource integration using
self-service technology
Investigation of the way that the customer’s operant resources are combined with
those of the organisation, as conceptualised in Figure 1, provides another major
opportunity for research. In this, making the distinction between tacit and explicit
knowledge may be useful. The movement of production away from staff to customers
has implications for the way that knowledge is used and acquired. When using SST,
an organisation is substituting the tacit and specialised knowledge of staff, as an
operant resource, with that of the customer, who is likely to be less knowledgeable
and less experienced in the organisation’s systems – hence the increased importance
of the tacit knowledge held by customers and the quality of the explicit knowledge
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embedded in the self-service system. The nature of the operant resources required
may be closely related to the usage of the service. First-time usage requires the ability
to navigate and work it all out. Successive usage requires the ability to recall previous
experience and (sometimes) the passwords and personal identification numbers for
access. This may lead to separate issues around the ability to access and use the SST.
A further question relates to how knowledge transformation is impacted by
the replacement of interaction between customers and service employees by the
interaction of customers directly with technology. Nonaka’s (1994) influential work
portrays knowledge creation as a social process involving interactions between
people and practice, transforming tacit into explicit knowledge and vice versa.
The importance of person-to-person interactions in learning together in B2B is
particularly emphasised in the IMP approach (Ballantyne, 2004; Gronroos, 2004).
The implications for organisational learning and development, where the primary
operant resource is provided by customers, would require longitudinal research
designs examining impact over time.

The impact on customer engagement and relationships of using self-service

technology
The S-D logic perspective, with its emphasis on the specific context of value
determination and on the subjectivity involved, raises questions about the impact
on supplier–customer relationships of the move away from person-to-person
interactions inherent in the provision of SST. This is particularly interesting in
relation to the B2B context. The great majority of the marketing literature on
SST, outlined in the Appendix, focuses on end consumers, and yet the application
of SST has also been rapid within the B2B sphere. For example, in commercial
financial services, pressures for efficiency have resulted in the widespread use of
technology to deliver service alongside reorganisation into centralised units (Tyler
& Stanley, 2001). Hughes, Foss, Stone, and Cheverton (2007) found many cases
where local commercial relationships had been abandoned and replaced with a more
transactional approach supported by remote servicing. This trend raises a number
of issues relating to managing the vast majority of commercial customers that are
not large enough to get the personal service offered to key accounts (Piercy & Lane,
2003). Relational exchanges constitute an important resource for organisations (Hunt
& Morgan, 1995), and the interaction process is recognised as central to relationships
(Ballantyne, 2004; Gronroos, 2000, 2004). However, while relationship marketing
predicates the importance of interaction, some of the technology employed in
 872 Journal of Marketing Management, Volume 29

managing customers actually creates distances between the firm and its customers
(Tzokas & Saren, 2004). The application of S-D logic, and our model, within B2B
has the potential to provide new perspectives on how firms can successfully employ
SST in managing inter-organisational interaction.

The impact on customer perceptions of service provision as a result of growth

of self-service technology
A further question that might be explored is at the macro level. How far and
in what ways are customer views of service changing as a result of the ongoing
spread of the application of SST to customer service across a range of sectors? The
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traditional model of services marketing emphasises the importance of the behaviour

of the supplier’s staff in customer contact positions in determining the customer’s
perception of the quality of service provided (e.g. McDonald & Payne, 1996): In
SST, responsibility for a larger element of service production is being put upon the
customer, as conceptualised in Figure 1. What is this doing to customers’ expectations
of service and their rating of service quality? Are there sectors or services where the
application of SST is impacting more than others or where personal service is held to
be particularly important?

Managerial implications

Managing customers as operant resources

The introduction of SST as a replacement for personal service necessitates a review
of how best to support the application of operant resources in the process. SST
changes the customer-facing employee role from being primarily operational to
being about training customers and providing ongoing support to customers. SST
has limitations, which effectively result in customer-perceived SST failure. Even
trained customers using self-scanning machines need employees to access employee-
vested knowledge and authorities. While successful SST transactions may well reduce
employee involvement, failures require employee intervention, as conceptualised in
Figure 1. Such interventions require employees to perform ‘self-service recovery’
tasks and not traditional service delivery tasks. This new role requires different
aptitudes, knowledge, and skills – a whole new set of operant resources that
organisations will need to manage.
SST transforms the customer role into an active resource to be managed as
part of the resource integration process. Employees require induction, training, and
development, and retention strategies. Every time changes are made to internal
systems, employees require communication and potentially retraining. Customers
using SST become partial employees, but will require managing in different ways
from employees. Particularly worthy of managerial consideration is the acquisition
of the required operant resources by the customer. As technology facilitates an ability
to leverage the operant resources of customers, service organisations will need to
articulate exactly what knowledge, skills, and capabilities their customers require;
how they will acquire them, from where, or from whom; and what the associated
learning curve will involve. Service organisations will need to factor in the time and
costs associated with the learning curve as customers develop the operant resources
 Hilton and Hughes Co-production and self-service 873

they will need, in the same way that they would have to train and develop their
own employees. The learning curve for customers needs to be considered, along with
customer adoption and diffusion processes and the impact of customer churn. Self-
service provision may, in fact, cost some service organisations more than maintaining
service employees where there is high customer churn, where the number of ‘novice’
or new customers, outweigh returning or ‘expert’ (Bateson, 2002) customers, and
where a large number of service employees are needed to develop the operant
resources of those novices. As Frei (2008) notes, companies have more control over
employees than customers, and customers are harder to train, so tasks need to be
dramatically simplified.
While successful SST transactions are unlikely to involve employees, unsuccessful
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ones will inevitably involve employees in new roles associated with ‘self-service
recovery’ tasks. Successful adoption of SST will require effective management of
customers and employees in these new roles.

Managing the operand resource: Self-service technology interface

SST provides an interface to facilitate transactions but is also potentially a means
for interaction. In this respect, a change in thinking about service processes may
be necessary. Ramaswamy’s (2011) concept of engagement platforms is useful
here, suggesting that a conventional services value chain mindset is insufficient in
designing technological systems that involve customer interaction. An experience
mindset is required that recognises the importance of human experience and uses
this understanding in designing all aspects of the system. Organisations adopting
SST will need to design the SST to accommodate diversity in the physical operant
resources available to customers, such as eyesight and dexterity, as well as cognitive
resources, such as familiarity with technology and material resources including
computer/broadband access, credit cards, and bank accounts.
The IMP approach, emphasising reciprocal relationships in networks that build
and change over time, may also be useful in considering the co-creation of effective
SST provision. As discussed above, the creation and development of knowledge is said
to require an ongoing process of transformation between tacit and explicit knowledge
(Nonaka, 1994). As an engagement platform, the SST interface will need to be
flexible and responsive to the changing needs of the actors involved in interacting
with it.

Managing the value

SST must provide outcomes that customers value and consider commensurate with
their increased co-production role. This might involve freeing up employees to
perform other tasks that customers perceive to be more valuable than previous tasks.
This may depend upon the ability of the service organisation to ‘fulfil’ customer-
generated requests as competently as those generated by employees. The need to
ensure the internal visibility of fulfilment processes presents a challenge to service
organisations when service orders and requests become less visible as a result of
self-service provision. Alternatively, SSTs can provide more value that only becomes
achievable as customers take on new tasks. Online banking is an exemplar of this
approach, providing greater access (24/7) to information, convenience, and control
over financial transactions than the traditional approach.
 874 Journal of Marketing Management, Volume 29

One challenge for organisations in moving elements of the production process

from their own employees to those of their customers is that the true costs may
be hidden. The long-term cost in terms of deterioration of inter-organisational
relationships, particularly in B2B, as a result of inept introduction of SST may not be
immediately apparent. Moreover, the literature is full of examples of organisations
struggling to utilise technology effectively in the context of existing organisational
structures, cultures, and processes (Dowling, 2002; Payne & Frow, 2004; Rigby,
Reichheld, & Schefter, 2002).

Conclusions
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The implementation of SST illustrates the limitations of goods-dominant (G-D)

logic thinking that emphasises value as being created by the supplier and as being
embedded in products and services. How often have organisations failed their
customers by implementing SST that is difficult for many of their customers to
use and causes resentment and service failure? Effective implementation of SST
requires an understanding of the resources that the customer needs to input into
the process and of the motivation of the customer to use these resources. Customer
motivation will be driven by their interpretation of the value they gain from
providing these resources. In this paper, we have demonstrated how elements of
S-D logic might be applied to analyse this important contemporary issue in service
delivery.
Perhaps the most useful concept within S-D logic, in relation to SST, is that of
the role of operant resources as the basis of competitive advantage. This draws our
attention to the essential difference between self-service, where the operant resource
is provided by the customer, and personal service, where the supplier’s employees
provide the operant resource. Our model of resource integration in Figure 1 provides
a new perspective for considering the resources involved and the nature of value in
using SST, both when it operates effectively and when it fails. The focus of S-D
logic on operant resources as the basis for competitive advantage carries with it the
implication that organisations adopting SST may need to manage customers as the
primary producers of the services they receive. Successful integration of operand and
operant resources, of customers, employees and the organisation, presents a range of
design and management challenges.
Applying the conceptual lens of S-D logic can be seen to be useful in stimulating
further research into various aspects relating to supplier and customer perceptions
of SST: the contrast between supplier and customer evaluations of value; the impact
on knowledge development of the move to greater dependence on the customer’s
tacit knowledge; the long-term impact of replacing person-to-person interactions
with SST transactions; the degree to which customers’ views on service provision
across different sectors is changing as a result of the continued roll-out of SST.
These aspects all relate to both B2C and B2B contexts. However, our review of
the literature reveals how little research has been conducted into SST and the B2B
customer.
SST has a great allure for organisations wishing to move productive capacity from
the organisation to the customer. However, practitioners involved with the provision
of both consumer and inter-organisational services may need to act with caution when
adopting technology to support self-service. The implementation of SST in many
 Hilton and Hughes Co-production and self-service 875

instances suggests G-D logic thinking that has not encompassed an understanding of
the resources available to the customer or the value (or lack of value) experienced
by the customer. The key to success may be to ensure that the service supplier
identifies and understands the operant resources to be applied to the SST interface
(operand resource) and the experiences of people (customers and employees) when
using the technology. There is a need to gain a better understanding of the value
‘outcomes’ experienced by customers, as well as the full costs of moving away from
person-to-person interaction.

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Appendix 1 Literature relating to customer use

of self-service technology
Resources (showing importance of factors that influence the willingness or ability of
customers to apply their resources in using SST)
Cognitive effort and ability Davis (1989) Sales employees as users
required Bitner et al. (2002) B2C
Meuter, Ostrom, Bitner, Online survey of consumers
& Roundtree (2003)
Elliott and Hall (2005) B2C
Jayasimha and Nargundkar General public
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(2006)
Simon and Usunier (2007) General public
Zhu et al. (2007) Not explicitly B2C or B2B
Van Deursan and Van Dijk, General public
(2009)
Demographics and Zeithaml and Gilly (1987) B2C
psychographics Moutinho and Curry (1994) B2C
Langeard et al. (1981) B2C
Elliott and Hall (2005) B2C
Karahasanovic et al. (2009) General public–older people

Consumer traits Dabholker and Bagozzi, B2C

(2002)

Evaluation of value received (desired service outcomes from using SST)

Need satisfied – Bitner et al. (2002) B2C
Speedily and conveniently Meuter et al. (2000) Online survey of consumers
Cost effectively Ding et al. (2007) B2C

Evaluation of value received (relating to the experience of usage of SST)

Speed, control, reliability, Bateson (1985) [speed and B2C
ease of use control]
Evans and Brown (1988) Website users
[reliability]
Dabholker (1994) [control] B2C
Dabholker (1996) [ease of B2C
use, control]
Anselmsson (2001) [ease of B2C
use]
Childers et al. (2001) [ease B2C
of use]
Dabholker and Bagozzi B2C
(2002) [ease of use and
performance]
Dabholker et al. (2003) B2C
Salomann et al. (2006) B2C, but supplier perspective
[ease of use]
Ding et al. (2007) [time B2C
saving and control]
(Continued)
 880 Journal of Marketing Management, Volume 29

Appendix1 (Continued).
Resources (showing importance of factors that influence the willingness or ability of
customers to apply their resources in using SST)
Anitsal and Schumann B2C
(2007) [degree and
quality of customer
labour required]
Shamdasani et al. (2008) B2C
[speed, control,
reliability]
Shen and Chiou (2010) B2C
[ease of verification]
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Enjoyment/satisfaction Dabholker (1994) B2C

Dabholker (1996) B2C
Wolfinbarger and Gilly B2C
(2001)
Childers et al. (2001) B2C
Dabholker and Bagozzi B2C
(2002)
Dabholker et al. (2003) B2C
Marzocchi and Zammit B2C
(2006)
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government services

About the authors

Toni Hilton is Dean of the Faculty of Business and Management at Regent’s College, London.
Previously she was Associate Dean for Research and Knowledge Transfer at Westminster
Business School, London and Head of Unitec Business School, Unitec, New Zealand. After
reading law at university Toni pursued a career in sales and marketing. Having spent her
practitioner career marketing products, she now specializes in the marketing of professional
services which enables her to combine her academic interests in both law and marketing. Toni
also takes a keen interest in the development of the marketing curriculum, particularly at
post-graduate level.

Corresponding author: Professor Toni Hilton, Regent’s College, London, Inner Circle,
Regent’s Park London NW1 4NS.
T +44 (0) 207 487 7405
E Toni.hilton@regents.ac.uk

Tim Hughes is Associate Professor in Applied Marketing at Bristol Business School, University
of the West of England, UK. Before coming into academia he first worked for 17 years within
large companies in both Fast Moving Consumer Goods (FMCG) and Financial Services. He
then ran his own consultancy for 7 years undertaking work in the UK and internationally.
 Hilton and Hughes Co-production and self-service 881

He has published in journals such as European Journal of Marketing, Journal of Services

Marketing and Journal of Marketing Management. His research has largely related to services
marketing and in particular the development of new channels for customer service such as the
internet.
T +44(0) 117 3283400
E tim.hughes@uwe.ac.uk
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