Public services and value for the customer

The evolution of both Community and national level in the discipline of public services implicitly puts at the center of the debate the question of value offered to the citizen. The legislator, in fact, in regulating the... [ view full abstract ]

The evolution of both Community and national level in the discipline of public services implicitly puts at the center of the debate the question of value offered to the citizen. The legislator, in fact, in regulating the utilities market encouraged competition between suppliers which, in turn, has the task of offering more value to the end user and the community.
Meanwhile the new digital technologies have made great strides and through big data analysis, a widespread system of sensors and development of artificial intelligence is possible to trace individual behavior and customize the service offering. In this way the citizen become even more a customer.

The prevailing literature, with the expression “value for the customer”, in a nutshell, means the assessment made by the customer of a product, evaluation that is based on the perception of what the customer gets (get) compared to sustained sacrifice (give).
Management behavior intended to better understand customer needs and to increase the perceived value is commonly associated with the concept of market orientation or with the adoption of those business tools aimed at gathering information about the requirements of the application and to project a service design that can respond quickly to market demands and satisfy user needs. The hypothesis is that a company more market oriented will be able to achieve better performance in terms of customer satisfaction and economic performance.
As a return, the customer is a value for the company, which will decide their strategies on the continuity of the relationship with the customer.

In the case of a public service provider the perceived value basically refers to two aspects: the quality and equity of prices. However, the supplier is not always in a position to freely define the price (give factor) and he is at the same time forced by structural constraints (Natural monopoly, high infrastructure costs, etc.).
The customer, on his side, still seem to favor one type of price competition rather than the development of value-added services and 64% of Europeans choose their supplier on the basis of strictly economic convenience.

Expected that the situation continues to be rapidly evolving, issues that arise are at least two:
1) on the supply side providers are documenting a management market-oriented behavior?
2) the citizen is interested to win the inertia and to choose the provider that offers more value?

The answer to these two questions will help to shed light on the underlying issue or if there really is a freedom of choice in the context of public services and how to use local management tools to be able to increase the degree of freedom.
The paper will illustrate marketing theories and empirical evidences that could help to improve a powerful public service design in order to increase the value to the customer and the community.

References:
V. Kumar, W. Reinartz, 2016, Creating Enduring Customer Value, Journal of Marketing, Special Issue, Ahead of Print
G. Zomerdijk, C. Voss, 2010, Service design for experience-centric services, Journal of Service Research 13.1